Aussie equities for long term growth
This week, Money asks Morningstar where to invest: its pick is the Ausbil Active Australian Equity fund, for long term growth.
The fund invests in a broad portfolio of listed Australian shares assessed by Ausbil's investment team as providing the greatest opportunities for appreciation over the coming 12 months.
The fund aims to achieve returns (before fees and taxes) in excess of the benchmark over the medium to long term with moderate tax-effective income.
The fund is designed for investors who wish to benefit from the long term capital gains available from share investments and who are comfortable with fluctuations in capital value in the short and medium term.
Ausbil Australian Active Equity is a compelling option for large-cap Australian share exposure.
The firm is steered by a highly experienced pair that pursues a time-tested process that jells top-down and bottom-up insights effectively.
Paul Xiradis, the CEO and head of equities, is the key man here, but he's well supported by co-head of equities John Grace.
There's also an ample team of analysts providing stock-specific input.
The firm has experienced minimal staff turnover, having had only a couple of departures since 2007, the most recent being chief economist John Honan, who was replaced by Jim Chronis in mid-2014.
Chronis came in with similar experience and views, so it's been a fairly smooth transition so far.
The investment process starts with a top-down view that identifies macro trends and sectors that stand to benefit in the short to medium term.
Next the team aims to identify mispriced securities. Its main focus is on earnings, in particular earnings revisions.
The team believes that outperformance comes from identifying these revisions at an early stage, and while no style is targeted it lends itself to a growth tilt.
Ausbil isn't afraid to back itself with a relatively high-conviction portfolio, especially among its top holdings.
Ausbil has also come through a change in ownership in sound fashion despite uncertainty through a sale process that concluded in February 2014 when New York Life Investment Management acquired its previous majority owner.
A seasoned investment team with a settled process makes Ausbil Australian Active Equity a fine long-term investment.
Key fund data
Management fee: 0.82% a year. Morningstar analyst rating: silver Minimum initial investment: $20,000 Role in portfolio: Core