Professional Planner|Zenith Fund Awards 2015 – international equities (global)

Winner: Arrowstreet Capital/Macquarie Professional Series

Zenith says: Arrowstreet Capital provides investors with a quantitative and style-neutral exposure to international equities. Zenith holds Arrowstreet’s investment team in high regard and has been impressed by its experience and expertise, as well as the firm’s proactive research agenda. Zenith believes Arrowstreet utilises a differentiated approach towards identifying unique data sources, conducting focused research and implementing model enhancements in a timely fashion. Impressively, Arrowstreet has consistently produced strong outperformance of the benchmark over multiple periods of assessment.
– Bronwen Moncrieff, head of research

Zenith sector review: The global equity sector remains one of Zenith’s largest categories and is highly competitive, comprising many different strategies. The past 12 months have seen yet another year of strong returns for global equities, both at an absolute level and relative to other asset classes. As a result of significant developments in sectors such as energy and materials, the past 12 months have seen an increase in the level of returns dispersion, providing active managers with more scope and opportunities to generate outperformance. Unhedged global equities products have enjoyed superior returns relative to their hedged peers. This result was not surprising, given the declining Australian dollar over the period, enhancing unhedged returns.

Megan Aubrey, executive director, head of Macquarie Investment Management Affiliated Manager Business (pictured): Macquarie Professional Series has been working with Arrowstreet since 2006 and we’re obviously thrilled to work with a manager of this calibre. They’ve got an investment team that really focuses on investment fundamentals, but also they use a lot of quantitative techniques to analyse a much broader range of stocks. So they’re using their fundamental understanding but looking at characteristics of individual stocks and looking at indirect effects that can come across to a stock: what country is it in; what impact does it have in terms of the sectors; and even indirect linkages between stocks that might not appear obvious – because of their quantitative skills they can find these linkages and have a look at what impact that has on individual companies. They look for the companies with the highest expected returns, and they build a portfolio from those companies. But the key differentiator is their ongoing research capability: they are always looking for new ideas, new ways to research companies, and they have managed to stay ahead of their peers in that regard.

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