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Specialist in Asia Pacific, China, India and South East Asia and Global Emerging Market equities.
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formerly Realindex Investments
Leader in active quantitative equities across Australian equities, global equities, emerging markets and global small companies.
Backed by a unique blend of research, portfolio construction and risk management, focused on uncovering original insights and translating them into investment strategies that are active and systematic, aiming to generate alpha.
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At Stewart Investors, we believe in putting people first. Our investment world-view is of a series of partnerships – with each other, with our clients, with the companies we invest in, the people who buy their goods and services, and with the wider society in which we all live and work.
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Our portfolio managers are supported by equity analysts with a proven track record of fundamental bottom-up stock research in smaller Australian companies.
Explore Australian companies poised for global growth in a fast-growing market segment with Dawn Kanelleas, Head of Small and Mid Cap Companies. Her small companies strategy has outperformed the market over the medium and long term in the 12 years the team have managed portfolios together*.
The major issues facing Australian equities investors discussed by Dawn Kanelleas , Head of Australian Small and Mid-Cap Companies at First Sentier Investors.
Small and mid-cap companies give investors access to some of the higher-growth technology, healthcare and renewable energy opportunities available in Australia.
A substantial number of businesses impacted by the knock on effects of the pandemic have turned to capital raisings to see them through the COVID-19 crisis. We talk to Senior Portfolio Manager Small & Mid Caps, Dawn Kanelleas, about the ASX-listed companies she has decided to back through the isolation period.
From growing companies to up-and-coming names, our range of active, research-driven approaches to the Australian share market aim to deliver above market returns over the long term.
Some small companies may one day grow to be large and successful, but many others could fall victim to unfavourable markets, poor management decisions, or a combination of both.
A former academic with a science background, Dawn Kanelleas, Head of Australian Small and Mid-Cap Companies at First Sentier Investors, reveals how she found and has maintained her edge investing in small-capitalised companies. Dawn discusses her Greek heritage, personal influences, and her professional journey into financial markets and asset management after completing a PhD thesis in rare earths in this wide-ranging interview. Her success managing small company portfolios since 2008 is built on her analytical background, as well her ability to be open to new ideas and different ways of thinking about risk and reward.
Find out more about how our team achieves capital growth by investing in stocks, small cap stocks and companies with an aim to minimise downside risk.
As small companies flourish, revenue and earnings growth are typically expanding at their fastest point in the company’s lifecycle – growth that larger, more mature companies would find difficult to replicate.
The mid caps space is characterised by successful companies with strong growth profiles, which can offer attractive diversification benefits to Australian equity portfolios. Yet they comprise only a small proportion of a typical broad-based portfolio. In this article we highlight some of the attractive characteristics of this often-overlooked segment of the market.
Updates and thought pieces from our leading investment experts
The well-established First Sentier Investors Australian Small and Mid-Caps team has extended its small companies long short strategy to retail investors for the first time
Incorporated in 1885, BHP began as a silver, lead and zinc mine in Broken Hill, Australia. Over the next century the company grew into one of the largest diversified resource companies in the world with operations including oil and gas, steel production and mining of a variety of commodities including copper, potash, coal and diamonds. It listed on the Australian stock exchange in July 1961, making it the oldest company currently trading, and throughout much of this time it has been the largest company on the ASX by market capitalisation (currently it is ranked third). In 2001 BHP announced it would merge with fellow resource powerhouse Billiton. Billiton also had a long history dating back to a single tin mine in 1851 before growing into a major producer of aluminium, alumina, chrome, manganese, steaming coal, nickel and titanium. The company was Dutch controlled from inception before being acquired by South African firm Gencor in 1994. As the world’s largest metals and mining corporation, BHP Billiton began trading in July 2002 and operates as a dual listed company (DLC) – a corporate structure in which two companies have merged into a single operating business but retain separate legal identities and stock exchange listings (in this case Australia and the United Kingdom ).
In volatile times, diversification is more important than ever – across – but also within asset classes. Deputy Head of Australian Equities Growth, David Wilson, looks at how to diversify an Australian share exposure.
Despite straddling two of the most disrupted years in living memory, the FY20-21 reporting season was overall very positive. In our analysis, around one-third of companies [that we cover] surprised us on the upside, around one-third delivered in line with expectation, and one-third were below expectation. Our investment approach focuses on selecting companies with strong return on equity and return on invested capital, and these companies delivered superior returns overall. We actually saw EPS grow by 26% over the previous corresponding period, and expect a further 20% growth in the financial year ahead. Put simply, investors in quality stocks were rewarded by strong performance through the reporting season. We were also pleased to see that overall, Australian companies have strong cashflow and balance sheets.
If you had invested $10,000 into the First Sentier Wholesale Australian Small Companies fund back in 1994 your investment would now be worth more than $250,000.
There was a large jump in capital raisings – in April alone 26 companies in the S&P/ASX300 issued new stock. By the end of 2020, 104 of these companies had undertaken raisings - the most number of companies that had ever raised equity in single year - totalling almost $40 billion.
First Sentier Investors today announced unit holders have voted in favour of a change in responsible entity (RE) for a number of funds from Colonial First State to The Trust Company.
People are are at the heart of our success as a leading global asset manager
Global investment manager, First Sentier Investors, today announced changes to its investment capabilities within Australia.
Today, Realindex Investments, an active quantitative equities manager within the First Sentier Investors Group, will be known as RQI Investors. Coinciding with the investment manager’s 15-year anniversary, this name change is the first undertaken since RQI Investors was founded in 2008 and will be accompanied by a new logo and visual identity.
Livewire interviews Dawn Kanelleas and Michael Joukhador from our small companies team about their views on Australia's technology sector, the 'WAAAX stocks', and their high conviction investment positions.
We have closely followed earnings across our India Subcontinent portfolio companies to assess how successfully they have emerged from the initial impact of the pandemic.
We consider ESG risks to be factors that may place business value at risk. Companies at risk are identified using both external providers and our own internally driven research, which is based on a systematic and extensive company meeting program.
Mr Aditya Puri, who had only recently retired as the CEO of HDFC Bank, had joined the board of a small, unlisted pharmaceutical company, Stelis Biopharma. Given Mr Puri’s remarkable leadership at HDFC Bank, we dug deeper into his new role. In addition to his board role at Stelis, he had accepted the position of an advisor to the broader Strides Group.
The energy crisis in Europe has boosted global demand for LNG. Global listed infrastructure companies pioneered the US LNG industry, investing US$50 billion since 2010. The energy crisis is providing an opportunity for LNG to secure its role as a transition fuel. With reliability and security of supply increasingly front of mind, US LNG exporters stand to gain market share, underpinning a further US$50 billion of investment over the next decade. An increased need for natural gas infrastructure will also benefit the broader North American midstream sector.
The Australian Equities Growth team provides a suite of products, including broad based, small cap, imputation, concentrated and geared funds. We believe growing companies, which generate consistent returns and can reinvest above their cost of capital, provide the greatest shareholder value
Leveraging our recent paper, ‘Reducing carbon intensity in portfolios: Better news than you think’, which analysed the investment impact of reducing carbon exposure versus the benchmark; we turn our attention to how we can reduce carbon risk in our Value strategies.
Australia currently has a unique opportunity to set up a framework that can support investment aligned with the nation’s sustainability goals, by means of the Australian Sustainable Finance Strategy (“the Strategy”).
We are entering a new era. The year 2024 will be unpredictable and clouded by many uncertainties. It will be marked by geopolitical risks, the ongoing taming of the inflation beast, and how the US Presidential election will impact markets.
We consider ESG risks to be factors that may place business value at risk. Companies at risk are identified using both external providers and our own internally driven research, which is based on a systematic and extensive company meeting program.
Armed conflict has enormous humanitarian consequences, as well as long lasting economic, social and environmental repercussions. Whilst the Russia-Ukraine conflict is unfortunately far from the only armed conflict globally (the Geneva Academy is currently monitoring over 110 armed conflicts) and there have been a number of conflicts taking place in Ukraine since 2014, the escalation of this conflict in 2022 led to sanctions that were unprecedented in scope and severity at state level as well as for corporates.
The world is on the cusp of a revolution in low-carbon technologies, and they are set to reshape many of our supply chains. The not-so-humble battery sits at the heart of this shift: the growth of electric vehicles (EVs), and renewable power generation/storage, will increase demand for a range of raw materials.
Last quarter I visited infrastructure companies in Tokyo, Osaka and Nagoya. The trip included visits to ten corporate head offices and three site tours. This paper seeks to share some of the key findings from my meetings with Japanese passenger rail and utility companies.
After decades of flat electricity demand for US utilities, the industry is now seeing unprecedented demand as growth in data centers / AI, electrification, onshoring and electric vehicles outweighs energy efficiency gains. One utility executive stated: “Seeing all these customers wanting 24/7 load and willing to pay for it – it is every utility’s dream”.
We pose the question – what if we could develop a way of predicting which companies are more likely to be suffering distress, and which were not? The idea contains three parts: A. Certain individual observations or metrics can separately tell us about stocks that might – in the near future – find themselves in trouble. B. If we combine enough of these metrics together – without overfitting – we can get synergy between the factors. C. If we build a smart model that is designed specifically to target corporate distress, then we can apply and refine the predictions from the metrics in a better way.
First Sentier Investors are the world-leading provider of specialist investment capabilities. Discover how we provide research-led active investment management.
What are zombie firms? How can they affect Australian investors?
Global listed infrastructure underperformed in 2023 owing to rising interest rates and a shift away from defensive assets. Relative valuations are now at compelling levels. Infrastructure assets are expected to see earnings growth in 2024 and beyond, aided by structural growth drivers.
In September 2023, I met more than 30 global listed infrastructure companies and stakeholders from the UK, Europe and China. The following travel diary summarises my impressions and findings from these meetings.
Diversity is a business issue as well as an ethical one. There is a raft of research demonstrating that gender diversity contributes to better business and economic outcomes.
Disruption. It's a word that we hear a lot of these days, but how many companies can claim to be truly innovative in their industry? Essentially what we're investing in is structural growth, focussing on innovations that benefit consumers, whether it be through a new, more innovative product, or a great product at a materially reduced price. Here Head of Australian Equities Growth Dushko Bajic focuses on A2Milk, TPG and Xero, and how they are looking to turn their industries upside down.
Discover how our equity managers with one of Australia's longest track records provide capital and income growth by investing in the Australian share market.
American Listed Infrastructure (ALI) has seen a significant increase in Merger and Acquisition (M&A) activity. Private market and foreign corporate buyers are paying premiums of 25% to listed markets, often for non-controlling stakes. This M&A illustrates the intrinsic value available to investors in the ALI asset class. We expect M&A will continue for a number of years. This will deleverage balance sheets, reduce equity needs and recycle capital from non-core to core activities, thereby raising the quality of the ALI asset class.
Since our last update, global markets have not been short of action and the manic behaviour characterising today’s markets has taken investors on another rollercoaster ride. While not quite comparable to the market movements seen during the dark days of March 2020, the recent correction — especially in China-related companies — has been notable. Yet, from a market perspective, a sense of normality is finally starting to emerge after the more speculative phases over the past 12-18 months. Companies related to the Work- or Consumed-From-Home environment are starting to discount a more realistic outlook and, equally, franchises with good long-term prospects that were experiencing temporary uncertainties caused by the pandemic have, for the most part, regained some of the lost ground as their underlying business fundamentals continue to improve.
The First Sentier Wholesale Strategic Cash Fund (‘the Fund’) reported a positive return (0.0032 or 0.32%, gross of fees) for the month of October 2022. This result was a welcome development following the low interest rate environment of the last 2 years, which has seen cash as an asset class struggle to produce higher returns and gain interest. With inflation becoming a key focus globally, the Reserve Bank of Australia (RBA) has begun tightening monetary policy through hiking interest rates, which has seen increasingly positive prospective returns from cash portfolios. The Fund maintains ample liquidity and is well positioned to capitalise off of the current market conditions. This note will dive into the dominant factors driving performance as well as further detail of the investment team’s longstanding approach to managing the portfolio which remains unchanged.
Andrew Greenup and George Thornely explore the performance of the Global Listed Infrastructure Securities asset class and look ahead to the main themes expected to impact this asset class over the years ahead.
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