Openness and cash to shape future portfolios

Focus back on fundamentals

By Vishal Teckchandani
Fri 13 Jun 2008

Managers from Fidelity, Schroders, Ausbil Dexia and 452 Capital share views on future portfolio construction.

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Good corporate transparency and strong company balance sheets would be amongst the top priorities when picking stocks in the future, for four prominent fund managers.

The managers, from Fidelity, Schroders, Ausbil Dexia and 452 Capital shared their views at the Morningstar Investment Conference on June 11.

Fidelity portfolio manager Paul Taylor, said he would focus on holding companies that have strong balance sheets and good management.

"The fund is .... bringing the focus back on balance sheets, strength of the balance sheets [and] quality of the management teams," Taylor said.

Schroders head of Australian equities, Martin Conlon, said commodities were becoming a bubble and he would be underweight in them.

"We believe it's an environment where you want to buy good quality businesses," Conlon said.

Ausbil Dexia director of equities, John Grace, said his team would keep a high conviction regime backed by strong fundamental analysis.

"We will be aggressive in our tilts [and] we will be underweight or overweight [on stocks]," Grace said.

452 Capital co-founder and investment director, Peter Morgan, would be underweight in commodities, property and infrastructure.

"There is a skew in the portfolio to a weakening $A and overall the portfolio is getting skewed to industrials with good balance sheets generating good cash flow, that are maintaining a good dividend going forward," Morgan said.

The managers collectively look after around $30 billion of funds.

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