Investor Insights

When you invest in a managed fund, your money (together with all other investors’ monies) is gathered in the one place and invested in assets.  Managed funds provide private investors with access to markets and strategies that rely on economies of scale.   For the funds on this website, Montgomery is the investment manager.

In December 2017, Montgomery launched the Montgomery Global Equities Fund (Managed Fund) (ASX: MOGL).   The Fund is an Australian registered managed investment scheme and unit trust, where each investor’s money is pooled with other investors’ funds. Each Unit represents an equal share in the net assets of the Fund. What is an active Exchange Traded Managed Fund?

At Montgomery, we have a large number of self-funded retirees invested across our suite of investment strategies. Like many others in our readership, they too are nervous about the proposed changes – should the ALP be elected – surrounding the treatment of franking credit cash refunds for those in retirement.

Over the past few weeks we have had the pleasure of meeting with clients and friends of the firm around Australia and New Zealand. We are fortunate to have such sophisticated advisers and investors as clients. It makes our discussions detailed and insightful. One subject of interest recently was the performance drivers of, and expectations for, long/short funds.

We are often asked to explain how we manage the cash weighting, and the most recent market pullback at the end of 2018 provides a useful example to illustrate our approach to managing cash. Most readers will be familiar with the investment philosophy that drives The Montgomery Fund.

In recent weeks we have been asked about thematic investing. We never just buy a theme. But we do love investing with strong thematic tailwinds at our backs. What is important for us, however, is that the theme we are buying is under-appreciated by stock prices.

Research shows that investing in the stock market over a long-term will produce higher returns than any other asset class. Although investors have to be able to withstand the volatility and some expertise is required. Where should one gain this expertise? There is more data collected in the asset management industry than just about any other.

A component of generating investment outperformance, known as alpha in industry parlance, is to uncover insights that the market has overlooked. As Peter Lynch famously said of investing: “The person that turns over the most rocks wins the game.

Conventional wisdom typically holds that actively trading positions in your portfolio destroys value. Whether it’s Warren Buffett recommending a “buy-and-hold” strategy, or your advisor recommending against active-trading to minimise brokerage and taxes, there are plenty of experts out there who contend that active trading is inadvisable.

This article provides investors with an explanation on how total return figures are calculated for the Montgomery Global Fund. Second, we answer the question, “How do Trusts calculate distributable income? ” Exclusive Content This is exclusive content to subscribers on rogermontgomery. com. View the full article via your subscription or sign up for access. Continue to RogerMontgomery. com