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Leader in active quantitative equities across Australian equities, global equities, emerging markets and global small companies.
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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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A diverse range of global, regional and sector based equity, multi-asset and fixed income investment strategies and funds
In this video, Head of Australian Equity Growth Dushko Bajic discusses the changing macro environment and navigating volatility within the investment process.
The portfolio managers are supported by a large group of equity analysts with a proven track record of fundamental bottom-up stock research.
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.
Concentration in equity markets has reached unprecedented levels, particularly in the United States. A select few mega-cap stocks, colloquially referred to as the "Magnificent 7," now dominate market indices, reflecting a convergence of technological innovation, speculative enthusiasm, and the allure of generative AI.
In the following video, Head of Australian Equity Growth Dushko Bajic discusses the impact of rising rates on company valuations and the economy.
RQI Investors’ quantitative value strategies have a long history of outperformance versus peers and value indices. Our disciplined, highly active, and repeatable value investing process provides investors with a benchmark unaware, diversified equity portfolio that is cost competitive versus fundamental active stock pickers.
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.
Our recent paper on Extreme Concentration focussed on the US (and so Developed Markets). This was the natural as the central issue of concentration was among the top 10 stocks in the US, among them, the “Magnificent 7”.
Better profit margins, higher return on equity and superior share market returns are hallmarks of listed companies with more diverse executive teams, new research shows.
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.
While the current norm is to assume that pursuing renewable energy is the most effect measure against climate change, there may be more to the story.
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.
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.
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.
The Return and Earn scheme being introduced in NSW introduces an interesting discussion on the validity of a circular versus linear economy and the trade-off between sustainability and investment returns.
Despite the extraordinary events since its launch in June 2007 – including the Global Financial Crisis, volatile commodity prices, and political upheaval in many parts of the world – the strategy has delivered strong, consistent returns through a focus on valuation, quality and active management.
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.
The Realindex Australian Share Value-Class A Fund is a real achiever that, since its inception in 2008, has delivered long-term outperformance compared to its benchmark for investors.
Equity markets are currently at all-time highs. This has generated returns which, we believe, are unlikely to continue, so we need to think about where returns are likely to come from over the next 10 years. We need to think about how investors can position themselves to take advantage of this. This note highlights why Emerging Markets (EM) Value looks to be a market segment which appears – relatively speaking – to be attractive.
The outlook for the global economy and financial markets looks more uncertain today than it has for a long time. Both interest rates and inflation have risen sharply. There is a growing consensus that much of the world will shortly be experiencing slowing economic growth.
First Sentier Investors announced the appointment of Ashley Conn as Chief Financial and Strategy Officer.
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.
Deputy Head of Global Listed Infrastructure, Andrew Greenup, tells Livewire the most compelling reasons for investors to consider listed infrastructure as part of their portfolios, some common misconceptions, and shares a high conviction stock pick; the world's largest renewables owner.
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.
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.
We crossed six US states meeting over 70 infrastructure management teams as well as customers and suppliers at three conferences. We visited three corporate head offices, several regulators and toured the country’s largest nuclear power plant.
This letter forms the first in a series designed to introduce and explain our approach to sustainability, and the lessons learned so far. We hope that these reflections, drawing on the team’s combined experience, will provide a useful insight.
With strong long term growth prospects and a track record of resilience through economic downturns, this increasingly institutionalised property sector is a defensive play for investors.
Head of Global Property Securities Stephen Hayes: Global city populations continue to grow, driven by urbanisation. The provision of housing for growing populations is a major challenge for many countries and cities. Adequate housing is a factor that influences a city’s mobility of labour, social wellbeing and commerce levels. Government housing policies are typically viewed holistically with policies covering social, private and rental housing. New supply is not always efficient and can be problematic particularly in densely populated cities.
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.
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”).
This final paper is somewhat shorter than the first two, and simply aims to look a little deeper into whether zombie firms appear in Realindex portfolios, and how a Quality factor acts as a repellent for these stocks. This is more important in Value-oriented portfolios as the potential appearance of lower quality “junk” firms, or even zombies, is higher here than in broader universes.
When it comes to sustainable investment in the Asia-Pacific region, there can be some ethical concerns. In this foreign world of investing, concepts of 'short-termism' and 'metric fixation' may be the culprits for some of these practices.
I recently returned from a two-week, coast-to-coast trip across the United States, talking to institutional clients, pension funds and investment consultants. The mood on the ground is one of caution. Rising inflation and interest rates are on everybody’s mind. A war in Europe and spiking oil prices are creating uncertainty. And the possibility of recession hovers at the edge of conversations. During such a period, it’s easy to wonder if there are any safe ports in the investment storm. In this environment, we believe that infrastructure has an important role to play in portfolios. Investments in assets such as toll roads, airports, railroads, utilities and renewables, energy midstream, wireless towers and data centres show their worth in such times. These types of investments have high barriers to entry, structural growth and strong pricing power, giving them the potential to withstand inflation and generate consistent earnings, regardless of the broader economic backdrop. With this in mind, below are three reasons we believe infrastructure investors may be well-placed to weather the geopolitical storms ahead.
In 2020, one group of companies has done particularly well – the popular digital technology companies focused on e-commerce, delivery and entertainment, to name a few industries. In emerging markets, they dominate the Chinese market; but they can also be found in Korea, Southeast Asia, Eastern Europe and Latin America. We do not own many of these in the strategy; and as such, we are often asked: What holds us back? After all, they have performed well and – at least on paper – should have the prerequisite to generate strong returns and free cash flow, given their often high gross margins, negative working capital profiles and asset light nature. While we are not disputing the potential for this in the future, we would argue for cautiousness on most of these projections.
Firstly, regulations are nothing new — it has always been a part of the investment equation. If we look at Hong Kong or Singapore for example, the government would introduce new regulations on the property market from time to time; and in China, the government has introduced a number of new regulations for banks and insurance companies over the years. In fact, last year the government changed the pricing policy on automobile insurance, affecting quite a few Chinese general insurers. Therefore, regulation risk is always something to consider. Secondly, we believe the Chinese government has indeed changed — in terms of their priorities and focus — over the last three to four years. China was particularly focused on economic growth previously; and by all accounts, China has been a major economic miracle. From poverty, it has become the second-largest economy in the world. However, in recent years under the leadership of President Xi Jinping, the Chinese government has started to focus much more on social stability and equality. Thus, the underlying spirit of the recently announced regulations seems to be targeting wealthy entrepreneurs and conglomerates. The goal is to help improve the lives of workers, for parents to ease their burden with children, and so forth. Then, there is the environmental aspect too, with the Chinese government increasingly focused on pollution and carbon neutrality. From that perspective, it certainly looks like the Chinese government is becoming more socialist than it was before. I think that is the trend and to some extent, investors will need to acknowledge and accept it when investing in China.
The emerging markets asset class is extremely varied. It includes democracies and dictatorships, economies reliant on manufacturing and those that export commodities, and – most importantly – some of the very best companies in the world alongside some of the very worst. If the last ten years investing in emerging markets has taught us anything it is that in the long run, quality wins.
Infrastructure describes the physical assets that provide basic services to modern society, including utilities, transport and communication assets. The fundamental, essential nature of the services provided gives global listed infrastructure qualities that can be beneficial to an investment portfolio.
This article was produced in partnership with First Sentier Investors. We firmly believe that active management is crucial when constructing a geared portfolio. A geared investment strategy can be considered a more complex strategy that borrows to invest, ultimately magnifying an investor’s exposure to rising or falling markets.
Though Covid hasn’t yet finished with us, the markets have finished with Covid. In real life, there is still plenty of misery to go around, but in our opinion things have seldom been better for investors. Optimism has served us well, as the money-printing presses have rolled to counter the “unprecedented” threat. In investment, perhaps it is better to be a stupid optimist than a clever pessimist. And, we believe markets do indeed go up most of the 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 almost every meeting that we have with management teams, we will ask about incentivisation. In our view, it is an important question and the answer can be highly revealing about an organisation’s culture and behaviour. While it can be easy to be deceived by articulate CEOs talking up a big game with lots of investor-friendly buzzwords, in our experience what ultimately drives outcomes (at least the ones that management teams can influence) are the incentives. As with most things, striking the right balance is key. If there are no incentives to good performance (and no disincentive for poor performance), companies often end up with capital being systematically mis-allocated without any accountability. This tends to be the case with most State-Owned Enterprises (SOEs), which is one of the reasons we are generally cautious on them. On the other hand, too much of a good thing can also have adverse consequences, which we often see in turbo-charged incentive schemes concentrated among just a few senior executives. While they might lead to exponential growth for a short period of time, the growth is usually not sustainable. After a rapid period of expansion, imbalances are typically built up and when growth inevitably slows it is usually not just one skeleton that falls out of the closet.
Recently I attended the largest US utility conference, the 2024 Edison Electric Institute (EEI) Financial Conference, in Hollywood, Florida. I met with management teams from 26 regulated electric and gas utility companies.
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.
On the anniversary of Lehman's collapse and as Typhoon #10 approached Hong Kong, Martin Lau spent time reflecting on the 1997 Asian Financial Crisis and here discusses if lessons learned are enough to steer us clear of another global financial crisis.
This year’s August 2024 reporting season has concluded with most ASX-listed companies disclosing their profit results and guidance for the 2025 financial year ahead.
The push for achieving a decarbonised economy will see sweeping social and economic change across regional communities in Australia. The new frontier in the march for a greener future in Australia is a focus on a just transition, supported by a Federal Government-backed Net Zero Authority, to ensure workers, industries and communities can seize opportunities in the nation’s net zero transformation.
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.
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