Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
… as Hyperion bags three Morningstar awards
Hyperion Asset Management is Morningstar’s ‘Fund Manager of the Year’ as well as the top Australian large and small-cap manager, it was announced at the annual awards gathering on Friday night (February 26).
A contender with Morningstar for the past three years in a row, the manager has already picked up the Money Magazine ‘Best of the Best’ award for 2021. This year’s large-cap Morningstar award was its second in a row. It was runner-up in the Morningstar small-cap category last year.
The research house cited the Brisbane-based boutique, which also has a global equities capability, as having “rigorous fundamental research and a genuine long-term approach” which enabled the firm to shine.
“CIO Mark Arnold and deputy CIO Jason Orthman lead a team of well-tenured analysts and portfolio managers,” Morningstar said. It also had an impressive lineup of strategies which consistently outperformed peers and its benchmarks.
Aman Ramrakha, Morningstar’s Australasia director of manager research ratings, said the 2021 winners had proven themselves to be excellent stewards of fund shareholders’ capital. “Australian investors are well served by a solid lineup of quality managers,” he said.
The Morningstar awards methodology uses a mix of qualitative research, risk-adjusted medium to long-term performance and performance in the 2020 calendar year. The other winners are:
- Undiscovered manager: Atlas Infrastructure
- Fixed interest: Legg Mason Western Asset
- Global equities: T. Rowe Price
- Listed property and infrastructure: Ironbark Paladin Property Securities, and
- Multi-sector manager: Vanguard Investments.
With the Western Asset award as best fund manager in fixed interest, Morningstar said the manager was impressive in both Australian and global bonds.
“Now under new ownership, Western Asset’s large team of fixed income specialists continue to show remarkable stewardship,” Morningstar said. Franklin Templeton acquired Legg Mason in a global deal last year but pledged to retain the multi-affiliate model which Legg Mason formerly employed.
Atlas Infrastructure has had strong growth in the institutional investor space for its listed infrastructure style, even though the institutional market tends to prefer unlisted infrastructure, because of the greater control they offer investors.
Morningstar said Atlas was worthy of attention from retail investors”. The manager had an experienced team spread between London and Sydney which formed the bedrock of “this promising strategy”, Morningstar said.
