Claremont Global caters to retail investors with new exchange traded managed funds

By Newsdesk

February 12 2024
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Sydney-based asset management firm Claremont Global has announced the launch of its exchange traded managed funds (ETMFs) on the Australian Securities Exchange (ASX), providing investors more access to its global equity portfolios.

Claremont Global caters to retail investors with new exchange traded managed funds

The funds available include the unhedged Claremont Global Fund (ASX:CGUN) and the hedged Claremont Global Fund (ASX:CGHE), which aim to cater to the increasing demand from retail investors for high conviction global equity managers.

Head of Claremont Global & co-Portfolio Manager, Bob Desmond, underscored the importance of the firm's investment philosophy and its performance. "High conviction certainly defines the investment philosophy of our $1.4 billion Fund," Desmond said. "We own 10 to 15 of the highest-quality global businesses, targeting an 8 to 12 per cent absolute return a year, measured over five-to-seven years, while remaining focussed on long-term capital preservation." He highlighted the Fund's strong track record, noting, "It is an approach that has seen the (unhedged) fund deliver an average return of 17.0 per cent a year (net of fees and assumed reinvestment of distributions) over the last five years, generating a 4.6 per cent return above its benchmark per annum across the same period."

Desmond spoke about the resilience of the businesses in the fund, which have withstood various market conditions. He stated, "Our businesses have been tested over time, so when the inevitable adversity of recessions and bear markets appear, we are confident that the decline in their earnings (and value) is very likely to be temporary, thereby allowing our clients to stay the course."

Charlie Wapshott, Head of Distribution at Claremont Global, commented on the trends in the ETF market and advisors' inclinations towards such investment vehicles. "Since 2020, funds under management (FUM) in ETFs have nearly doubled while unit trust FUM has fallen by about 20 per cent over the same period," Wapshott said. He also provided insights regarding self-managed super funds (SMSFs) and individual investors in Australia, pointing out that "45 per cent of all SMSFs in Australia now holding ETFs and over 2 million people in the country investing in them," with expectations that this interest will continue to grow.

Claremont Global's robust research process aims to distill a pool of over 70,000 global companies down to approximately 150 candidates, before further refining this to a shortlist and finally selecting the portfolio constituents. Desmond discussed the firm's investment criteria, noting, "We don’t participate in banks, pharmaceuticals, utilities, resources – basically anything that is leveraged, commoditised, overly complex or regulated." Instead, the focus is on sectors where they can identify businesses with strong market positions and financial fundamentals.

The firm's long-term performance has been strong, with Desmond remarking, "Over the Fund’s 10-year investment journey, it has outperformed its benchmark – the MSCI AC World Accum Index ex-Aust – by 3.1 per cent a year and has never underperformed it." This consistent outperformance could be a reassuring factor for potential ETF investors.

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