Andrew Gowen

Bell Asset Management has appointed global equities leader Andrew Gowen to the newly-created role of director of research and portfolio manager, following an extensive global search.

Mr Gowen joins Bell from Lombard Odier in London, where he co-managed the long-term outperforming World Brands fund (c.$1bn USD), focussing on high quality, growth stocks in the Consumer and Technology sectors.

Michael Lovett, chief executive officer of Bell, says Mr Gowen has strong research acumen, honed over 25 years working in global equities across the UK and US, including more than 15 years as a portfolio manager.

“The appointment of Andrew is part of our ongoing strategy for long-term growth. His appointment will enhance our research and portfolio management capabilities to optimise client outcomes, while supporting chief investment officer Ned Bell who has built a resilient and successful global equities capability over 20 years, and whose leadership remains our cornerstone. Our strategy and investment philosophy remain the same, and we’ve retained a loyal pool of talent.

“Andrew has a strong track record of delivering high alpha, and brings a global network of relationships with top CEOs. In his role as director of research, he will lead efforts to strengthen Bell’s research capabilities and cultivate a high performing team. His role is central to supporting clients with even more in-depth and actionable market analysis,” says Mr Lovett.

In addition to the newly created role, Matt Saddington and Andrew Sleeman have been promoted to portfolio manager, a role they held at previous firms. The team will transition to a model where each strategy is managed by existing portfolio managers, Ned Bell and Joel Connell, alongside a dedicated third co-portfolio manager.

“These strategic decisions will allow us to optimise client outcomes, while ensuring that Bell is well-equipped for future growth and success,” says chief investment officer Ned Bell.

“We are confident we’ve found an exceptional candidate to drive our long-term strategic goals, and proud to foster our internal talent.”

Mr Bell also acknowledged the contributions made by portfolio manager Adrian Martuccio and senior global equities analyst Nicole Mardell, who are pursuing external opportunities following the restructure.

“We sincerely thank Adrian and Nicole for their service and loyalty, and wish them well,” said Mr Bell.

“Adrian has been a valuable member of the investment team for almost 18 years. He joined the firm when it was a small, two-person boutique with under $500m AUM. During his tenure, Adrian has been a key contributor to the asset management business, which has grown to around $5b. We acknowledge his significant contribution to consistent client outcomes over the long term, and look forward to following his continued success.”

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Ned Bell

Bell Asset Management, a global equities boutique manager, today announced that it had been awarded $500 million global small and mid-cap equity mandate from industry super fund, Hostplus

Hostplus, CEO, David Elia commented: “We look forward to working with Bell Asset Management to manage a Global SMID strategy for Hostplus’ developed markets portfolio. Bell’s strong long-term performance record, the quality of the team and a disciplined investment approach were the key factors in our making them part of our growing and diversified portfolio. We expect this strategy to add resilience to Hostplus’ asset class structure in light of the increasing market uncertainty.”

Ned Bell, Chief Investment Officer of Bell Asset Management commented: “We are delighted to have been selected by Hostplus, after an extensive due diligence process. We’re looking forward to working with the Hostplus team to manage funds on their members’ behalf. We understand the importance of this decision and greatly appreciate the opportunity.”

Rob Sullivan, Managing Director, Strategy and Distribution, of Bell Asset Management said: “We are seeing increasing demand for this segment of the market as investors look for sources of alpha at lower levels of risk versus other growth options. We look forward to building a strong and long partnership with Hostplus and delivering the best results we possibly can for its members.”

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Ned Bell

Global equities boutique manager, Bell Asset Management is thrilled to announce that it has won the Fund Manager of the Year award for the Undiscovered Manager category at the Morningstar Australia Awards 2022, announced on Friday 25 February.

The annual Awards recognise the best of the Australian fund management profession that have made substantial contributions to investors’ success as selected by Morningstar’s manager research analysts. Bell Asset Management was nominated as a finalist for the 2022 Morningstar Fund Manager of the Year in both the Global Equities and Undiscovered categories, Australia.

Commenting on the award, Ned Bell, Chief Investment Officer, said, “We are delighted to receive this award that recognises our strong track record of investing in global equities and our skilled and highly experienced investment team.

“Over more than 20 years we have developed a disciplined, research-led approach to stock selection, that has produced consistent returns for our clients through a variety of market cycles,” Mr Bell added.

Over the year to December 2021, the Bell Global Equities Fund (Platform Class) rose 32.5%, solidly outperforming the benchmark MSCI World ex Australia Index which returned 26.9% for the period.

Bell Asset Management’s (BAM) overall philosophy is to identify companies with sustainable competitive advantages that can consistently generate above average returns on capital.

Responsible investing is an important part of BAM’s investment approach. At BAM, ESG investing is not only about excluding certain types of investments, but rather a tool that is actively employed in all stages of the investment process to construct portfolios that aim to generate materially better returns and manage risks.

The award finalists and winners were determined by a combination of qualitative research by Morningstar’s Manager Research analysts, as well as risk-adjusted medium-to-long term track records and performance in the 2021 calendar year.

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Ned Bell

Global equities boutique manager, Bell Asset Management has announced that its Bell Global Emerging Companies Fund’s strategy (the strategy) has been added to the Colonial First State FirstChoice Investment menu.

The strategy provides exposure to a diversified portfolio of 30-60 high quality, profitable and liquid global small and mid-cap (SMID) companies with strong franchises. It aims to deliver long term capital growth and targets a higher ESG portfolio rating than the benchmark (MSCI World SMID Cap Index). Based on Morningstar’s fund report as at 31 December 2021, the Bell Global Emerging Companies Fund is ranked No. 1 over 5 years and No.1 over 3 months in the Equity World Mid/Small Category. It has also achieved a Sustainability rating of High (based on Sustainalytics company-level analysis used in the calculation of Morningstar’s Sustainability Score^[1].

Bell Asset Management believes the appeal of global SMID cap companies continues in 2022 following strong performance by the asset class last year. And the inclusion to the FirstChoice Investment menu further reflects the growing demand we are seeing for this strategy from advisers, consultants and investors seeking to diversify away from mega cap global equities.

Bell Asset Management, Chief Investment Officer, Ned Bell, said: “Many of the SMID companies we are exposed to have come through the pandemic with efficiency gains and strong balance sheets, and, we believe we will continue to see an upside in SMID earnings over the next five years.  We believe that our investment approach of maintaining a very high-quality bias without the commensurate valuation risk will hold us in extremely good stead for what we think will be a more volatile 2022 for global markets.”

For the year to 31 December 2021, the Bell Global Emerging Companies Fund returned 29.8% outperforming its benchmark by 5.9%, net of fees, and 15.8% pa since inception (June 2016), outperforming the benchmark by 2.2% pa, net of fees.

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[1] Morningstar as at 31 October 2021

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Ned Bell

Global equities boutique manager, Bell Asset Management is pleased to launch an environmental, social and governance (ESG) fund for Australian retail and wholesale investors – the Bell Global Sustainable Fund. Research house, Zenith Investment Partners has awarded the Bell Global Sustainable Fund a ‘Recommended’ rating in its first review of the Fund.

The growth in demand for ESG strategies has prompted Bell Asset Management to offer this strategy more broadly to wholesale and retail investors via a retail offering – providing access to its long history and expertise in building responsible investment portfolios.

The Fund is an actively managed, concentrated portfolio of global equities that provides the opportunity for long-term capital growth by investing in companies that are leaders in incorporating ESG principles into their operations.

“Since the establishment of Bell Asset Management in 2003, we have had a strong commitment to the integration of ESG across all our strategies and funds,” said Ned Bell Chief Investment Officer of Bell Asset Management. “The launch of our Global Sustainable Fund is a natural progression for us as it is strongly supported by our investment style.

“With the rise of responsible investing in Australia, investors are increasingly seeking investments that reflect their values and goals to address a variety of pressing environment and social issues, including climate change, labour issues and governance,” said Mr Bell.

Bell employs a disciplined investment framework combined with broader ESG specific activities, including ESG screening active ESG analysis and engagement with the companies held in its funds.

“We believe integrating ESG factors into our investment process delivers superior long-term returns. As stewards of our client’s capital, active ownership and engagement is vital to not only the success of our investments but also is in the best interests of our investors. We actively engage with companies to understand ESG risks and to influence their behaviour on ESG matters,” added Mr Bell.

The Bell Global Sustainable Fund invests in a concentrated portfolio of around 40 global companies and targets ESG characteristics that are far superior to those of its Benchmark.

The carbon footprint of the portfolio is currently 74.7% lower than its Benchmark. Bell is a signatory to the United Nations Principles for Responsible Investment (UNPRI) and is a member of the Responsible Investment Association of Australasia.

(RIAA) Bell Asset Management has been managing global equities strategies since 2003. This is the third Fund managed by Bell Asset Management available to the wholesale and retail market, alongside the Bell Global Equities Fund and Bell Global Emerging Companies Fund.

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Ned Bell

Bell Asset Management, a Melbourne-based specialist boutique global equity manager managing over $3.5 billion in assets, announces a joint venture distribution partnership with Spouting Rock Asset Management, LLC (Spouting Rock), a multi-boutique manager platform providing investment solutions and services.

The strategic partnership will create a distribution platform for Bell Asset Management’s global equity strategies in the Americas, including the development of several collective investment trusts. Led by CIO Ned Bell and co-Portfolio Manager Adrian Martuccio, Bell Asset Management, with a track record of more than 18 years, provides pro long-only, fundamental bottom-up global equity solutions to a diversified investor base, including institutional, wholesale, retail and high-net-worth clients.

Bell Asset Management has a long history of managing assets for US pension funds and offers both global all-cap and SMID-cap strategies. Additionally, Bell Asset Management is committed to integrating Environmental, Social and Governance (ESG) issues within its investment process. Their disciplined framework is combined with stewardship and ESG-specific activities such as screening, analysis, active engagement and proxy voting with companies within the portfolios.

“Leveraging our existing network and expanding further into the U.S. market is the next step in the evolution of Bell Asset Management,” says CIO Ned Bell. “Spouting Rock’s trusted relationships, forward-thinking investment approach and shared services model will be invaluable to our team as we bring our investment solutions to the Americas.”

Spouting Rock is dedicated to providing alternative, traditional and thematic investment solutions that help enhance portfolios and protect wealth. This strategic partnership is the latest addition to the firm’s curated manager platform of well-vetted, active investment solutions.

“We’re excited to welcome our Australian partners to the Spouting Rock family,” says Andrew Smith, chief executive of Spouting Rock. “For nearly two decades, Ned and Adrian have built several highly successful strategies across global equities. Bell Asset Management’s complementary strategies, ESG capabilities and unparalleled professionalism serve as a strong foundation for this partnership.”

Spouting Rock Asset Management is located in Bryn Mawr, Pennsylvannia.

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Ned Bell

Global equities boutique manager Bell Asset Management believes company earnings growth, especially in the small to mid-cap sector, will continue to provide great opportunities for investors despite signs of a slowdown in global GDP growth and rising inflation.

At a virtual event held in Melbourne, Ned Bell, Chief Investment Officer, Bell Asset Management, said the outlook on global growth was changing because of clear signs of a slowdown in China, led by a drop in property market activity.

“If you look at the most recent Chinese GDP figures, growth came in at 4.9% in Q3, down from 7.9% in the previous quarter. That’s a big drop, and if you think property investment represents 30% of Chinese GDP, it’s a big part of the Chinese economy”, said Mr Bell.

On the positive side, Mr Bell said consumer spending has maintained its robust level during 2021, especially in the US, and that is set to continue to drive growth into next year.

Bell Asset Management is forecasting global GDP to grow by 4.5% in 2022, moderating from an expected 5.9% this year. China’s growth rate is likely to drop from 8.1% this year to around 5.5% in 2022.

The rising oil price and sharp increases in other commodity prices, however, look set to underpin a steadily growing inflation rate, which is being exacerbated by the prospect of a sharp pick up in wages.

“Wage inflation is becoming more of an issue, and we believe this is going to be an issue for some time. One of the side effects of Covid-19 is that you have a lot of people rethinking their lives and their willingness to work, and this is causing some real labour constraints across multiple geographies and multiple industries,” he said.

“You have a situation where GDP is starting to moderate at the same time as inflation is rising,” Mr Bell said. He believes the rise in the inflation outlook and the decelerating growth in China could have a big impact on emerging markets.

“I think the earnings risk in emerging markets is quite meaningful,” he said.

Earnings rebound will drive markets

Despite the changing economic backdrop, the corporate earnings outlook across most markets remains very positive, according to Mr Bell. He pointed out there had been a 37% growth in earnings per share in 2021 for companies in the MSCI World Index but the market had only recovered about 30% from pre-Covid levels.

“Earnings have had this amazing recovery, but the market hasn’t necessarily kept up,” Mr Bell said. He noted this gap between earnings growth and share price recovery was most pronounced among small and mid-cap companies (SMID).

“In the small and mid-cap market, the disconnect between the earnings recovery and the price recovery is effectively around 40%. That represents a massive opportunity,” Mr Bell said.

“The earnings recovery is being driven by a revenue recovery driven by government measures to help the economy but also a lot of the temporary cost reductions driven by Covid-19 are likely to become more permanent. I don’t think this is very well understood by the market generally,” he said.

Pragmatic and integrated approach to ESG investing

During the event, Mr Bell talked about responsible investing and Bell’s approach to Environmental, Social and Corporate Governance (ESG) investing.

“We have a pragmatic and integrated approach to ESG. As a quality focused investor we are naturally aligned with companies that not only have very good ESG characteristics, but they need little encouragement to put in place policies to improve their ESG outcomes,” Mr Bell said.

He said a key approach by Bell Asset Management is to assess the ESG risks facing a company and then identify what the company is doing to alleviate them and encourage the company to share these views.

Facebook shares a sell

This approach had led Bell Asset Management to sell its entire position in Facebook.

“Facebook have had ESG issues for some time and effectively have been on watch for us for about two years,” Mr Bell said. We’ve been looking to see their response to the criticism they have faced from regulators, especially in the U.S. We have got to the point where we felt that they are not doing enough. We ultimately got to the point where we felt they were not willing to make some hard decisions to improve their outcome. And their unwillingness to improve their game will ultimately have an impact on their earnings,” Mr Bell said.

On the buy side, Mr Bell singled out three small cap firms − GN Group, Intertek and Amedisys Inc – which have recently been added to the portfolios after a pull back in their share price.

“What all these names have in common is that we have been patient in buying into them, waiting for the right price. Looking ahead, over the next 12 to 18 months, we are confident these companies will see some earnings expansion,” Mr Bell said.

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Ned Bell

Global equities boutique manager Bell Asset Management has hit a key milestone with its global small and mid-cap strategy, Bell Global Emerging Companies Fund (Fund), reaching a five-year track record and producing strong returns for investors.

Over the last 5 years to 31 August 2021, the Fund has returned 16.6%pa, outperforming its benchmark MSCI World SMID Cap Index by 2.6% pa. Performance over the shorter term has also been strong with the Fund appreciating by 26.7% this calendar year to 31 August 2021, an outperformance over the benchmark by 3.5%.

Commenting on the milestone, Ned Bell, Chief Investment Officer, said he was pleased with the Fund’s performance to date, and that the portfolio is well positioned for the coming 12-18 months.

“We have been researching and investing in global small and mid-cap (SMID) stocks since 2003 and over this time, we have developed a comprehensive and in-depth understanding of this specialist sector. The Bell Global Emerging Companies Fund consists of a portfolio of 30-60 high quality companies in North America, Europe and Asia, whose earnings are dictated by their robust business models and strong franchises. Our quality at a reasonable price philosophy and strong investment process has allowed us to deliver investors robust risk/return outcomes even during periods of market dislocation and volatility.”

Over this time, Bell Asset Management has seen a marked increase in the take-up of SMID allocations across investor and model portfolios.

“We have long advocated for clients to consider an allocation to global SMID companies and we are seeing widespread acceptance as many investors look to complement a growth allocation to global equities with global SMID stocks. We believe, global SMID stocks should play an important growth role in global portfolios going forward as they have less valuation risk than large cap growth stocks, less absolute risk than emerging markets and less liquidity risk than small caps.

Looking ahead, we believe global equity markets are currently transitioning from a period dominated by the immediate post-COVID-19 economic recovery to a period where inflationary pressures linger, and economic growth decelerates.” said Mr Bell.

The Bell Global Emerging Companies Fund was recently nominated by Zenith Investment Partners as a finalist for its inaugural International Equities − Global Small Cap category.

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Ned Bell

Global equities boutique manager Bell Asset Management believes that the global SMID cap earnings recovery that investors want to see still has a long way to play out but will continue to drive strong performance based on how SMID cap earnings re-bounded after the ‘dot-com’, and GFC market drawdown.

At a virtual event held in Melbourne, Bell Asset Management CIO, Ned Bell, said that last year was tough for global earnings, with global small cap stock earnings falling by 50%, and global equities as a whole falling by 30%.

“The biggest earnings test of all time was last year. The pandemic last year really shook-up global markets, with earnings growth year-on-year falling 53%”, said Mr Bell

“When the markets tipped over in Q1 last year, we saw small and mid-cap stocks hit the hardest, the most illiquid parts of the market had the rug pulled out from underneath them. However, looking at this year, Q1 earnings were exceptionally strong for the companies we’re invested in, and we expect to see a strong Q2.

“Our SMID strategy generated good performance in the last 12 months – the earnings of our companies did not get crushed so the Fund fared well for investors. Not having exposure to the extreme growth end of the market, because of our valuation discipline, has meant a slight drag on performance. . However, going into an inflationary environment where very expensive stocks get beaten up will mean we’ll go from a headwind to a tailwind.

“Businesses are factoring in a more subdued outlook for next year, telling us that this upgrade earnings cycle still has a long way to play out. More broadly, we are still one year into a five-year recovery, so we can see that the projected steepness of the earnings recovery has a long way to go.” said Mr Bell.

Business bucking the trend during COVID benefitting in the future

Mr Bell believes that those businesses that grew last year benefitted from COVID and were able to take advantage of the environment and build on their strong franchises.

“The highest quality SMID names have emerged stronger through COVID – Pool Corp, Thule, Tractor supply, Yeti – all evolved and moved to be able to support consumers and employees alike.

“They are what we call, the COVID opportunists – high quality businesses, benefitting from positive sales and growth, their earnings growth is exceptional, and we expect to see high-level returns.

“The opportunity for them will be global expansion, and that is something we have not yet seen,” continued Mr Bell.

During the event, Mr Bell also talked about the strong ESG rating of the stocks in the Bell SMID portfolio vs the benchmark and how investors don’t generally consider global SMID stocks when considering ESG investing.  However, Bell believes they should look closely at those businesses that have a strong ESG ethic and how they addressed this during COVID.

“Most investors don’t assume to invest in SMID cap stocks for their ESG portfolio but that’s a mistake”, says Mr Bell. “We take a very active, pragmatic, integrated approach to ESG investing and we look at how each business addresses the ESG risks most prevalent to the company in question.  We look for companies that have the ability to pull a lever that reduces the ESG risk in question.

“COVID is a fine example of this – how businesses reacted to social issues, when employees and customers were at their most vulnerable. Things like additional leave measures for employees, steering customers away from stores to online, relying heavily on supply chain and an increase in jobs, that’s the kind of social governance we’ve seen from some of the businesses in our portfolio.

“Investors can have their cake and eat it too – you can invest in an ESG portfolio and get good returns”, added Mr Bell.

Looking forward – 2021 and beyond

Mr Bell believes we should expect more volatility in earnings as whole moving forward.

“Outside of our portfolio of high-quality companies there is a much bigger universe of companies that have a higher volatility of earnings.

“We can’t get too excited for earning expectations in 2022. Rising interest rates and inflation can be a jolt to earnings will affect the growth rate of some companies and will start to have a bigger impact on their bottom line.

“While COVID is still with us, it could be a handbrake to growth trajectory for companies that are economically sensitive, like consumer and industrials.

“We are paying close attention to the shape of the economic and earnings recovery and believe global SMID is well positioned to take advantage of a post COVID-19 world,” concluded Mr Bell.

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Ned Bell

Global equities boutique manager Bell Asset Management today announced that its Bell Global Emerging Companies Fund (the Fund) has been added to IOOF’s environmental, social and governance (ESG) model portfolio.

The addition to IOOF’s suite of ethical investments means Australian investors can now access a diversified portfolio of 30-60 high quality, profitable and liquid global small and mid-cap (SMID) companies with strong franchises, through its ‘quality’ at a reasonable price approach. The Fund targets a higher ESG portfolio rating than its benchmark (MSCI World SMID Cap Index).

The Fund has also been added to Macquarie Investment Manager/Consolidator and Macquarie Super Manager/Consolidator, broadening access to the global SMID strategy.

IOOF Research has developed the ESG portfolio to enable its financial adviser network to meet the growing demand of its clients for sustainable investments. In selecting its managers, IOOF Research considers a stringent set of return criteria and the application of capital with consideration to a variety of ESG issues.

Commenting on the announcement, Ned Bell, Chief Investment Officer of Bell Asset Management, said: “With responsible investing on the rise in Australia, ethical investors are demanding more from asset managers and we are proud to offer a strategy where ESG screening of global small and mid-cap companies has been an integral part of the investment process since the Fund’s inception.

“We are pleased to be able to provide IOOF advisers with a quality, global equity small and mid-cap solution that aims to deliver both competitive returns and positive social and environmental outcomes,” Mr Bell added.

For the year to 31 May 2020, the Bell Global Emerging Companies Fund returned 11.6% pa outperforming its benchmark by 7.4% pa, net of fees, and 12.0% pa since inception (June 2016), outperforming the benchmark by 2.6% pa, net of fees.

Bell Asset Management is led by investment veteran Ned Bell and has been managing global equities strategies since 2003. The Bell Global Equities Fund (Global Core  strategy) and the  Bell Global Emerging Companies Fund (Global SMID strategy) are distributed to the intermediary market through Channel Capital.

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