Who runs the fund? Clime Asset Management, a value investor. John Abernethy is the chief investment officer and founded Clime Investment Management in 1996 after 10 years as head of equities at NRMA Investments.
The basics: It looks for good-value Australian stocks to deliver consistent capital growth and growing income over three to five years.
The process: This is underpinned by three key beliefs: preservation of capital; sustainable return on equity determines value; and the value of a company will be reflected by its share price in the medium term (in other words, be patient and value will be delivered). It holds a concentrated portfolio of about 20 stocks. An easily understood business model, well-funded balance sheet, absence of heavy debt and high-dividend yields are also attractive.
The bottom line: The fund looks truly exceptional lately. In the three years to October 31, it is up 17.74 per cent a year, according to Morningstar, more than 3.5 percentage points higher than its nearest value-style rival. It’s also the top performer in its field over the past 12 months (up 4.76 per cent) and five years (6.63 per cent).
Fees: For retail, it’s 1.03%, and 0.87% for wholesale, plus a performance fee of 15.38% of outperformance above a benchmark of 12 per cent per year. That is a much higher benchmark than many fund managers apply.
Verdict: Consistently excellent results for the past five years just can’t be argued with.