The Retirement portfolios’ 12-month performance remains first quartile, and above the peer group benchmark with the embedded risk control in the portfolio protecting retirees from the worst of the year’s volatility. The structural overweight to Australian equities (to capture the benefits of franking credits) detracted this month as domestic equities were unable to keep pace with their global equity counterparts.

Deanne Baker explains how the Retirement portfolios performed over the June quarter.


The information in this video is prepared by Lonsec Investment Solutions Pty Ltd ABN 95 608 837 583 (LIS, we, us, our), a Corporate Authorised Representative (CAR) No. 1236821 of Lonsec Research Pty Ltd ABN 11 151 658 561, AFSL No. 421445 (Lonsec Research). Any express or implied rating or advice presented in this video is limited to general advice and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (“financial circumstances”) of any particular person. Before making an investment decision you must consider your financial circumstances or seek personal financial advice on its appropriateness. Read the Product Disclosure Statement for each financial product before making any decision about whether to acquire a financial product.

Past performance is not a reliable indicator of future performance. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this video, which is drawn from information not verified by LIS. This video may also contain third party material that is subject to copyright. To the extent that copyright subsists in a third party it remains with the original owner and permission may be required to reuse the material.

The information contained in this video is current as at the date of publication. Financial conclusions, ratings and advice are reasonably held at the time of publication but subject to change without notice. LIS assumes no obligation to update this document following publication. This video is not intended for use by a retail client or a member of the public and should not be used or relied upon by any other person. This video is not to be distributed without the consent of LIS. Except for any liability which cannot be excluded, LIS and Lonsec Research, their directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this video or any loss or damage suffered by the reader or any other person as a consequence of relying upon it. Copyright © 2023 Lonsec Investment Solutions Pty Ltd.

You may not reproduce, transmit, disseminate, sell or publish this video without our written consent.

It has been a remarkable turnaround for sustainable portfolios over the last 6 months. Weaker first half financial year performance, has given way to a strong rebound as high quality, profitable, information technology stocks have outperformed the broader market by some margin. The launch of artificial intelligence technologies such as ChatGPT, has created enormous buzz and excitement around potential productivity gains and outsized future earnings of companies across the tech value chain.

Deanne Baker provides an update on the portfolios’ top contributions during the June quarter to the United Nations Sustainable Development Goals (UN SDGs).


The information in this video is prepared by Lonsec Investment Solutions Pty Ltd ABN 95 608 837 583 (LIS, we, us, our), a Corporate Authorised Representative (CAR) No. 1236821 of Lonsec Research Pty Ltd ABN 11 151 658 561, AFSL No. 421445 (Lonsec Research). Any express or implied rating or advice presented in this video is limited to general advice and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (“financial circumstances”) of any particular person. Before making an investment decision you must consider your financial circumstances or seek personal financial advice on its appropriateness. Read the Product Disclosure Statement for each financial product before making any decision about whether to acquire a financial product.

Past performance is not a reliable indicator of future performance. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this video, which is drawn from information not verified by LIS. This video may also contain third party material that is subject to copyright. To the extent that copyright subsists in a third party it remains with the original owner and permission may be required to reuse the material.

The information contained in this video is current as at the date of publication. Financial conclusions, ratings and advice are reasonably held at the time of publication but subject to change without notice. LIS assumes no obligation to update this document following publication. This video is not intended for use by a retail client or a member of the public and should not be used or relied upon by any other person. This video is not to be distributed without the consent of LIS. Except for any liability which cannot be excluded, LIS and Lonsec Research, their directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this video or any loss or damage suffered by the reader or any other person as a consequence of relying upon it. Copyright © 2023 Lonsec Investment Solutions Pty Ltd.

You may not reproduce, transmit, disseminate, sell or publish this video without our written consent.

Over the 12 months to June 30, the portfolios delivered solid absolute returns. This very respectable result masked significant intra-year volatility. The 2023 financial year was characterised by raging inflation, the most aggressive rate rises in history, the re-pricing of all major asset classes, significant shifts in style from growth to value (and back again), and a strong shift in investor sentiment on the back of the buzz generated by artificial intelligence.

Deanne Baker explains how the Multi-Asset portfolios performed over the June quarter.


The information in this video is prepared by Lonsec Investment Solutions Pty Ltd ABN 95 608 837 583 (LIS, we, us, our), a Corporate Authorised Representative (CAR) No. 1236821 of Lonsec Research Pty Ltd ABN 11 151 658 561, AFSL No. 421445 (Lonsec Research). Any express or implied rating or advice presented in this video is limited to general advice and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (“financial circumstances”) of any particular person. Before making an investment decision you must consider your financial circumstances or seek personal financial advice on its appropriateness. Read the Product Disclosure Statement for each financial product before making any decision about whether to acquire a financial product.

Past performance is not a reliable indicator of future performance. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this video, which is drawn from information not verified by LIS. This video may also contain third party material that is subject to copyright. To the extent that copyright subsists in a third party it remains with the original owner and permission may be required to reuse the material.

The information contained in this video is current as at the date of publication. Financial conclusions, ratings and advice are reasonably held at the time of publication but subject to change without notice. LIS assumes no obligation to update this document following publication. This video is not intended for use by a retail client or a member of the public and should not be used or relied upon by any other person. This video is not to be distributed without the consent of LIS. Except for any liability which cannot be excluded, LIS and Lonsec Research, their directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this video or any loss or damage suffered by the reader or any other person as a consequence of relying upon it. Copyright © 2023 Lonsec Investment Solutions Pty Ltd.

You may not reproduce, transmit, disseminate, sell or publish this video without our written consent.

We recently held our annual updates for Super Funds where we discussed the super landscape over the past year and the focus for SuperRatings this financial year. Watch a summary from Kirby Rappell, Executive Director of SuperRatings.


Disclaimer: Presentation issued by SuperRatings Pty Limited ABN 95 100 192 283 AFSL No. 311880 (SuperRatings). The information used in compiling this data comes from sources considered reliable and is not guaranteed to be accurate or complete. Past performance is not a reliable indicator of future performance. Any expressed or implied rating or advice presented in this document is limited to General Advice and based solely on consideration of the merits of the superannuation financial product(s), without considering any person’s particular financial circumstances. The reader should read the Product Disclosure Statement and seek personal advice before making a decision on the financial product.

SuperRatings’ research process relies upon the participation of the superannuation fund or product issuer(s). Should the superannuation fund or product issuer(s) no longer be an active participant in SuperRatings’ research process, SuperRatings reserves the right to withdraw the rating and document at any time and discontinue future coverage of the superannuation and pension financial product(s).

Copyright Disclaimer: © SuperRatings Pty Ltd. All rights reserved. This presentation may also contain third-party material that is subject to copyright. To the extent that copyright subsists in a third party it remains with the original owner and permission may be required to reuse the material. Any unauthorised reproduction of this information is prohibited.

 

Bond markets across a number of developed countries including the US, UK and Germany are currently pricing in a recession. Global stock indices are close to, if not at, all-time highs. What exactly are the capital markets trying to tell us about the state of the economy?

Stock prices are a well-known leading indicator of the business cycle and future economic growth.  They are among a handful of leading economic indicators (LEI) that analysts typically follow when trying to take an overall reading on economic activity. Stock prices have been on a winning streak this year, with Global equities as measured by the MSCI World TR Index AUD up 16% over the 6 months to 31 July 2023. The rally has been led by the US where the launch of artificial intelligence technologies such as ChatGPT, has created enormous buzz and excitement around potential productivity gains and outsized future earnings of companies across the tech value chain.

Bond markets, on the other hand, are taking a much dourer view. Taking the 10-year to two-year Treasury spread, yield curves in the US, UK and Germany are currently inverted.  In Australia, the yield curve, while not yet inverted, is flat by historical standards.  Inverted yield curves are typically good indicators that recession looms.  Inverted yield curves reflect the expectation from bond investors that longer-term interests will fall; a situation typically associated with recessions.

So are bond or equity investors right?  Inverted yield curves, while pretty reliable indicators, can and do give false signals from time to time. Equity markets too, can be prone to over-optimism, often overshooting fundamentals based on sentiment. Weighing the conflicting signals, our view is that we are headed for a period of weaker growth. The equity market rally to date has been narrow and centred around US mega tech stocks.  Should we see greater breadth and participation in this rally, we may have cause to reconsider.  Putting stock prices aside, most other leading indicators are pointing to a further slowdown in the business cycle. Consumer sentiment is extremely low, housing starts are weak, money supply is tightening and Purchasing Manager Indices remain in contractionary territory. To us, these data points lead us to believe that the second half of 2023 continues to present some headwinds for the economy and risk assets in general.

IMPORTANT NOTICE: This document is published by Lonsec Investment Solutions Pty Ltd ACN 608 837 583, a Corporate Authorised Representative (CAR 1236821) (LIS) of Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec Research).  LIS creates the model portfolios it distributes using the investment research provided by Lonsec Research but LIS has not had any involvement in the investment research process for Lonsec Research. LIS and Lonsec Research are owned by Lonsec Holdings Pty Ltd ACN 151 235 406. Please read the following before making any investment decision about any financial product mentioned in this document.

DISCLOSURE AT THE DATE OF PUBLICATION: Lonsec Research receives a fee from the relevant fund manager or product issuer(s) for researching financial products (using objective criteria) which may be referred to in this document. Lonsec Research may also receive a fee from the fund manager or product issuer(s) for subscribing to research content and other Lonsec Research services.  LIS receives a fee for providing the model portfolios to financial services organisations and professionals. LIS’ and Lonsec Research’s fees are not linked to the financial product rating(s) outcome or the inclusion of the financial product(s) in model portfolios. LIS and Lonsec Research and their representatives and/or their associates may hold any financial product(s) referred to in this document, but details of these holdings are not known to the Lonsec Research analyst(s).

WARNINGS: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to general advice and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (“financial circumstances”) of any particular person. Before making an investment decision based on the rating or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances or should seek independent financial advice on its appropriateness.  If the financial advice relates to the acquisition or possible acquisition of a particular financial product, the reader should obtain and consider the Investment Statement or the Product Disclosure Statement for each financial product before making any decision about whether to acquire the financial product.

DISCLAIMER: No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this document, which is drawn from public information not verified by LIS. The information contained in this document is current as at the date of publication. Financial conclusions, ratings and advice are reasonably held at the time of publication but subject to change without notice. LIS assumes no obligation to update this document following publication. Except for any liability which cannot be excluded, LIS and Lonsec Research, their directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this document or any loss or damage suffered by the reader or any other person as a consequence of relying upon it.

Copyright © 2023 Lonsec Investment Solutions Pty Ltd ACN 608 837 583 (LIS). This document may also contain third party supplied material that is subject to copyright.  The same restrictions that apply to LIS copyrighted material, apply to such third-party content.

After a decade of record-low bond yields, fixed income has been making a comeback this year. In Australia, when advisers and investors think of fixed income, they mostly think of term deposits and government bonds, but corporate bonds also make up a significant portion of the global bond market. The global bond market is massive – bigger than the global share market – with different grades of issuers, companies, terms, and structures.

Bond fundamentals

Before we look at the outlook for the corporate bond market, here are some bond fundamentals for you and your clients:

  • Bonds are credit instruments – companies and governments issue bonds as a way of raising money, borrowing funds from investors in the form of bonds.
  • Bonds are usually issued for a fixed term – between one and thirty years. Maturity is the term for which the bond is issued.
  • When you purchase a bond, the bond issuer is legally obliged to pay you regular interest, referred to as coupons. Coupons are usually set at a fixed rate, paid to the bond holder at regular intervals. This is why they are also called fixed income.
  • Bonds are issued with a face value that is to be repaid to the bondholder at maturity. The full face value is referred to as Par and is usually $100.
  • As interest rates go up, bond prices decline. This is because interest rates are used to discount the bond cash flows to arrive at the bond’s price. So, if the denominator goes up and the coupon which is the numerator remains fixed, the prices will decline.
  • Duration and Maturity are not the same thing. When we talk about Duration, we talk about the sensitivity of the bond prices to interest rates. Generally, bonds with long maturities and low coupons have the longest durations. These bonds are more sensitive to a change in market interest rates and thus are more volatile in a changing rate environment.
  • Corporate Bonds carry a rating from one of three big ratings agencies – S&P Global, Moody’s, and Fitch. Investment-grade bonds (with a rating of BBB-/Baa3 and above) have relatively lower risk and lower returns as they have a stronger payment capacity compared to High Yield or below-Investment grade bonds.
  • It is important to remember that, unlike government bonds, corporate bonds do not carry the guarantee of a government and therefore investors’ money is at risk. However, corporate bonds have a lower risk than shares in the same company as they sit higher on the capital preservation ladder. This means that if your bond issuer becomes insolvent, you will have priority over hybrid and equity investors when the proceeds of asset sales are applied.

 Outlook for the corporate bond market

We see two major factors impacting the short to mid-term outlook for corporate bonds – ongoing stress from higher interest rates and the cost of refinancing.

Ongoing stress from higher interest rates

Central banks are close to the end of their current hiking cycle but this “higher for longer” mantra may be a cause of ongoing stress for some corporate bonds. While in most cases, a pause in rate rises is good for risk assets with an initial rally as they have a stronger payment capacity, this time, the current economic landscape is not conducive to a sustained rally.

We are faced with credit tightening, banking client concerns, sticky inflation, and yield curves that have flattened locally and deeply inverted in the USA. An inverted yield curve is unusual and does not happen often which means that the yield on shorter maturity bonds is higher than longer maturity bonds.

In addition, lower-quality corporate bond issuers such as high-yield corporate bonds are at a higher risk of default because higher interest rates will mean they will need operational revenues and minimal cost increases in order to cover interest costs. With corporate debt maturities coming up within the next year, many of these issuers are going to find it difficult to roll over or even refinance their debt obligations.

Cost of refinancing

The bond maturity wall for US Corporate Bonds has been pushed out by several years, especially for high-yield bonds, making refinancing manageable for now. However, if the US Federal Reserve keeps rates higher for an extended period of time, there is a lot of debt that will need to be refinanced at higher levels than most of these companies have ever seen, or at least experienced in decades. It is worth noting that Australian companies do issue a lot of debt in the US market. This may have an effect here whereby the cost of refinancing may see Australian corporates return to Australia to refinance their debt thereby pushing up domestic corporate credit yields.

USD bond maturity wall

Allied to the bonds maturity wall, the global tightening of bank lending standards will have a knock-on effect for lower grade bonds wanting to refinance. We expect lending standards to remain tight into the next year so if these lower-grade borrowers can’t raise funds in the corporate bond market to refinance their bonds, turning to banks will not be much of an option.

Major US investment banks expect High Yield defaults to revert to the long-run average. of around 4% to 5%, lower than previous crisis/recession levels and higher than current levels of less than around 1%. This may also cause, a longer period of defaults, particularly if the US Federal Reserve decided to hold rates higher for longer.

In summary, the outlook for corporate bonds in a higher for longer rate cycle and the credit-tightening environment now has elevated risks but you are now being compensated with much higher running yields. For example, in a two-year US high-yield corporate bond the yield is now approximately 8.88%*, made up of 4.98% government bond yield plus 3.90% spread. The long-term high yield spread average is 5.4% and for recessionary periods 8% above government bond yields. Given current corporate credit fundamentals, spreads are expected to at least move back toward their historical long-term average.

*as at 6 July 2023

IMPORTANT NOTICE: This document is published by Lonsec Investment Solutions Pty Ltd ACN 608 837 583, a Corporate Authorised Representative (CAR 1236821) (LIS) of Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec Research).  LIS creates the model portfolios it distributes using the investment research provided by Lonsec Research but LIS has not had any involvement in the investment research process for Lonsec Research. LIS and Lonsec Research are owned by Lonsec Holdings Pty Ltd ACN 151 235 406. Please read the following before making any investment decision about any financial product mentioned in this document.

DISCLOSURE AT THE DATE OF PUBLICATION: Lonsec Research receives a fee from the relevant fund manager or product issuer(s) for researching financial products (using objective criteria) which may be referred to in this document. Lonsec Research may also receive a fee from the fund manager or product issuer(s) for subscribing to research content and other Lonsec Research services.  LIS receives a fee for providing the model portfolios to financial services organisations and professionals. LIS’ and Lonsec Research’s fees are not linked to the financial product rating(s) outcome or the inclusion of the financial product(s) in model portfolios. LIS and Lonsec Research and their representatives and/or their associates may hold any financial product(s) referred to in this document, but details of these holdings are not known to the Lonsec Research analyst(s).

WARNINGS: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to general advice and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (“financial circumstances”) of any particular person. Before making an investment decision based on the rating or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances or should seek independent financial advice on its appropriateness.  If the financial advice relates to the acquisition or possible acquisition of a particular financial product, the reader should obtain and consider the Investment Statement or the Product Disclosure Statement for each financial product before making any decision about whether to acquire the financial product.

DISCLAIMER: No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this document, which is drawn from public information not verified by LIS. The information contained in this document is current as at the date of publication. Financial conclusions, ratings and advice are reasonably held at the time of publication but subject to change without notice. LIS assumes no obligation to update this document following publication. Except for any liability which cannot be excluded, LIS and Lonsec Research, their directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this document or any loss or damage suffered by the reader or any other person as a consequence of relying upon it.

Copyright © 2023 Lonsec Investment Solutions Pty Ltd ACN 608 837 583 (LIS). This document may also contain third party supplied material that is subject to copyright.  The same restrictions that apply to LIS copyrighted material, apply to such third-party content.

The SuperRatings annual request for information is just around the corner. We’ll be circulating the survey link shortly.

This is your fund’s opportunity to stand out in an increasingly competitive market. We’re reaching out to you ahead of time to ensure you start preparing for it now.

Your responses to the annual survey account for the majority of your fund’s ratings outcome, so we encourage you to give the survey the time and attention it deserves as this will give your fund the most accurate ratings possible.

Did you know that by completing the annual survey in full, you also maximise your fund’s chance at being nominated for an award at the annual SuperRatings award ceremony. This year, we have over 20 award categories, which is even more reason to ensure you complete the SuperRatings annual request for information.

If you don’t receive the link to the survey in the next couple of weeks, make sure to get in touch with your SuperRatings research analyst to ensure we send the link to the right person.

Kirby Rappell, Executive Director, SuperRatings

Global equities have rallied over the last 6 months, with the MSCI AC World ex Australia TR Index AUD returning 7.5% since the start of the year.  The recovery in global risk assets has however, been quite narrow and heavily concentrated in a small number of US mega stocks. In fact, if we zoom in on the US for a moment, 7 of the largest US tech names are up around 50% year to date, while the rest of the US equity market is flat.  The launch of artificial intelligence technologies such as ChatGPT, has created enormous buzz and excitement around potential productivity gains and outsized future earnings of companies across the tech value chain. Unfortunately, when equity recoveries have been this narrow in the past, they have rarely been sustained.

We remain patient and cautious in our positioning.  The economic challenges that have been building over the course of the year have not dissipated, rather we think have only been pushed out into the second half of the year. Cost of living pressures (in the form of higher mortgage costs, food & energy prices) are likely to eventually take their toll on the consumer, and ultimately company earnings as the year progresses.  New Zealand and Germany have already entered a technical recession, with two consecutive quarters of negative growth, while Australia and the US are also staring down weaker growth prospects. Yield curves in both countries are inverted, historically a pretty reliable indicator of impending recession.

Financial conditions are likely to remain tight as central banks keep a foot on the brake via quantitative tightening and continue their hawkish rhetoric, signalling the potential for further rate rises.  While valuations are looking more appealing across a number of asset classes including Australian equities, tight financial conditions coupled with a weakening cyclical environment lead us to believe that the second half of 2023 continues to present some headwinds for risk assets.

While our models are not yet anticipating a deep recession, a period of sub-trend growth warrants a slightly more defensive portfolio positioning. We have neutralised our slightly underweight position in global fixed income, funded by closing out our slightly overweight positions in global listed infrastructure and alternatives. From a valuation perspective, bonds are now looking closer to fair value, and we support the view that traditional fixed income can once again play a defensive role in a diversified the portfolio. We believe that building in some extra defence into the portfolios is prudent as we move into a period of weaker growth.

IMPORTANT NOTICE: This document is published by Lonsec Investment Solutions Pty Ltd ACN 608 837 583, a Corporate Authorised Representative (CAR 1236821) (LIS) of Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec Research).  LIS creates the model portfolios it distributes using the investment research provided by Lonsec Research but LIS has not had any involvement in the investment research process for Lonsec Research. LIS and Lonsec Research are owned by Lonsec Holdings Pty Ltd ACN 151 235 406. Please read the following before making any investment decision about any financial product mentioned in this document.

DISCLOSURE AT THE DATE OF PUBLICATION: Lonsec Research receives a fee from the relevant fund manager or product issuer(s) for researching financial products (using objective criteria) which may be referred to in this document. Lonsec Research may also receive a fee from the fund manager or product issuer(s) for subscribing to research content and other Lonsec Research services.  LIS receives a fee for providing the model portfolios to financial services organisations and professionals. LIS’ and Lonsec Research’s fees are not linked to the financial product rating(s) outcome or the inclusion of the financial product(s) in model portfolios. LIS and Lonsec Research and their representatives and/or their associates may hold any financial product(s) referred to in this document, but details of these holdings are not known to the Lonsec Research analyst(s).

WARNINGS: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to general advice and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (“financial circumstances”) of any particular person. Before making an investment decision based on the rating or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances or should seek independent financial advice on its appropriateness.  If the financial advice relates to the acquisition or possible acquisition of a particular financial product, the reader should obtain and consider the Investment Statement or the Product Disclosure Statement for each financial product before making any decision about whether to acquire the financial product.

DISCLAIMER: No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this document, which is drawn from public information not verified by LIS. The information contained in this document is current as at the date of publication. Financial conclusions, ratings and advice are reasonably held at the time of publication but subject to change without notice. LIS assumes no obligation to update this document following publication. Except for any liability which cannot be excluded, LIS and Lonsec Research, their directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this document or any loss or damage suffered by the reader or any other person as a consequence of relying upon it.

Copyright © 2023 Lonsec Investment Solutions Pty Ltd ACN 608 837 583 (LIS). This document may also contain third party supplied material that is subject to copyright.  The same restrictions that apply to LIS copyrighted material, apply to such third-party content.

Congratulations to all the winners and nominees for this year’s Fund Manager of the Year Awards. For Lonsec and Money Management, these awards are a celebration of the very best of the funds management industry and we will recognise the very best innovations and products and services that improve the investment outcomes of Australians.

As research partner for the awards, we applied the same rigorous approach we take to researching and rating funds to evaluating the nominees and choosing winners in each of the 18 group award categories. It has been an honour to partner with Money Management for these awards and congratulations again to Franklin Templeton for being named Fund Manager of the Year.

Australian Property Securities Fund of the Year 

The nominees for the Australian Property Securities Fund of the Year highlight the variety in the sector by showcasing both A-REIT and ‘real asset’ mandates and differing investment styles. Nominated funds have all been well-rated by Lonsec over an extended period and have been able to deliver consistent risk-adjusted performance over the medium-term.  The nominees are:

  • Cromwell Phoenix Property Securities Fund
  • Martin Currie Real Income Fund – Class A
  • SGH Property Income Fund

Global Property Securities Fund of the Year

The nominees for the Global Property Securities Fund of the Year represent both Australian and off-shore investment firms. These funds, which have been well rated by Lonsec, have navigated a turbulent period for REIT markets well, allowing them to deliver a consistent level of risk-adjusted performance over the medium-term.

  • Ironbark Global Property Securities Fund
  • Quay Global Real Estate Fund – Unhedged
  • UBS CBRE Global Property Securities Fund

Infrastructure Fund of the Year

The nominees for the Infrastructure Fund of the Year are representative of the dynamism in the listed infrastructure space, both by investment style but also the underlying investment structures. The funds have all been well rated by Lonsec over time, with the managers delivering to investors the listed infrastructure premia during a volatile period in markets and meeting their investment objectives.

  • ClearBridge RARE Infrastructure Value Fund — Unhedged
  • CFS FC Global Infrastructure Securities Fund
  • Lazard Global Listed Infrastructure Fund

Unlisted Real Estate Fund of the Year

The nominees for the Unlisted Real Estate Fund of the Year are part of Lonsec’s universe of direct property funds that provide investors with access to a range of commercial and social property sectors. All nominated managers have built strong property capabilities and have demonstrated a commitment to sound capital management over time.

  • Australian Unity Healthcare Property Trust – Wholesale Units
  • Centuria Diversified Property Fund
  • Charter Hall Direct Industrial Fund No.4

Australian Large Cap Equity Fund of the Year

The nominees for the Australian Large Cap Equity Fund of the Year recognise those funds that have been well-rated by Lonsec over an extended period, and those managers that have been able to deliver consistent risk-adjusted performance in line with performance objectives over the medium-term.

  • Allan Gray Australia Equity Fund
  • Dimensional Australian Value Trust
  • DNR Capital Australian Equities High Conviction Portfolio
  • Lazard Select Australian Equity Fund (W Class)
  • Quest Australian Equities Concentrated Portfolio SMA

Australian Small Cap Equity Fund of the Year

The nominees for the Australian Small Cap Equity Fund of the Year recognise those funds that have successfully delivered on investment objectives, demonstrated superior stock selection and have been well-rated by Lonsec over an extended period.

  • First Sentier Wholesale Australian Small Companies Fund
  • OC Dynamic Equity Fund
  • Spheria Australian Smaller Companies Fund

Global Equity Fund of the Year

The nominees for Global Equity Fund of the Year have demonstrated ability to consistently meet their investment objectives, have a track record in applying their investment research and portfolio construction processes, as well as being rated ‘Recommended’ or higher by Lonsec.

  • Arrowstreet Global Equity Fund
  • Barrow Hanley Global Share Fund
  • Lazard Global Equity Franchise Fund
  • PM Capital Global Companies Fund
  • Realindex Global Share Value – Class A

Global Emerging Market Equity Fund of the Year

The nominees for Global Emerging Market Equity Fund of the Year have been sourced from Lonsec’s universe of Global Emerging Markets sector, including funds within the Regional Asia and India sub-sector. The award recognises funds that have been highly rated by Lonsec over the past three years, demonstrated asset allocation and security selection skills, and consistently delivered on its investment objectives.

  • Fidelity Asia Fund
  • FSSA Asian Growth Fund
  • Lazard Emerging Markets Equity Fund

Multi-Asset Fund of the Year

The nominees for the Multi-Asset Fund of the year recognise those products that have been well rated by Lonsec over an extended period of time, and those Managers that have been able to consistently apply their investment process, meet investment objectives through the cycle, and demonstrate portfolio management skill in asset allocation and security selection

  • Australian Retirement Trust – Super Savings – Growth
  • BlackRock Tactical Growth Fund – Class D
  • CareSuper – Sustainable Balanced
  • ipac Income Generator (Class K)
  • Perpetual Balanced Growth Fund

Passive – Equity Fund of the Year

The Passive Equity Fund of Year award recognises an equity based strategy that has demonstrated a strong track record of success with respect to its underlying index, a superior liquidity profile plus costs that are at least in-line with peers.

  • Betashares Australia 200 ETF
  • iShares Core S&P/ASX 200 ETF
  • SPDR S&P World ex Australia Carbon Control Fund
  • VanEck Australian Equal Weight ETF
  • Vanguard US Total Market Shares Index ETF

Passive – Other Asset Class Fund of the Year

The Passive Other-Asset class Fund of Year award considers all the passive fixed income, commodities, or alternative strategies within the Lonsec universe. It recognises the Fund with a strong track record of success with respect to its underlying index, a superior liquidity profile plus costs that are at least in-line with peers.

  • Betashares Australian Bank Senior Floating Rate Bond ETF
  • Global X Physical Gold ETF
  • iShares Core Composite Bond ETF
  • iShares Global Bond Index Fund
  • VanEck Australian Floating Rate ETF

Australian Fixed Income

The nominees for the Australian fixed income category are well rated by Lonsec over an extended period of time. The award recognises managers who have the ability to deliver consistent returns while providing downside protection during challenging markets which are a testament to their robust research and risk management processes, skills and expertise.

  • Janus Henderson Australian Fixed Interest Fund
  • Macquarie Australian Fixed Interest Fund
  • Pendal Sustainable Australian Fixed Interest Fund
  • Perpetual Active Fixed Interest Fund (Class A Units)
  • Western Asset Australian Bond Fund – Class A
  • Yarra Enhanced Income Fund

Global Fixed Income of the Year

As with the previous Australian Fixed Income award, the nominees for the Global fixed income category are well-rated by Lonsec over an extended period of time. The award recognises managers who have the ability to deliver consistent returns while providing downside protection during challenging markets which is a testament to their robust research and risk management processes, skills, and expertise.

  • Bentham Global Income Fund
  • Brandywine Global Opportunistic Fixed Income Fund – Class A
  • Perpetual Dynamic Fixed Income Fund
  • PIMCO Income Fund – Wholesale Class
  • T. Rowe Price Dynamic Global Bond Fund – I Class

Alternatives Fund of the Year

The nominees for the Alternatives fund of the year recognise those products that have demonstrated a track record of success, offer several competitive advantages against their closest peers and have been rated highly by Lonsec for at least three review cycles. Further, over the long term, each of these Funds has met or exceeded their respective investment objectives, achieved favourable absolute returns in a risk-adjusted manner while providing diversification to investors’ broader portfolios

  • Australian Retirement Trust – Super Savings – Diversified Alternatives
  • CC Sage Capital Absolute Return Fund
  • Hamilton Lane Global Private Assets Fund (AUD)

Responsible Investment Fund of the Year

The nominees for the Responsible Investment Fund of the year recognise those products that have demonstrated a clear integration of ESG into their investment process and deliver a portfolio with a high alignment with the Sustainable Development Goals as well as having at least a recommended rating from Lonsec.

  • Ausbil Active Sustainable Equity Fund
  • Australian Ethical Emerging Companies Fund (Wholesale)
  • Candriam Sustainable Global Equity Fund
  • Impax Sustainable Leaders Fund

Innovation Award of the Year

The Innovation Award recognises a manager that has brought a differentiated product to the Australian market.  Differentiation can take the form of fee leadership, product structural evolution or additive capabilites to standard asset class products.

  • Betashares Capital
  • Generation Life
  • L1 Capital

Emerging Manager of the Year

The nominees for Emerging Manager of the Year have been selected by Lonsec’s team of Sector Managers. To be eligible for this award, nominees must have a track record of five years or less within the Australian intermediated market, and have at least one product that Lonsec has assigned a ‘Recommended’ or higher rating.

  • Aikya Investment Management
  • Fortlake Asset Management
  • Pzena Investment Management
  • Ruffer LLP
  • Skerryvore Asset Management

Fund Manager of the Year

To be eligible for the Fund Manager of the Year Award, Managers must have demonstrated a sound investment culture and good governance over an investment cycle and across a number of asset classes.

  • BlackRock Investment Management (Australia)
  • Franklin Templeton Australia
  • Lazard Asset Management
  • Macquarie Asset Management
  • VanEck

Disclaimer: Lonsec Research Pty Ltd (ABN 11 151 658 561 AFSL 421445) (Lonsec) are acting as a research partner for the Fund Manager of the Year Awards (Awards) issued by Momentum Media Group Pty Ltd on 22 June 2023 The Awards are determined using Lonsec proprietary methodologies, are solely statements of opinion, subjective in nature and must not be used as the sole basis for investment decisions. The Awards do not represent recommendations to purchase, hold or sell any products or make any other investment decisions. Investors must seek independent financial advice before making any investment decision and must consider the appropriateness of the information, having regard to their objectives, financial situation, and needs. Past performance is not an indication of future performance. Awards are current for 12 months from the date awarded and are subject to change at any time. Lonsec does not represent these Awards to be guarantees nor should they be viewed as an assessment of a fund or the funds’ underlying securities’ creditworthiness. Lonsec receives a fee from the financial product issuer(s) for researching the financial product(s), using objective criteria. Lonsec rating(s) outcome is not linked to the fee or the Award. Lonsec and its associates do not receive any other compensation or material benefits from product issuers or third parties in connection with the Award. Lonsec makes no representation, warranty or undertaking in relation to the accuracy or completeness of the Awards. Lonsec assumes no obligation to update the Awards after publication. The Award is for the exclusive use of the client for whom it is presented and should not be used or relied upon by any other person unless with express permission from Lonsec. Except for any liability which cannot be excluded, Lonsec, its directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this document and any Award or any loss or damage suffered by the reader or any other person as a consequence of relying upon it. ©Lonsec 2023. All rights reserved.

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Important information: Any express or implied rating or advice is limited to general advice, it doesn’t consider any personal needs, goals or objectives. Before making any decision about financial products, consider whether it is personally appropriate for you in light of your personal circumstances. Obtain and consider the Product Disclosure Statement for each financial product and seek professional personal advice before making any decisions regarding a financial product.

Important information: Any express or implied rating or advice is limited to general advice, it doesn’t consider any personal needs, goals or objectives.  Before making any decision about financial products, consider whether it is personally appropriate for you in light of your personal circumstances. Obtain and consider the Product Disclosure Statement for each financial product and seek professional personal advice before making any decisions regarding a financial product.