Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
New management for Switzer Dividend Growth Fund
Contango Asset Management, the owner of Switzer Asset Management continued on their transition to become a focused marketing and distribution platform as opposed to product manufacturer this week. CEO Marty Switzer announced that the group had replaced its wholly owned subsidiary as the fund manager of the popular Switzer Dividend Growth Fund (ASX: SWTZ).
Contango have appointed fast growing and strong performing Australian equities specialist Blackmore Capital, headed by CIO Marcus Bogdan, to take over the reins of the c$79 million strategy. The news follows last year’s appointment of WCM Global as manager of the Contango Income Generator listed strategy (ASX: CIE).
Announcing the deal, they noted that ‘Blackmore Capital is an ideal partner for Contango, consistent with the Company’s strategy of selecting best of breed managers to launch new products that capture retail interest.’
The appointment is the latest in a process of simplifications flagged in 2017 for the group that is seeking to focus on what they do best, ‘offering high quality fund managers access to the self-directed and Independent Financial Adviser (IFA) channels of the $2.9 billion Australian superannuation industry’.
According to the release, SWTZ has delivered on its objective of providing investors with reliable, tax-effective income, delivering a yield of 4.3% over the last 12 months, but struggled in delivering capital growth. This is evidenced by the benchmark underperformance over 12 months, three years and since inception in 2017, with the fund delivering 4.92% compared to 8.11% for the ASX 200.
On the other hand, Blackmore Capital’s Australian Equities Income portfolio, which SWTZ is likely to resemble once management control passes, has returned 8.7% since inception in 2014, outperforming the same benchmark by 1.2%. Blackmore has been growing in popularity with financial advisers with its managed account options offering greater transparency into the underlying holdings.
As is typically the case with income focused strategies, the top five holdings in both funds currently included Westpac, CBA, BHP and Macquarie Bank. Exchange listed products are likely to remain a key focus for market participants and active investors, particularly where underperformance, real or perceived, is present. The recent discussion around the NTA discount on the VGI Partners LIC is a case in point.
