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Global Value Investors' (GVI) Global Industrial Share Fund (GISF) offers a relatively unique, benchmark unaware and

concentrated (40-60 stocks) exposure to the international equities sector. Due to its value orientation and industrials
focus the GISF is ideal for those investors seeking a high component and relative stability of dividend income without
the high volatility often associated with growth managers and the resources sector. Since its inception in March 2005,
GVI's performance has been impressive, managing to outperform its benchmark as well as its peers with relatively low
volatility. Zenith has a sufficient degree of confidence in GVI's ability to continue to meet its objectives over time.
The GVI business was established in November 2004 as a joint initiative between ASX listed, Treasury Group Limited
(33% ownership) and Investors Mutual Limited (67% ownership). An employee option scheme with deferred vesting
periods has now been established. The scheme will eventually see 25% of the business being owned by key
investment staff (currently 13.3% as at April 2008) and acts as an essential retention mechanism for key staff. In
Zenith's opinion, the existence of the options aligns the investment team's interests with those of investors and also
provides a compelling incentive for staff to remain with the firm.
GVI has a small investment team, consisting of 5 investment professionals. The investment team is headed by Roy
Chen who is well regarded by Zenith, with over 20 years industry experience, which included portfolio management
roles at the CEF Group in Taiwan and Primasia in Hong Kong. Chen is a very knowledgeable investor with a deeply
conservative, value-orientated investment philosophy, which is ideally aligned with the investment profile of this fund.
The other senior member of the team is Matthew Saddington who is equally impressive, providing strong support to
Chen. While we believe the GVI investment team lacks the extensive team resources depth of some of their
competitors in international equities, we acknowledge that GVI's concentrated investment universe reduces the need
for a large team. Overall, the key members of the team are well regarded by Zenith and we consider the level of overall
resourcing to be adequate.
There are 3 components to the GVI investment process: Investment Universe Screening; Fundamental Research; and
Portfolio Construction. The GVI investment philosophy and process is appealing in that the manager seeks to provide
investors with attractive long-term returns from an absolute return approach which focuses on investing in industrial
companies with attractive dividend yields. In Zenith's experience, GVI's investment approach and process is unique
amongst the international equities funds available to retail investors. The focus is centred on identifying attractively
valued industrial companies paying high dividends with strong balance sheets, conservative debt levels, consistent
growing earnings and sound management. In addition, the fund is to be substantially hedged (80-90%) back to the
Australian Dollar which is aimed at reducing volatility of returns and ensuring that it is the manager's underlying
security selection that drives the returns to investors. In Zenith's opinion it is refreshing to see an investment process
that has been specifically designed for the personal investor and invests on an absolute return basis which is
consistent with the philosophy of most personal investors.
In conclusion, GVI has exceeded its objectives since inception and there is no doubt that the investment approach and
objectives of the fund are appealing. Overall we believe the GVI Global Industrial Share Fund is an attractive offering
and as such we have assigned it a RECOMMENDED rating.
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GVI Global Industrial Share Fund
30 Jun 2008
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of this research at the end of the document.
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ZENITH INVESTMENT PARTNERS PTY LTD
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Key Features Description
APIR Code TGP0004AU
Asset Class International Shares
Sub-Asset Class Global (Hedged)
Investment Style Value
Benchmark MSCI World ex Aust
Hedged $A
Recommended Investment
Timeframe
5 + years
Head of International Equities Roy Chen
Investment Team Size 6
Performance Analysis
The objective of the fund is to outperform the MSCI World
ex-Aust Index (hedged) over rolling 3 year periods. Since the
inception of the fund in March 2005 GVI has delivered on this
objective, demonstrating robust absolute returns and
managing to outperform relative to its benchmark and other
value-orientated fund managers.
Given the manager's benchmark un-aware approach, tracking
error is not targeted and is expected to be above that of the
median manager. Performance of the fund to date has been
consistent with this expectation over the 3 year period.
Consistency Analysis
Over time, Zenith expects GVI to deliver its strongest excess
returns in periods of falling markets, in line with its
value-orientated investment style.
This performance characteristic is driven by the fact that value
managers often buy defensive, higher dividend paying stocks.
These stocks tend to outperform the broader market when a
"flight to quality" occurs in a falling market.
Risk / Return Analysis
Volatility of this fund must be considered at 2 levels, absolute
volatility (i.e. standard deviation) and relative volatility (i.e.
tracking error). GVI's standard deviation is expected to be
below that of the index and median manager as a result of the
defensive, high dividend paying stocks that populate the
portfolio. Tracking error on the other hand is expected to be
significantly higher than the median manager driven by the fact
that GVI constructs its portfolio without regard for the stock,
industry and country weights of the index.
Zenith is comfortable with GVI's benchmark un-aware
approach, however, it is important that investors understand
that this may lead to a performance profile that is significantly
different to the benchmark over short to medium-term periods.
Investment Personnel
GVI has a small investment team, consisting of 5 investment
professionals. While we consider a 5-member investment team
to be small for the management of an international equities
portfolio, we acknowledge that GVI has a relatively unique
investment approach that focuses on a concentrated
investment universe. For this reason we believe resourcing
within the GVI investment team is adequate, however, we
believe that over time additional staff will be required to
mitigate key person risk and assist with coverage of stocks
within the investment universe. This fact has been
acknowledged by GVI and while they aren't actively seeking
new team members they are always open to new talent and
can foresee a need for additional recruits.
In early 2008 the GVI Executive Committee was established to
assume the management role of the company. This committee
abolished the former position of Chief Executive Officer
performed by Tim Hyett since December 2005. According to
GVI it was simply a formalization of the structure that was
already in place. The committee includes Roy Chen (Managing
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Performance Statistics 3 Yrs
(% p.a.)
2 Yrs
(% p.a.)
1 Yr
(% p.a.)
Performance - Fund 10.14 5.94 -7.99
Performance - Benchmark 7.84 3.35 -13.68
Performance - Median
Manager
7.68 2.93 -14.27
Consistency Statistics 3 Yrs 2 Yrs 1 Yr
History of Monthly Excess
Return (%)
52.78 54.17 66.67
History of Monthly Excess
Return (Rising Mkts %)
48.00 46.67 60.00
History of Monthly Excess
Return (Falling Mkts %)
63.64 66.67 71.43
Risk / Return Statistics 3 Yrs 2 Yrs 1 Yr
Information Ratio - Fund 0.55 0.76 1.46
Information Ratio - Median
Manager
-0.52 -0.51 -0.46
Sharpe Ratio - Fund 0.36 -0.09 -1.14
Sharpe Ratio - Median
Manager
0.10 -0.34 -1.50
Standard Deviation (%
p.a.) - Fund
9.98 10.97 13.52
Standard Deviation (%
p.a.) - Median Manager
11.51 12.18 14.30
Tracking Error (% p.a.) -
Fund
4.18 3.40 3.90
Tracking Error (% p.a.) -
Median Manager
2.82 3.36 3.99
Name Title Time
with
Manager
Roy Chen Head of International
Equities
3 Yr(s)
Matthew Saddington Portfolio Manager /
Equities Analyst
3 Yr(s)
Matthew Hegarty Equities Analyst 3 Yr(s)
Daniel Fitzgerald Equities Analyst 1 Yr(s)
Scott Gilchrist Equities Analyst 5 Mth(s)
Director, Head of Investments), William Tomac (Associate
Director - distribution and marketing) and Conor Byrne (Chief
Operating Officer). Hyett has continued to work closely with
GVI offering consulting advice to the executive committee. In
addition, William Tomac holds the role of Business Manager
and is responsible for managing the business, marketing and
high level administration tasks for GVI. Zenith believes this
change is logical and results in a superior decision making and
management structure.
In addition, Zenith considers the existence of the executive
committee and the Business Manager role to be sensible,
helping the investment team to focus on selecting stocks and
managing the portfolio although there is some risk in Chen's
time being stretched through his new position on the executive
committee.
The investment team is headed by Roy Chen who is well
regarded by Zenith, with over 20 years industry experience,
which included portfolio management roles at the CEF Group
in Taiwan and Primasia in Hong Kong. Chen is a very
knowledgeable investor with a deeply conservative,
value-orientated investment philosophy, which is ideally
aligned with the investment profile of this fund.
The other senior member of the team, Matthew Saddington, is
also impressive, providing strong support to Chen. Saddington
has over 10 years financial services industry experience and
prior to joining GVI he held positions as an equities analyst
role at Boston Company Asset Management and a Research
Associate role at Sceptre Investment Counsel Ltd.
Over the last few years there have been a number of changes
to the team. There have actually been four team departures
since inception (Charles Price, Melinda White, David Faulder
and John Hempton). Daniel Fitzgerald joined the investment
team in July 2007 following the departure of portfolio manager
Charles Price due to ill health. Fitzgerald is responsible for the
coverage of stocks in the Utilities, Healthcare, Materials and
Energy sectors and has a total 7 years investment experience.
His most recent role was at Investors Group International
where he was a Senior Equity Analyst and responsible for the
coverage of European Materials (Chemicals, Pulp & Paper,
Mining and Steel), Energy (Oil & Gas) and the Utilities sectors.
In March 2008, GVI restored its investment team to 5 members
through the hiring of Scott Gilchrist. Gilchrist has 6 years of
investment experience all of which was spent at Platinum
Asset Management where he covered healthcare, consumer
products, capital equipment and resource industries. His new
role will involve research analysis of 3 sectors, those being
Industrials, Materials and Energy. Assisting the investment
team is Ayush Srivastava, who joined GVI as a Research
Assistant after previously spending 2 years in Investors
Mutual's administration area.
Importantly, no senior staff have departed GVI and under the
senior staff's guidance, the team has been able to operate in a
professional manner, keeping the investment process
consistent despite the staff changes. The employee option
scheme, which has come into place following GVI reaching its
3 year growth hurdle, should help to mitigate future staff
turnover, with the options being vested over the next 3 years.
Zenith would eventually like to see GVI increase their staff
numbers towards the 8 member team that has previously been
stated as a goal while maintaining staff stability.
Research responsibilities are allocated broadly along Global
Industry Classification Standard (GICS) sector lines, however,
each analyst can potentially draw their stock ideas from the
entire investment universe. Primary responsibility for each
sector is divided across the 2 senior team members, Chen and
Saddington. It is the responsibility of the team leader to
coordinate research for the sector and ensure adequate
coverage is undertaken. Chen has primary responsibility for
Utilities, Telecom Services, Industrials, Materials and Energy.
Saddington has primary responsibility for Consumer Staples,
Healthcare and Information Technology and Consumer
Discretionary. Matt Hegarty has responsibility for the Financials
sector and along with Daniel Fitzgerald is heavily involved in
idea generation and research across a number of sectors.
The frequency of GVI's international research trip schedule
has been increased since our previous review, with each
analyst expected to undertake 2-3 international trips per year,
each of 1-3 weeks duration. It also appears that GVI has been
successful in obtaining access to company management,
which was an initial concern of Zenith's given GVI's low profile
internationally and low levels of funds under management.
Zenith will continue to monitor GVI's company visitation
schedule and access to company management going forward.
While we believe the GVI investment team lacks the resources
of some of its competitors in international equities, we
acknowledge that GVI's concentrated investment universe
reduces the need for a large team. Overall, the key members
of the team are well regarded by Zenith and we consider the
level of overall resourcing to be adequate.
Investment Process
The GVI investment philosophy is based on the premise that
investment markets are inefficient over the short-medium term,
however, over the long-term a company's share price will
reflect its underlying inherent value. Accordingly, the
investment team adopt a long-term outlook in the assessment
and fundamental valuation of a company.
GVI conducts its own company research in order to determine
which stocks are appropriate for inclusion in the portfolios. The
aim of the process is to take long term positions in these
companies that the investment team identifies as high quality
and representing attractive value.
GVI also believes that dividends are an important long-term
component of the total return to investors. Dividends provide a
stable component of investment return in flat and falling
markets. As a result, GVI has a preference for established
global industrial companies that currently pay or have the
capacity to pay attractive dividends in the future. In addition,
GVI adopts an absolute return objective to its investment
approach. While this investment approach is becoming more
popular in the management of Australian equities, Zenith
believes GVI's adoption of this approach to the management of
international equities is appealing. From this perspective GVI is
"benchmark unaware" and therefore does not consider a
company's weighting in the index when selecting a stock for
the portfolio.
Security Selection
There are essentially 2 components to the GVI security
selection process:
1. Investment Universe Screening
GVI applies a number of screens in order to reduce the
number of securities the investment team focus their research
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efforts on. Zenith views this as an essential element of the
investment process given the small nature of GVI's investment
team. From the global universe of around 40,000 stocks the
manager removes stocks in emerging markets which excludes
around 15,000-20,000 stocks and is designed to limit the
volatility of the fund's returns. They then apply market
capitalisation and liquidity filters removing those stocks with a
market capitalisation of < US$1 billion (which excludes
approximately 20,000 companies) before applying their initial
quality filters and valuation filters. Using the quality and
valuation filters, stocks are excluded if they have: negative
earnings; interest cover < 3 times; a dividend yield < 2.5%; a
price earnings ratio of > 20 times; or a price to book ratio of > 2
times (for banks).
The quality and valuation filters reduce the stock universe by a
further 3,000 stocks (approximately) leaving an investment
universe of approximately 600-700 stocks. However, this
number can fluctuate depending on market conditions and at
the time of review this list had grown to over 1000 stocks. This
list is then classified along GICS sector lines. In order to apply
these filters, GVI subscribes to FactSet and Bloomberg
financial market databases which provide both historical and
consensus company financial numbers. The Research
Assistant is primarily responsible for running these filters.
These filters are applied at least monthly with the resultant
universe of stocks reviewed by all members of the investment
team at a formal monthly meeting.
In previous reviews Zenith was concerned that stocks outside
of this universe were still being considered in exceptional
circumstances. This concern appears to have now been
rectified. We believe this enhances the usefulness of the
screening process and removes an element of subjectivity
upon which stocks outside of these criteria may be included. In
addition, with a small team of 5 people, we believe the team
needs to remain disciplined in their adherence to this process
as it promotes greater focus and efficiency in the stock
universe to be considered further.
2. Fundamental Research
The investment universe is then subjected to peer group
assessment which involves ranking the stocks within each
GICS sector based on Price/Earnings ratio. Additional
valuation measures such as dividend yield, price/cash flow and
price/book value are also used if deemed more appropriate for
a particular sector. Some sectors may also be further broken
down to the GICS sub-sector level before a meaningful
comparison can be made. The analysts also consider a
number of key company qualities in this company peer review
process including: resilient and recurring earnings; strong
balance sheet; a competitive advantage; and the ability to
grow earnings and dividends over time.
This company peer review process then results in each team
member selecting the best prospective stock candidates from
each sector. This process determines the Focus List of around
150 stocks that represent value within each sector and warrant
further research. These stocks are then subjected to stock
specific analysis and assessment which includes:
Each analyst uses a valuation method or combination of
methods that they regard as most suitable for that particular
company. The more commonly used valuation methodology's
include: Price/Earnings ratio; Price/Cashflow; Price/Tangible
Book Value (excludes goodwill); Free Cash Flow Yield;
Dividend Yield; Enterprise Value (EV) / Earnings Before
Interest Taxation Depreciation and Amortisation (EBITDA); Net
Present Value (NPV); Discounted Cash Flow (DCF); and Sum
of the parts analysis.
While Zenith recognises the different nature of company
earnings and business structures from industry to industry, we
would ideally like to see more consistency in the valuation
methodology used throughout GVI's process as we believe this
would facilitate greater consistency of valuation comparisons
of companies from sector to sector. We do acknowledge
however, that GVI has valuation methodology guidelines for
each sector, which should facilitate an element of consistency.
Once the company valuation has been derived this is
compared to the current price of the stock to determine the
degree of under or over valuation. A standard company
research template is then prepared on each company for
presentation and discussion with the rest of the team. This
promotes consistency in the stock selection process.
Portfolio Construction
It is important to note that as GVI is an absolute return
manager, index weightings of companies, industry sectors or
countries are not considered as part of their portfolio
construction approach. In Zenith's view, this is a refreshing
approach to the management of an international equities
portfolio and is consistent with GVI's whole investment
philosophy.
GVI's portfolio construction process is driven by the security
research and selection process. That is, once an analyst has
identified a company they believe represents attractive value,
they present the company to the rest of the investment team in
a standard company report template. This template ensures
consistency of presentation and that all key areas are covered
when presenting the opportunity to the team. This template
includes an executive summary providing key details of the
company and includes a valuation and recommendation
including a position size for the portfolio based on the degree
of undervaluation. This operates on a tier structure as follows:
If Chen agrees with the analyst's recommendation, the stock is
then added to the portfolio using the tiered valuation approach
to determine its maximum initial weighting. It is usual that the
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detailed divisional analysis and modelling of the
company's divisions/businesses;
a strengths, weaknesses, opportunities and threats
(SWOT) analysis of the company. Importantly, the
identification of opportunities also focuses on identifying
particular catalysts for an upward revaluation of the
company's share price;
contact with the company's management where possible
or the company's investor relations representative;
analysis of the company's peers/competitors in the
industry; and
establishing a valuation and therefore target share price
for the company.
Tier 1: over 25% undervalued = 5% maximum stock
weight;
Tier 2: between 15% - 25% undervalued = 3% maximum
stock weight;
Tier 3: between 5% - 15% undervalued = 2% maximum
stock weight; and
Tier 4: less than 5% undervalued = Not bought. Existing
holdings monitored with a view to reducing exposure.
stock is bought up to its maximum weight gradually rather than
all at once. However, in practice it's unlikely that a stock will
ever be allocated its maximum weighting. Chen and
Saddington are responsible for execution of the portfolio's
trades with Chen ultimately responsible for the management of
the portfolio.
Zenith believes the valuation tier structure of GVI's portfolio
construction approach is sound and adds a necessary
discipline to the determination of stock weightings within the
portfolio. In addition, the process ensures that the most
attractive opportunities as identified by the analyst and
endorsed by the investment team occupy the largest
weightings within the portfolio.
As the security valuation process involves determining a
valuation for each company in the portfolio, the portfolio sell
discipline is also driven by the tiered portfolio construction
approach. That is, as the stock price comes within 5% of the
calculated price target, the analyst will review the valuation to
decide if there are any reasons why the price target should be
adjusted. If not, the stock weighting within the portfolio will be
reduced as it exceeds its calculated fair value and removed
from the portfolio if this overvaluation remains. Other reasons
for a stock to be sold from the portfolio include: stock price falls
significantly; fundamental changes to the company's business
model or competitive landscape; or a portfolio stock is
excluded from the GVI investment universe screen.
The portfolio is concentrated (for an international equity fund)
consisting of 40-60 stocks with a bias towards 60 stocks.
However, in the future the number of stocks is likely to
increase to 60-70 stocks. Portfolio turnover is expected to be
low averaging around 30.0% p.a. which is consistent with the
manager's expected average holding period of around 3 years
for companies in the portfolio.
The fund is substantially hedged (target 90% hedged) back
into Australian dollars (AUD). This is monitored on a daily basis
but adjusted on a twice weekly basis. The reason for this is
that the manager wants to ensure that the returns provided to
investors are as a direct result of their stock selection skill and
are not affected by movements in the AUD against other
currencies.
Overall, Zenith believes GVI has designed a portfolio
construction approach that is consistent with the objectives of
the fund. The tiered stock weighting size based on the
calculated target price versus current trading price of
companies provides an excellent discipline for managing the
security weights within the portfolio and determining when
stocks should be sold.
Risk Management
Within the GVI investment process, risk management is
handled at a number of levels. Firstly, the management of risk
from a stock specific perspective is a function of the manager's
security selection screening and research and the portfolio
weighting restrictions for each stock. That is, GVI's stock
screening process aims to eliminate companies that do not
have strong balance sheets, consistent, recurring earnings,
conservative debt levels and attractive dividends. Once these
companies have been screened out it is only those companies
that are assessed as meeting these criteria and being
undervalued that are included in the portfolio. While this
process does not eliminate stock specific risk, it is a relatively
conservative investment approach that avoids investment in
speculative companies with little or no track record.
At the portfolio level, the number of stocks is maintained
between 40-60. However, this is not a hard limit and actually
more likely to be closer to 70. The maximum exposure to any
one company is primarily determined by the tiered valuation
approach and then by the stock drifts limits. The stock drift
limits permit the portfolio's maximum weighting to any one
stock to drift from a maximum of 5% on purchase to 7.5%
through price appreciation. This is a relatively high absolute
weighting to a single stock but is necessary given the
manager's concentrated portfolio.
While GVI's portfolio construction approach has no regard for
the MSCI Index weightings, in an effort to ensure the portfolio
is properly diversified at all times the manager has established
sector (industry) and country weight guidelines. Exposure to a
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Portfolio Constraints Description
Tracking error (% p.a.) No limit, is an ouput
of the investment
process
Weight - Country Rel. Index (%) Country weight is
restricted to 30%
plus drift of 50% of
this (i.e. 15%) giving
maximum of 45%
Weight - GICS Rel. Index (%) Sector weight is
restricted to 25%
plus drift of 50% (i.e.
12.5%) giving
maximum of 37.5%.
Weight - Security Rel. Index (%) Maximum weight to a
single security is
5.0% on purchase
and 7.5% allowing
for price
appreciation.
Portfolio Turnover (% p.a.) max: 30% p.a.
This is the expected
level of turnover and
will vary marginally
over time.
Cash (%) 0% to 20%
Hedging AUD (%) max: 100%
Market capitalisation ($) US$1 Billion
Security Numbers 40 to 60
single sector is restricted to 25% plus 12.5% drift meaning the
portfolio can be up to 37.5% invested in any one sector.
Country exposure is limited to 30% plus 15% drift which could
result in 45% of the portfolio being invested in any one country.
As a point of interest, this is still well below the MSCI Index's
current weighting to the USA, which is in excess of 50%.
The cash weighting of the fund is restricted to a maximum of
20% which is higher than the majority of international equities
managers Zenith has reviewed which averages 10%. In
general Zenith prefers managers to be fully invested as this
assists in providing greater predictability in overall portfolio
asset allocation when combining funds within a portfolio. While
GVI states that the potential cash allocation should be higher
in market conditions where no value can be found, it is hard to
envisage this occurring simultaneously in all of the global
equities markets and sectors GVI invests in. As a result, we
would prefer this maximum cash weighting to be reduced to
10%.
The fund's risk management constraints are materially different
to the majority of international equity funds currently available
to investors, however this reflects the non benchmark aware
approach used by GVI. In summary, the risk management
constraints in place help to ensure that the portfolio will be well
diversified at all times and in Zenith's opinion are appropriate.
Risks of the Fund
As is the case with all global equities based products, the
biggest risk to this fund is a sustained downturn across global
equities markets, which could lead to negative performance.
This risk can be significantly reduced by investors adopting a
medium to long-term (5+ years) investment time frame when
investing in this fund.
Due to the industrials focus of the fund it's also important to
note that any sustained outperformance of the resources
sector may result in the fund's relative underperformance.
Tracking error risk is another risk relevant to this fund, as GVI
is expected to have a tracking error significantly above that of
the median manager. This high tracking error is driven by
GVI's absolute return investment approach, which is likely to
provide very different returns to that of its performance
benchmark (the MSCI World Index $A - Hedged) and its
competitors. In Zenith's opinion, this is not necessarily a bad
thing as the fund may well outperform the benchmark and
competitors over time but investors need to be aware that it
may also underperform from time to time. The structure of the
fund's risk management constraints are likely to result in an
underweight bias in US stocks which may be a large
contributor to the relative performance of the fund.
The other major risk of investing in the fund at this early stage
is that the investment team responsible for managing the fund
is still new and therefore while we believe the makeup of the
team is solid, they are still unproven as an international
equities team. Furthermore, Chen's involvement in the
executive committee means he longer has a sole focus on
investment decisions.
We believe the risks of investing in the fund are partly
mitigated by the nature of the companies that the fund will
invest in. That is, higher dividend paying companies tend to
provide strong defensive qualities in periods of market
correction with the dividend providing a "buffer" which acts to
support the stock price to a larger extent than non dividend
paying companies.
Applications of the Fund
This fund represents a refreshing new entrant to the
international equities sector. Zenith is strongly attracted to the
structure and objectives of the fund from an investor's
perspective. The absolute return approach coupled with a
focus on strong dividend paying companies with strong
balance sheets, conservative debt levels and sound
management and business models is logical and appealing.
As a result, the fund is versatile in terms of its application as
either a "satellite" holding around some more established
international equities funds or forming the core component due
to the funds higher dividend focus and conservative approach.
Based on the investment process of the manager, we believe
the fund will provide higher levels of income than most
international equities funds and will perform best in flat to
moderately rising markets. It should also provide solid
defensive qualities in falling market conditions and is likely to
underperform in over exuberant "bull" market conditions where
company valuations become excessive. Due to these qualities
ideally the fund should be blended with a resource focused or
growth style fund.
Author: Steven Tang
Investment Analyst
Email: steven.tang@zenithpartners.com.au
Ph: (03)9642 3320
Fax: (03)9642 3319
DISCLAIMER: This report is prepared exclusively for clients of Zenith
Investment Partners (Zenith). The report contains recommendations
and advice of a general nature and does not have regard to the
particular circumstances or needs of any specific person who may
read it. Each client should assess either personally or with the
assistance of a licensed financial adviser whether the Zenith
recommendation or advice is appropriate to their situation before
making an investment decision. The information contained in the
report is believed to be reliable, but its completeness and accuracy is
not guaranteed. Opinions expressed may change without notice.
Zenith accepts no liability, whether direct or indirect arising from the
use of information contained in this report. No part of this document is
to be construed as a solicitation to buy or sell any investment. The
performance of the investment in this report is not a representation as
to future performance or likely return. The material contained in this
report is subject to copyright and may not be reproduced without the
consent of the copyright owner. Zenith usually receives a fee for
assessing the fund manager and product(s) described in this
document against accepted criteria considered comprehensive and
objective.
Page 6 of 6
Please refer to the disclaimer relating to the provision
of this research at the end of the document.
www.zenithpartners.com.au
ZENITH INVESTMENT PARTNERS PTY LTD
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3 years Excess Correlation Table
Fund Name Excess
Correlation
Barclays Hedged International Share Fund -0.24
Credit Suisse Fully Hedged International Share
Fund
0.02
Goldman Sachs JBWere Hedged International
WS Fund
0.00
INVESCO Wholesale Global Matrix Fund -
Hedged
0.09
MFS Fully Hedged Global Equity Trust 0.42

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