First State Investments has created a Dublin-based fund that invests in Australian equities.
As the name suggests, the Australian growth fund aims for growth by investing mainly in big Australian companies. It can also invest in companies elsewhere that have their main business activities in Australia.
The portfolio is concentrated, typically holding 25-50 companies with healthy balance sheets, strong earnings and good prospects to outperform their peers over the medium to long term.
The company says solid economic conditions in Australia are driving demand for an Australian equities based product in other markets around the world, including the UK. The firm believes that it is well placed to provide this because its Sydney-based Australian equities growth team has been running portfolios in this area since 1989.
The lead manager for the fund is Naz Ressas, a portfolio manager in First State’s Australian equities growth team. He joined First State in January 2006 from UBS Global Asset Management where he was a senior Analyst for three years. Ressas has more than 11 years’ experience as an analyst, having previously worked for Alliance Capital Management and Tower Asset Management in Australia.
The team believes that company profits are dictated by industry profits and looks for companies that are with the potential to outperform other firms in the same industry.
Australia is rich in natural resources so a couple of Australia focused funds available to UK investors – Thesis Australian natural resources and the Oceanic CF Australian natural resources – focus on the sector. Australia’s mining stocks have performed well recently but a broader fund can provide diversity, although the Australian building and retail sectors are facing difficulties.
As a broader Australian fund, Baring Asset Management’s Dublin-based Australia fund provides a more direct comparison, but First State’s Australian experience makes it a serious competitor.