Professional Planner|Zenith Fund Awards 2015 – Australian equities (alternative strategies including long/short, income overlay (options))

Professional Planner|Zenith Fund Awards 2015 – Australian equities (alternative strategies including long/short, income overlay (options)) 

Winner Perpetual Investment Management

Zenith says: The Perpetual Share-Plus Long-Short Fund is an active extension Australian equities product managed by the highly rated Perpetual Australian equities team. The fund is managed by Anthony Aboud, who assumed full control from Paul Skamvougeras following his promotion to head of equities. A key differentiating feature of the fund is Aboud’s ability to leverage the long ideas from the broader Perpetual equities team, freeing up his time to focus on short ideas and broader portfolio construction. The fund has consistently generated returns in excess of both the broader benchmark and Perpetual’s flagship long-only strategies.
– Rodney Sebire, senior investment analyst

Zenith sector review: The Australian equities – alternative strategies sector encompasses long/short active extension and variable beta, and income overlay (options) strategies. In addition to traditional stock selection, long/short managers have the ability to generate excess returns through adjusting their net equity exposure, capturing relative value anomalies across stocks/sectors and actively allocating to cash. While a rising Australian sharemarket is important for this category, performance dispersion across stocks and sectors is equally important. The past 12 months have been productive for the sector, with the median manager outperforming the benchmark.

Anthony Aboud, portfolio manager, Perpetual (pictured): There’s been increased volatility, especially in the past few months. I think the key has been taking advantage of that volatility to get good entries both on the long and the short side of the portfolio. Volatility is going to remain. Trying to take advantage, on the long side, of sectors that are out of favour, and trying to pick the right stocks within those sectors, is going to be key. It’s easier said than done – it takes a lot of work, sifting through the wreckage of what’s been quite a lot of very weak sectors, and picking the right stocks. And then on the short side, there’s still a lot of loved sectors out there, and getting the timing right of getting the right short [position] on. We’re bottom-up, very fundamental longs and shorts; we don’t do massive thematics. The trick for us has been we spend a lot of time before we buy something. We don’t try and turn over the portfolio lots. Given we’re fundamental, we have a lot of rigidity [in our process] before we put a position on. We are happy to take positions through volatility if we feel that the fundamentals still stack up. We do a lot of work before we put a position on, rather than put some on, and then things aren’t going so well, so we sell it.

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