Tech scrutiny should be viewed as tailwind: Hyperion
Big technology firms may be coming under regulatory scrutiny but Hyperion Asset Management are hopeful there are more tailwinds than headwinds.
Facebook and Tesla were included in the top five largest holdings of the Hyperion Global Growth Companies fund and had a 37.8% weighting to technology and 18.6% to communication services, which included Facebook and Alphabet.
Facebook, in particular, was coming under scrutiny by US regulators over issues such as data privacy and anti-competitive behaviour. Meanwhile, Tesla was being watched for car crashes of its self-driving vehicles by the National Transportation Safety Board.
Chief investment officer (CIO), Mark Arnold, said: “The regulatory risks are manageable and have been reducing over time. We are not concerned about that and the businesses are willing to engage with the regulator to improve their services.
“They are not using their powers to affect pricing so it is hard for the regulator to attack them.”
Jason Orthman, deputy CIO, said: “In newer industries like Tesla, they are more regulatory tailwinds than headwinds as the Government is supportive of sustainable energy through electric vehicles especially in the US and Europe. We think the headwinds have reduced significantly.”
The Hyperion Global Growth fund was launched as a listed active exchange traded (ETF) fund in March and the pair said this had helped broaden the reach of the vehicle. The source for assets under management, which had reached $400 million, was 50% from full service brokers, 25% from financial planners and 25% from retail online brokers, compared to mostly financial planners for the unlisted version.
“It has really democratised the product, traditionally most of our flows came from financial advisers, they were really the gatekeepers, but the active ETF allows us to attract more retail flows via mum and dad investors who are using platforms like CommSec,” Orthman said.
However, the firm said they were currently not considering launching an active ETF version of its Australian Growth Companies or Small Growth Companies.
“We are not considering it at this stage, our focus is the Global Growth Companies fund which has a strong track record and are focused on getting assets to rise in that fund,” Arnold said.
AUTHOR
Laura Dew
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
