Launching a fund in the ‘darkest hour’

Maple-Brown-Abbott/Dougal-Maple-Brown/

2 December 2021
| By Laura Dew |
image
image
expand image

Maple-Brown Abbott has stood behind its decision to launch a second Australian value fund earlier this year, despite it being the “darkest hour” for value managers.

The Australian Value Opportunities fund was launched in April 2021 and was a high conviction Australian equity all-cap fund.

Speaking to Money Management, Dougal Maple-Brown, head of Australian equities, said the COVID-19 period had been a tough time.

“When COVID-19 hit, we thought this might be our moment but things went even lower. Normally value does well in a crisis but it didn’t turn out this way and we were in trouble and still underperforming which was painful. It was a terrible time.”

Nevertheless, the firm still went ahead with the launch of the Australian Value Opportunities fund, which had been seeded in July 2020.

“It was the darkest hour but we knew this was the time to do it. We seeded it in July 2020 and COVID was improving, value had started rallying including banks and deep cyclicals which played into the fund’s strategy,” he said.

“It is a high conviction fund so is not for the fainthearted, when value is doing well then it will do better than our other fund [Australian Share] but then when value goes down then so will the fund.”

He said it had been helped by banks, insurers, resources names (excluding iron ore), and mid-cap takeovers.

Asked what would be an ideal environment for value funds in 2022, Maple-Brown said an improvement in global growth and a sensible rise in interest rates. The reason value had been underperforming over the last decade was the global move to low interest rates.

“Value is the only non-correlated asset class to interest rates so if rates go the other way, it will be hard to find protection in a rising interest rate environment. Bond funds won’t give much protection and most other asset classes will struggle.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 1 week ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks 1 day ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

2 weeks ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks 1 day ago

TOP PERFORMING FUNDS