Australian Equities (Growth) – maximising shareholder value
- Long-standing and distinctive investment philosophy focussed on growing companies that can reinvest above their cost of capital
- Large and experienced team with an established broad market capability – incorporating specialist smaller company expertise
- In-depth industry, stock and valuation analysis is the foundation of identifying investment opportunities
Obtain an active exposure to Australian shares with a team that expertly targets mispriced opportunities for growth
The Australian Equities, Growth team provides a suite of products, including broad based, small cap, imputation, concentrated and geared funds. While our products are designed to meet a range of investment needs, they all share the same investment philosophy – that is we believe growing companies, which generate consistent returns and can reinvest above their cost of capital, provide the greatest shareholder value. Changes to company returns on invested capital often has high explanatory power for stock performance. We use an active, bottom-up and disciplined approach to identify mispriced investment opportunities. The investment process is designed to deliver outperformance through the full investment cycle.
Research and Experience
Our ability to target mispriced stocks is fuelled by one of the largest, most experienced teams specialising in Australian equities
We believe in-depth research and experience is our advantage, as it allows us to target the investment ‘sweet spots’ over a company’s life cycle. We are one of the largest, most experienced equities teams in the domestic share market. Our company visitation program ensures we can build long-term relationships and are actively engaged with senior management and boards. We also use our extensive network of contacts, including unlisted competitors, suppliers and industry experts, to gain insight into share price drivers. The broader market does not necessarily undertake the same in-depth industry analysis, giving us a potential advantage in identifying attractive investment opportunities.
Combining individual stock analysis with scrutiny of macro and thematic factors helps minimise overall portfolio risk
Effective risk management is at the core of what we do. We employ a fundamental, bottom-up analytical framework to identify the key industry and company opportunities and risks. The portfolio manager considers each analyst’s equally distributed buy/hold/sell stock recommendations, alongside other risk factors when constructing a portfolio. Portfolio diversification and risk constraints then act to constrain unsystematic or company-specific risk within the portfolio to targeted levels. A series of quantitative tools are also used to complement the fundamentally derived risk analysis, to ensure that the portfolio is not subject to any broader macro/style risks that might be overlooked when assessing risks at the individual stock/industry level.
Our corporate RI strategy is based upon three strategic pillars of quality, stewardship and engagement.
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. Company meetings provide us with the opportunity to engage on ESG issues and gain greater insight into potential risks and opportunities. It also provides us with the opportunity to positively influence companies towards ESG best practice where appropriate.
Performance and Documents
Source: First Sentier Investors 2019
Performance returns are calculated gross of management fees and net of transaction costs. Performance returns for periods greater than one year are annualised. Past performance is not a reliable indicator of future performance.
In Australia ‘Colonial’, ‘Colonial First State’, ‘CFS’, and ‘First State Global Asset Management’ are trade marks of Colonial Holding Company Limited and ‘Colonial First State Investments‘ is a trade mark of Commonwealth Bank of Australia (the Bank) and all of these trade marks are used by First Sentier Investors under licence.
On 16 September 2019, Colonial First State Global Asset Management (CFSGAM) rebranded to First Sentier Investors. Any content produced prior to this date may be branded CFSGAM and include trade marks that First Sentier Investors is permitted to use under licence. On 21 October 2019, Colonial First State Asset Management (Australia) Limited changed its name to First Sentier Investors (Australia) IM Ltd.
Copyright © CFSGAM Services Pty Limited 2019 (part of First Sentier Investors, a global asset management business. First Sentier Investors is ultimately owned by Mitsubishi UFJ Financial Group, Inc MUFG.)
As one of the largest and most experienced investment teams in the Australian equities market, we offer superior stock picking ability and commercial acumen built from many years of market participation. We have a strong team culture that encourages and rewards independent thought coupled with a shared conviction in the investment process.