Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Did you own the top performing Aussie funds of 2022?
And there goes the 2022 financial year. It flew by at the blink of an eye. A pandemic, a few supply-chain disruptions, a war in Europe, rising energy prices, climate change and soaring inflation. What more could you ask?
These are just some of the events that impacted global markets throughout the year. 2022 has been highlighted as the year that ‘value’ investors closed the gap on growth after more than a decade, and that may well be the case. But for the top performing Australian equity funds, there was one main theme in common; an overweight to commodities and energy.
| Fund Manager | Fund Name | 1 year* | |
| 1 | Lazard Asset Management | Select Australian Equity | 18.00% |
| 2 | APSEC Atlantic Pacific Australian Equity | Atlantic Pacific Australian Equity | 17.94% |
| 3 | PM Capital | Australian Companies | 10.62% |
| 4 | Alliance Bernstein | Concentrated Australian Equities | 8.71% |
| 5 | Allan Gray | Australia Equity | 6.45% |
| 6 | Maple-Brown Abbott | Australian Equity Trust | 5.79% |
| 7 | Allan Gray Australia | Australia Equity | 5.67% |
| 8 | Merlon Concentrated Australian Share I TR in AU | Concentrated Australian Share | 4.94% |
| 9 | Chester High Conviction TR in AU | High Conviction | 4.84% |
| 10 | Elston Asset Management | Australian Large Companies | 4.76% |
In top place was Lazard Asset Management’s Select Australian Equity Fund which delivered 18.00 percent for the year and with good reason. Dr Philipp Hofflin of Lazard Asset Management has been an avid supporter of the unloved energy sector, taking up positions in the fund when prices were low some 18 months ago.
Primarily, the fund is a highly concentrated portfolio that holds between 12 and 30 of Lazard’s “best ideas,” combined with a value overlay to ensure companies selected are trading below their intrinsic value. But that’s not why Lazard took out the top spot. It all boils down to two high conviction holdings: Whitehaven Coal (ASX:WHC) and Woodside Petroleum (ASX:WPL).
Holdings in Whitehaven have gone up a whopping fivefold, whilst its Woodside Petroleum holdings are not far from doubling. Woodside accounts for almost 10 percent and Whitehaven 6.19 percent of the portfolio. Star stock picking by Dr Hofflin, has definitely paid off.
Here are the funds top 5 stocks:
| Holdings | Lazard (%) | Sector |
| QBE Insurance | 10.24% | Financials |
| Woodside Energy | 9.64% | Energy |
| AMP | 6.67% | Financials |
| Whitehaven Coal | 6.19% | Energy |
| Rio Tinto | 6.03% | Materials |
With the rise in oil and commodity prices as a direct result of sanctions placed on Russia, most of the top stocks in Lazard’s portfolio have outperformed adding to their stellar performance.
The second-best performing fund was the APSEC Atlantic Pacific Equity Fund which returned 17.94 percent. The fund has consistently produced outstanding results by focusing on risk management. This has also helped the fund smooth out volatility during market downturns, so that it can generate strong, stable investment returns. According to Money Management, The APAEF was the top performing Australian equity fund in 2020. This fund was also heavy on the energy side recording a near 7-8 percent sector to energy stocks.
And in third place was PM Capital’s Australian equities fund which returned a healthy 10.62 percent with a clear weighting to Commodities – energy, industrial metals and alternative investment managers. Like Lazard, the portfolios contained Woodside Petroleum (ASX:WPL) together with Stanmore Resources, Beach Energy and Apollo Global Management. All key contributors to performance. Short positions in REA Group and Seek Limited also contributed positively to performance.
| Top 10 stocks | Sector |
| Apollo Global Management | Diversified Financials |
| ANZ | Banks |
| BHP | Materials |
| Coronado Global Resource | Energy |
| Crown | Consumer Services |
| ING Group | Banks |
| NAB | Banks |
| Stanmore Resources | Energy |
| Westpac | Banks |
| Woodside Energy | Energy |
Investors who bought into any of the Australian equities funds listed in the top 10, will have done remarkably well compared to the ASX 200 Accumulation Index which returned only 4.8 percent. And it doesn’t take long before the recurring theme stands out, the question however is for how long it lasts, particularly given the oil sector has already entered a correction at the time of writing.
Funds that outperformed in the Australian equities space were ones that were heavily weighted towards energy and commodity stocks. It wasn’t value stocks that did well, but rather ones exposed to a rally in commodities that shifted from metals to energy resources, such as crude oil, liquefied natural gas (LNG) and coal. Funds were exposed to stocks such as Woodside Petroleum and Whitehaven Coal, which saw strong performances at the year’s end.
