Lonsec upgrades DNR Capital’s Australian Equities Income Portfolio to ‘Recommended’

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Jamie Nicol

Jamie Nicol

Boutique Australian equity investment manager DNR Capital has been awarded a “RECOMMEND” status by Lonsec Research Pty Ltd (Lonsec) for the DNR Capital Australian Equities Income Portfolio.

The portfolio’s performance record has been strong, outperforming the S&P/ASX 200 Industrials Index by 2.5% p.a. since its December 2007 inception The concentrated, ‘long only’ Australian equities portfolio is focused on achieving a growing, sustainable dividend yield and is specifically designed for investors who can utilize franking credits.

The research house views positively the quality of DNR’s lead portfolio manager, Jamie Nicol who “brings seasoned Australian equities experience to the strategy.”

It adds “Pleasingly, the addition of Scott Kelly to the portfolio management line up increases the income focus of the investment approach.”

Investment portfolio manager Scott Kelly said: “We are very pleased that a leading research house recognises that DNR possesses good pedigree in the Australian equities space.”

The portfolio typically comprises 15 to 30 stocks, with any one stock comprising no more than 15% of the portfolio.

“Lonsec believes this is a natural corollary of the Manager’s strict quality screening process which significantly reduces the investable universe.”

Lonsec notes: “The manager’s investment style can be described as growth-at-reasonable-price or GARP, displaying both ‘growth’ and ‘quality’ style biases. The underlying investment philosophy centres on five ‘quality’ factors which they (DNR Capital) believe contribute to medium to-long term outperformance: earnings strength; superior industry position; a sound balance sheet; strong company management; and low ESG risk.”

Commenting on dividend sustainability and growth Lonsec said: “The manager uses a mix of quantitative screens and qualitative measures including dividend policy, dividend trend, franking level, payout ratio and capital intensity to gauge the robustness and trend in dividend of the underlying security.

Further, Lonsec noted the portfolio is “suitable for blending with other Australian equities strategies, including value, growth, absolute return and small cap products.”

The portfolios five top contributing stocks in its most recent monthly performance report were Aurizon Holdings, MYOB, Scentre, TPG Telecom and Lendlease.

The Model Portfolio is available on the major platforms offering SMA capability.. DNR Capital current manages in excess of $2.5billion.

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