DNR Capital Australian Emerging Companies Fund retains ‘Highly Recommended’ rating by Zenith
Leading investment research house Zenith Investment Partners has retained its ‘Highly Recommended’ rating for DNR Capital’s Australian Emerging Companies Fund[1], highlighting the fact that “the Fund has significantly outperformed the benchmark since inception (in 2018).”
The Fund, managed by DNR Capital offers investors a relatively concentrated, exposure to quality Australian smaller companies. It has posted an annualised return of 11.23% since its inception in August 2018, outperforming the S&P/ASX Small Ordinaries Total Return Index by 8.08%[2].
This rating also reflects Zenith’s “high regard for DNR Capital’s robust investment process, which aims to identify high-quality companies trading at attractive valuations.”
Furthermore, Zenith believes the Fund is a highly attractive investment option within the Australian smaller companies peer group and believes the Fund is well placed to deliver upon its investment objectives.
The report highlights the robust security selection process adopted by DNR Capital and says “Zenith seeks to identify Funds that can outperform in over 50% of months in all market conditions, as we believe this represents consistency of manager skill. In addition, we view a strategy’s ability to produce stronger upside capture ratios relative to downside capture ratios as an attractive feature.
“The Fund has achieved both outcomes since inception. It has displayed greater consistency of outperformance in rising markets relative to declining markets. The Fund’s tracking error has remained significantly higher than its peers, which is consistent with DNR Capital’s concentrated and benchmark-unaware approach.”
Zenith acknowledges that both Sam Twidale and Mark Sedawie, who have joint responsibility for the Fund, are capable investors with complementary backgrounds and skill sets.
DNR Capital Australian Emerging Companies Fund Portfolio Manager, Sam Twidale says “We are pleased to retain this high rating from Zenith.
“We continue to focus on positioning the portfolio in quality businesses with attractive valuation upside. Key overweight positions are across the Consumer Discretionary, Technology and Financials sectors. Of particular focus are management teams reinvesting cash flows at high returns on incremental capital, and where the runway for organic growth remains substantial.
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