Research house Lonsec has upgraded the Platypus Australian Equities Fund and the Platypus Systematic Growth Fund to ‘Recommended’ ratings at its most recent review.
According to the review report, “the ‘Recommended’ rating indicates that Lonsec has strong conviction the financial product can generate risk adjusted returns in line with relevant objectives. The financial product is considered an appropriate entry point to this asset class or strategy.”
Don Williams, chief investment officer at Platypus Asset Management, said the two funds have very distinct investment styles. However, both have an important role to play in meeting the needs of Australian equity market investors looking for returns generated by a well-structured and disciplined investment approach.
“The Platypus Australian Equities Fund is a high conviction growth fund with a small cap bias, focusing on companies with strong earnings profiles. It aims to deliver strong returns over the medium to long-term, regardless of the performance of the broader Australian sharemarket.
“The Platypus Systematic Growth Fund is a highly diversified, long only, ‘smart beta’ style fund. It adds value through a top-down portfolio construction process, rather than stock selection, and has a factor tilt towards high quality momentum in a risk controlled manner,” Mr Williams said.
Platypus Australian Equities Fund
In its review of the Platypus Australian Equities Fund, Lonsec said: “The Fund exhibits a well-structured investment approach which utilises a combination of top-down macroeconomic and bottom-up company analysis metrics.”
Lonsec considered Platypus to be a true to label growth manager, with an investment style distinct from its peers.
“Lonsec considers the Manager’s investment process to be logical and consistent with its investment philosophy. The investment process has been applied consistently since the inception of the Fund.
“The investment objective of the Fund is to outperform the S&P/ASX 300 Accumulation Index by 4.0 per cent a year (before fees) over rolling three year periods. Pleasingly, this has been achieved over the three-year period assessed to October 2015.
“Over the three years to October 2015 the Fund returned 14.31 per cent a year*, outperforming both the Lonsec Sector Benchmark (S&P/ASX 300 Accumulation Index) on an after fee basis and the median manager in the Lonsec Growth Peer Group by 4.69 per cent a year and 2.26 per cent a year respectively.”
Platypus Systematic Growth Fund
Lonsec described the Platypus Systematic Growth Fund as a “well-conceived quantitative momentum based strategy built entirely from Australian based research”.
Lonsec said it considers the Fund to be an attractive offering for investors seeking a diversified, low cost and benchmark unaware Australian equity product that is biased towards momentum and quality.
“The Fund is most akin to a ‘smart beta’ style product in that it offers a low cost access point to the market, and adds value through portfolio construction rather than stock selection. However, unlike the typical ‘smart beta’ strategy, Platypus Asset Management has the flexibility to take a zero weight in its least preferred stocks and will typically trade more frequently.
“The investment objective of the Fund is to outperform the S&P/ASX 300 Accumulation Index by 1.0 per cent a year (after fees) over an investment cycle with lower volatility.
“Over the three years to October 2015, the Fund has outperformed its outperformance objective. Over this period, the Fund returned 12.98 per cent a year*, outperforming the benchmark by 3.36 per cent a year (after fees).”
Further, Lonsec noted the Fund has more consistently outperformed the benchmark in ‘down’ markets as opposed to ‘up’ markets, over all time periods assessed to September 2015.
Australian Unity Funds Management Limited is the responsible entity of the Funds.