Harvey Kalman

Equity Trustees (EQT) and its investment manager partner Dundas Global Investors (Dundas) have made the EQT Dundas Global Equity Fund available on the mFund Settlement Service, bringing the number of co-branded funds distributed through Equity Trustees to 15.

The mFund Settlement Service is an ASX initiative that allows investors to buy and sell units in selected unlisted managed funds (mFund), through a process similar to investing in shares.  They can be bought and sold through their ASX stockbroker online, in person or through a financial adviser who uses a stockbroking service on their behalf.

EQT Dundas Global Equity Fund invests in 60-80 leading global companies from developed and emerging markets with a minimum stock capitation of US$1 billion. The objective of the fund is to invest in stocks with high real book value growth and growing dividend income to generate greater compound returns with lower volatility.

The fund aims to deliver rolling five-year returns in excess of 2.5 per cent of the capital return of the MSCI All Country World Index (ex Australia) before fees.

The mFund Settlement Service offers a number of advantages over the traditional way that investors use managed funds, and, in the case of self-managed superannuation funds (SMSFs) in particular, mFund can help with improving portfolio diversification, says Harvey Kalman, Head of Equity Trustees’ Corporate Trustee Services.

“Of the $500 billion in the SMSF pot, $200 billion is already invested through the ASX. But by investing only in ASX equities, SMSF’s have limited the diversification possibility of their funds,” Mr Kalman says.

“With the addition of the EQT Dundas Global Equity Fund investors now have access to all asset classes through Equity Trustees’ co-branded funds including: international equities, fixed interest, Australian equities including large cap, small companies, franchise, dividend income and concentrated as well as global and Australian listed property securities,” Mr Kalman says.

Equity Trustees was one of the first foundation members of the service and, together with its investment manager partners, Dundas, PIMCO, EQT, LaSalle and SG Hiscock & Company, offers a diversified range of funds through the service for retail investors.

Funds available on the service from Equity Trustees and its investment partner managers are:

Equity Trustees:  

• EQT Wholesale Flagship Fund
• EQT Australian Equity Income Fund

Dundas Global Investors:        

• EQT Dundas Global Equity Fund

PIMCO Australia:    

• PIMCO EQT Wholesale Global Credit Fund
• PIMCO EQT Wholesale Diversified Fixed Interest Fund
• PIMCO EQT Wholesale Global Bond Fund
• PIMCO EQT Wholesale Australian Bond Fund
• PIMCO EQT Wholesale Australian Focus Fund
• PIMCO EQT Wholesale Unconstrained Bond Fund

SG Hiscock & Company:    

• SGH 20 (Australian equities)
• SGH ICE (Australian equities)
• EQT SGH Wholesale Property Income Fund
• EQT SGH Wholesale Small Companies Fund

LaSalle Investment Management:

• EQT SGH LaSalle Global Listed Property Securities Trust
• EQT SGH LaSalle Global Property-Rich Trust

“The mFund settlement service can provide portfolio diversification quickly and easily as with even one transaction with one mFund, investors can gain access to a range of underlying investments and asset classes that may have otherwise been out of reach,” Mr Kalman concludes.

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The mFund Settlement Service is an ASX initiative that allows investors to buy and sell units in selected unlisted managed funds (mFunds), through a process similar to investing in shares.  They can be bought and sold through their ASX stockbroker online, in person or through a financial adviser who uses a stockbroking service on their behalf.

Mr Harvey Kalman, head of EQT corporate fiduciary and financial services, said Equity Trustees was the first foundation member of the service and, together with its investment manager partners, EQT, PIMCO, LaSalle and SG Hiscock & Company, offers a diversified range of funds through the service for retail investors.

“In all EQT has 14 funds currently available on the mFund Settlement Service which means investors will now have access to all asset classes through mFund, with the exception of International Equities which will be available in June,” Mr Kalman says.

“Investors have access to fixed interest, Australian equities including large cap, small companies, franchise, dividend income and concentrated, and global and Australian listed property securities.”

Marcus Christoe from ASX said: “EQT as a foundation member brings a significant opportunity to provide investors and their advisers with access to a growing range of investment options in a way that is easier and more efficient; removing paper based applications and cumbersome identification procedure from the process. The service will provide investors already familiar with transacting shares using an ASX stockbroker access to unlisted managed funds.”

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Callum Burns

Companies that hold assets which are difficult to replicate, such as brands, licenses, patents, distribution rights, logistical capability and a captive client base, and operate these difficult to replicate assets with the objective of entrenching their products in the marketplace, should be in the sights of investors and advisers looking for superior medium-to-long term performance, says Callum Burns Portfolio Manager from SG Hiscock & Company (SGH).

Mr Burns says SGH ICE, the recent winner of the Morningstar undiscovered fund award, invests in ASX listed companies that have (or will have) a business franchise that meets this criteria. The features of a business franchise include:

• It is a good business
• It possesses a sustainable competitive advantage
• It is difficult for clients to discontinue using the product or service
• Often has pricing power, ie. can increase their product prices with minimal negative impact on the customer base.
• Possesses a moat around the business

“These industrial companies typically deliver more certain earnings growth,” Mr Burns says.

“The core premise is to identify stocks that have a sustainable competitive edge, and assets that are difficult to replicate, and for this to be demonstrated by consistent and secure earnings growth.”

David Myers National Sales Manager at Equity Trustees, responsible entity for the SGH ICE fund, said: “We believe the fund invests in the safe end of small caps, so can make up a reasonable portion of the broader Australian equities asset class in an investor’s portfolio.”

The top five holdings in the SG Hiscock ICE fund are National Storage REIT, Resmed, GBST, Cover More and AMP.

Key contributors to performance for February were Carsales, Sky Network Television, AMP, Cover-More and Seek

“Although it was the winner of the Morningstar Australia Fund Manager of the Year: Undiscovered Manager Category for 2014, the SGH ICE fund is eight years old, and has been proven over some of the most testing market conditions in decades. It has provided investors with a net return of 11.7 per cent a year since inception, compared to 2.1 per cent a year. for the Small Cap Industrial Index and 5.6 per cent a year for the ASX 300 Accumulation Index,” Mr Burns said.

It holds a portfolio of approximately 30-50 predominantly ASX listed securities.

In naming the fund the winner of the Undiscovered Manager category last month, Morningstar Australia said: “SGH ICE Portfolio Manager Callum Burns’ creative approach to small-cap investing involves scouring the market for companies with the traits of a quality franchise, which possess entrenched market positions, assets hard to replicate, and pricing power ability. The combination of Burns’ shrewd insights and the well-reasoned approach make SGH ICE deserving of wider attention.”

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