18 October 2017
The Bennelong Twenty20 Australian Equities Fund has been named the winner of the Lonsec Innovation Award for 2017.
The Fund, managed by Bennelong Australian Equity Partners (BAEP), combines passive investment in top 20 stocks, similar to an index fund, and active investment in ex-20 stocks, using the same investment process employed in the award-winning Bennelong ex-20 Australian Equities Fund.
When it comes to investing in Australian equities, there’s a lot of debate about which approach is better—active or passive, explains portfolio manager Julian Beaumont.
“Actively-managed funds have the potential to perform better than the market, but they are typically more expensive. Passively-managed funds are low cost, but they stick to the index with no chance of outperformance.
“What doesn’t get talked about much, however, is how these strategies can work together so investors get the best of both worlds.
“Recognising that it’s more difficult to outperform the top 20 mega-cap stocks on the ASX, the portfolio invests in the ASX 20 Index using a low-cost passive approach.
“There are a lot more interesting ideas outside the top 20. Ex-20 stocks tend not to be as well known, researched or picked over. They can offer more exciting investment prospects, although the group comes with more risk. It’s here that an active strategy can add a lot of value in discerning the good from the bad.”
Craig Bingham, CEO of BAEP’s partner Bennelong Funds Management, says the Lonsec award recognises the innovative approach taken by the Twenty20 Fund portfolio management team.
“The award is a great endorsement of Bennelong Australian Equity Partners’ strategy for the Twenty20 Fund. The team is uniquely positioned to offer the product, with proven success in actively managing ex-20 stocks and the capability to properly undertake the passive side. This is recognition of the team's strong ex-20 pedigree and a desire to think innovatively about how they can add value for their clients.”
Disclaimer: Lonsec does not issue, sell, guarantee or underwrite this financial product. Go to www.lonsecresearch.com.au for details of its ratings criteria.