Poor stock picks hit Macquarie global equities fund
The relatively weak performance of large cap stocks and some poor decisions on individual stock selection have led researcher Morningstar to rate Macquarie’s international equities strategy as ‘investment grade’.
The researcher noted the fund, which is managed by Lazard Asset Management, had the highest average market cap strategy of managers covered by Morningstar, but while the researcher admitted underperformance of large caps had contributed to the fund’s poor result, other factors were said to have led to the rating.
The researcher criticised the fund manager for favouring the financial services sector, which lagged in performance during 2005 due to interest rate concerns. And while the fund’s overweighting in Japanese stocks was considered a plus, the researcher noted individual selections such as holdings in Nissan Motor, which was hit by rising input costs, had backfired.
Positives for the fund were its consistent investment approach, experienced management and low staff turnover.
“After taking out Macquarie’s favourable currency calls, this strategy is by no means best in class,” Morningstar head of research Justin Walsh said in a recent research report on the fund.
The strategy gained only 6.71 per cent for the three years to November 30, 2005, compared with a 6.87 per cent rise in the average wholesale international equities offering during the same period.
Recommended for you
Grant Hackett has been promoted from CEO of Generation Life to head up the wider Generation Development Group.
Tribeca Investment Partners has made a distribution hire from Australian Ethical in a newly-created role focused on the national intermediary market.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
