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Ella Brown doesn’t mince her words. AMP Capital’s head of fundamental equities says some Australian boutique fund managers have an inflated reputation.
“Just because people are in a boutique it doesn’t mean they have more commitment to the product than us at AMP Capital. We have very passionate portfolio managers,” says Brown.
She says there has been “an illusion of greatness” around some who have been perceived as “hot investors.”
“Their performance has proved otherwise,” says Brown.
AMP Capital’s core equity fund has had annual gross returns of 8.4 per cent since May 10, 2000. The S&P/ASX 200 Index is up 7.3 per cent a year on average during the same period.
The company’s sustainable share fund has had gross annual returns of 7.3 per cent since February 21, 2001. The S&P/ASX 200 Index has gained 6.7 per cent on average during the same period.
“I don’t think investors are permanently out of the equity market at all,” says Brown, a University of Chicago graduate who worked 18 years in London at ABN Amro Group, Credit Suisse Group and JPMorgan Chase & Co.
Still, the Canadian native acknowledges widespread disillusionment with Australian stock funds, many of which have lost money since 2008.
Dinner party conversations during bull and bear markets are different, says Brown.
When markets are rising many say they do a better job at investing than the professionals. When markets swoon many blame fund managers, she says.
Brown is keen to convince Australians who have about $390 billion in self-managed superannuation funds to entrust some of their investing to her 13 member team.
AMP Capital sometime by March 31 will sell a stock fund that will invest in as many as 35 companies.
Brown also plans to offer a fund that will invest in high-dividend, fully franked stocks aimed at retired and soon to be retired Australians.
“Retirees have been an underserved segment” by Australian asset managers, says Brown.
She is also looking to tap international investor demand for exposure to Australia’s mining stocks.
AMP Capital has hired New Zealander John Payne, who has worked in Hong Kong and London for 24 years, to start a global resources fund.
The company has about $123 billion in assets under management and is the investment unit of AMP Ltd.
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One should never confuse Passion with skill or performance. Nor “commitment to the product” with “dog product”. I guess there is a reason all the great Portfolio Managers in Australia left a big name- low tracking error- closet index hugging- beta chasing organisation with too much money to enable it to outperform- investment manager with more BDMs than analysts, and started their own Boutique. Probably something to do with dysfunctional management, portfolio restrictions borne of retention focused management decisions, and working with squibs. Is this is a case of “thou protesteth too much” meets “Chip on Shoulder” perhaps?
I personally find it hilarous that so many think successful investing is about being ” passionate”.
I am passionate about my family, food, wine, sports, culture etc
I am dispassionate when it comes to investing.. read some Ben Graham for a basic primer
And yes I am a boutique PM, with returns that flog those of AMP…with a very small team…
sheer arrogance from Ms Brown….
Take fees out of those gross returns and no doubt the punters will have got a bit less than benchmark. AMP’s commitment is best judged by their stop start attitude to building the business, particularly offshore. So go the growth by acquisition route to give the appearanc of success. It’s a laugh to see them entering the resources field, only about 10 years too late, but lets see their numbers in 5 years to judge how they go.
Retirees underserved, hasn’t AMP been supposedly serving that market for years – is this an acceptanc of failure?
Why do you think industry superfundv are making in roads now adays
I don’t think this should be a forum to grind axes. Comments about job background or personal ability aren’t really the point of the article. (Not sure what it was). While as a company the likes of AMP, BT, Securitor, Perpetual ING etc are havens for mates and plodders who have found a home amongst some extremely talented peoples, by and large the great majority are just dinosaurs. However, as a day to day door knocking BDM (ahem- boutiques only- by choice), I think what is apparent from what I am seeing is that there has been a significant shift in adviser allocations over the past 18 months. That is, presently no – or very little- money is going into Aust Equity Managed Funds. Advisers did not find they did what was expected through the GFC. Compounded with FOFA meaning increased fee scrutiny to advisers, what I am seeing is more and more advisers using Index for beta, and_then_finding satellites to produce the alpha. Also, Index is no longer just Vanguard and (cough) Dimensional. Rather, advisers HAVE started to use “cheaper index funds” in ETFs. This is a massive change in the way portfolios are being built and revenue multiples for banks and aligned distribution networks. I believe the $500m one of the IMAs just picked up was a tipping point for them. And in truth, from tax efficiency, we all knew the day of a pooled tax unit trust would come to an end.Fund manager who do no adapt and innovate will wither, just as Perpetual is seeing billion$ walk out the door. My irrelevant opinion is that I do not believe the large chop-shop fund managers will be able to adapt as fast as boutiques, and have not. The sentiment from some here reflects the antipathy towards these fund managers