Prices & performance
Show fund factsheets & data
Strategy Overview
Key Facts
Exit Price:
Price Date:
* This is an annualised interest rate from the past seven days. For actual performance for our Cash Funds, please view the performance page.
Strategy Overview
Key Facts
Why invest in Small and Mid Cap Companies?
By favouring companies with sustainable competitive advantages, strong financials and predictable earnings we seek to deliver superior returns and protect from downside risks.
Value is discovered through a bottom-up investment approach with an emphasis on industry, financials and management.
We have delivered consistent absolute returns through all investment cycles over the medium and long term.
The Australian mid caps space is characterised by successful companies with strong management teams, a successful business strategy, strong cash flow, a competitive advantage, access to debt markets and, perhaps most importantly, the hunger and capacity to grow.
How we invest in Australian equities
A small company to watch
NEXTDC, a premier data centre operator, is just one of many high-quality small companies operating across all areas of the Australian economy.
By favouring companies with sustainable competitive advantages, strong financials and predictable earnings, we seek to deliver superior returns and minimise downside risks. Value is discovered through a bottom-up investment approach.
Stock price performance of NEXTDC on the ASX
Source: Bloomberg. Data to 30 June 2020.
More data than stars
There will be 40 times more bytes of data than stars in the known universe by 2020, according to the World Economic Forum.
The team invested in Australian data centre operator NEXTDC in 2014 because they could see that organisations’ data requirements are becoming so large, there is little choice but to outsource to the professionals.
NEXTDC generates strong cash flow from long term customer contracts – and their clients’ growing data demands. Given the exponential pace of demand, NEXTDC can confidently reinvest this cash flow in even more data capacity, delivering returns to shareholders above their cost of capital.
Today, NEXTDC remains a significant position in the small company portfolios. As corporate Australia experiments with new technologies such as Blockchain, 5G and Artificial Intelligence, we expect the demand for NEXTDC’s access to popular cloud vendors will grow.
1. FY18 results restated for comparability in this document (unless otherwise indicated) according to new accounting standards AASB 9, AASB 15 and AASB 16, which NEXTDC adopted on 1 July 2018.
2.FY19 figures exclude distribution income from NEXTDC’s investment in Asia Pacific Data Centre Group (APDC) of $1.3m, transaction costs (including landholder duty) related to the acquisition and wind up of APDC of $9.0m, gains on extinguishment of property leases of $2.4m, as well as costs related to review works in Singapore and Japan of $0.8m. FY18 figures exclude APDC distribution income of $3.2m and APDC transaction costs of $1.8m.
NEXTDC FY19 Results, 29 August 2019.
Dawn Kanelleas
Head of Australian Small and Mid-Caps Companies
The niche where function always trumps fashion
Small appliance company Breville is an iconic Australian success story. While many of its competitors are price and fashion led, Breville is truly engineering led, solving consumer problems with a broad range of innovative appliances including an exceptional range of coffee, toastie, waffle and pizza makers.
It has flawlessly executed a fast growing and sustainable expansion into niche but highly scalable markets in the US, UK and Europe. While we have owned and followed this stock for some time, management quality is one of the key drivers of conviction, and our position has built up in line with increasing confidence around the strategy put in place by CEO Jim Clayton.
He has been the steward of the business since July 2015, constructing a recipe for success through supply chain redesign. The company facilitates direct fulfilment and has invested in product research and development and increased marketing support.
In Australia and New Zealand, Breville earned $124 million in sales in 2019, which they doubled in the United States. In Europe they earned half, but at current growth rates of 35%, Europe is poised to pass Breville’s home market in the near future.
Any stock mentioned does not constitute an offer or inducement to enter into any investment activity.
Responsible investment is led by engagement
Our assessment of Australian small and mid cap companies includes criteria related to practice, commitment and disclosure of ESG issues by company management, and performance relative to peers. As part of our commitment to responsible investment, we have active, direct dialogue with many company board members and senior management on material ESG issues.
In 2019, senior management from Iress approached our team to discuss revising their long-term incentive plans. We welcomed the opportunity to contribute to the development of effective long term incentive structures for senior executives. This helped foster alignment and ensured appropriate stewardship accountabilities towards stakeholders and the future of the businesses. Iress continues to be an overweight position in our portfolios.
View more responsible investment case studies
Any stock mentioned does not constitute an offer or inducement to enter into any investment activity.
Meet Dawn Kanelleas
When she’s not gleaning new perspectives from art exhibitions large and small, Dawn Kanelleas curates a portfolio of Australia’s best up-and-coming companies.
Meet the Australian Small and Mid Cap Companies team
Dawn Kanelleas
Michael Joukhador
Pavlos Totsis
Tahlia Gugusheff
Want to know more?
Contact your Relationship Manager
Get the right experience for you
Your location
:
Australia
Australia & NZ
-
Australia
-
New Zealand
Asia
-
Hong Kong (English)
-
Hong Kong (Chinese)
-
Singapore
-
Japan