The co-founder of Brisbane-based DNR Capital, Jamie Nicol, says 20 years of beating the market is down to an eye for quality stocks, smart recruitment and decades of hard work.
Nicol’s approach has helped DNR’s flagship High Conviction Australian Equities Fund return 12.9 per cent a year before fees, versus the 9.3 per cent for its benchmark, the SP/ASX 200 Index. The fund, with about $5 billion under management, has beaten its benchmark during cycles including the global financial crisis, European debt crisis, mining booms, pandemic disruption and this year’s tech stock crash.
“Hence why we try to get businesses when there’s value on offer,” he says. “Ultimately, everybody else is trying to find those quality characteristics. For us, that [value] comes down to three key inefficiencies we try to exploit. One is just traditional growth where you take a longer-term view of markets. You see a good quality company reinvesting capital and the growth comes through.
On a broader basis, the fund is overweight in the mining sector, with holdings such as South32 helping it return 17.6 per cent over the past year, which is 7.4 per cent ahead of the SToday, DNR runs four Australian equities funds including its Australian Equities Socially Responsible Fund, Australian Equities Income Fund and a small-cap Australian Equities Emerging Companies Fund.has returned 22.1 per cent a year since inception in December 2017 before fees, which is 6.
“You can find opportunities through the use of data and analytics, but it is available to a much bigger audience. Conversely, continuous disclosure regime and professional investor relations means meetings with company management are less insightful, they are more ‘on message’,” he says. The popularity of passive investing and index-tracking funds also means a diversified client base is important to be a really successful asset manager, according to Nicol.
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Source: FinancialReview - 🏆 2. / 90 Read more »