About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Thursday, September 29th, 9:06PM
rss
Investment News

Portfolio Talk: Carmel Fisher

Carmel Fisher describes how she successfully fishes in her own pond.

Wednesday, August 15th 2001, 7:28AM

Portfolio Talk: Carmel Fisher
Fisher Funds NZ Equity Trust

 

Fisher Funds Growth Fund is an actively managed New Zealand equities fund with a bias towards small, growing companies.
It does not invest in companies in the NZSE10 Index, though it's able to keep holdings of stocks that become top 10 shares.
Launched in August 1998, it is managed with a "growth" style - that is, companies are selected on the basis of historical and potential earnings growth.
It employs a "buy and hold strategy" and maintains a concentrated portfolio, with the fund currently holding just 10 stocks.

Fund size: $94 million

Entry fee: 4% max.
Fully rebatable
1% to direct investors

Min investment: $2000

Fund type: NZ unit trust

Benchmark: NZSE40 Gross

Net performance
June 30, 2001:
3 months 3.98%;
12 months 18.55%
Two years 42.01%
Since inception 86.19%.

MER: 1.0438

as at 31/3/01

TOP 10 Stocks: Baycorp, Frucor, GPG, Mainfreight, Michael Hill, Nuplex, Renaissance, Sky City, The Warehouse and Waste Management.

Ratings: Fund is not rated as it has less than three years old.

Carmel Fisher cut her investment teeth in the 1980’s, experiencing the bull market and the 1987 sharemarket crash.

The experience of managing client portfolios through extremes of market cycles has stayed with her, instilling a healthy respect the importance of fundamental investment analysis.

After four years as a stockbroker analyst she joined Prudential Assurance, where in 1991 she launched one of the first funds to specialise in small Kiwi companies. Helped by a period of stronger economic growth, the Prudential Emerging Companies Trust achieved a cumulative 110% return in the two and a half years Fisher ran it.

After a three-year stint running Sovereign Assurance’s funds management she left in 1997 to form Fisher Funds Management.

Why do you invest only in New Zealand shares?
We believe we have a competitive advantage in investing in our own backyard. We can do proper industry analysis and due diligence on companies. We understand the political and economic environment, and can react quickly to news. International fund managers have a competitive advantage over New Zealand fund managers when it comes to investing overseas. For that reason we prefer to fish in our own pond.

Why do you specialise in smaller capitalised stocks?
My background. I began work as a small company analyst for a broking firm which has given me a preference for, and knowledge of, smaller companies. They’re often easier to research as they tend to have one, core business and are often overlooked by large and international investors.

Their share prices are more likely to reflect the underlying business fundamentals than those of larger stocks, whose prices are influenced by international commodity trends and investment flows.

What is the fund’s benchmark and how has it performed against that benchmark?
Our stated benchmark is the NZSE40 Gross Index, which we have consistently outperformed - by 62% since inception. The current portfolio is more closely aligned to the NZSE40 Midcap Index, which we have also outperformed. (The index was up 13.4% in the 12 months to June 2001, versus the funds rise of 18.5%.)

Which stocks are in the fund just now and which are you most upbeat about?
Currently we hold 10 stocks. Our top tier stocks are Baycorp, Sky City, Warehouse and Waste Management.

These have been selected because they meet our earnings criteria. This criteria is that a stock must have had consistent earnings growth over at least three years, its forecast earnings growth must be in excess of the market average, its P/E to growth ratio must be one or less at the time of the initial purchase, and it must have quality management and a sustainable competitive advantage.

Our second tier stocks are GPG, Michael Hill, Nuplex and Frucor. The weightings on these stocks are lower than on our top tier stocks because they do not achieve as high a rating on one of our criteria - either their short-term forecast earnings are at or below the market average, or we have some concerns about short-term earnings momentum.

The third tier stocks are Mainfreight and Renaissance. These stocks comprise relatively low weightings within the portfolio because their ranking is somewhat lower than the other portfolio stocks. In Mainfreight’s case, we are holding back until we are more convinced of the potential of their Australian expansion and with Renaissance, we have put a toe in the water and are building our confidence in the company and the management before increasing our holding.

What stocks have you sold out of and why?
Since inception the fund has sold out of Metlifecare (because of management changes and erratic earnings), Hallenstein Glassons (departure of a managing director in whom we had confidence), Tourism Holdings (because of erratic earnings, loss of confidence in the management), Montana (we sold in two situations - when we felt that the company was about to be taken over and wanted to maximise our exit price, and because the share price at the height of the corporate activity reflected far more than the earnings potential we believed existed for the company).

How would you describe your portfolio management style?
We are growth-oriented, buy and hold, stock-pickers. Our style is a combination of Warren Buffett from Berkshire Hathaway and Peter Lynch of Fidelity Magellan, with a New Zealand overlay.

How do you go about researching companies for the fund?
We use fundamental company analysis – we meet management, understand their business strategy and competitive positioning, and establish the company’s ability to grow earnings faster than average. We consider financials, establish a realistic entry price then buy and continue to monitor. We sell only if the fundamental reason for investing changes - price movement is not a trigger for us to buy or sell. We invest like a company owner, with the share price being our final reference point.

How hard is it to find undiscovered value stocks in this market?
We don’t necessarily look for undiscovered value stocks as we’re a growth investor. But it is difficult to find stocks that meet our investment criteria.

Often companies look interesting, but don’t have a consistent earnings history or management track record. Therefore we have to wait until a track record emerges. There are plenty of "undiscovered stocks" in the market, but often there is a reason for it.

We don’t mind if we end up discovering them after other investors if that means that by the time we invest, the company has a consistent record and some predictability about it.

« Bank economists all over the placeKing builds an empire »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend

Good Returns Investment Centre is bought to you by:

Subscribe Now

Keep up to date with the latest investment news
Subscribe to our newsletter today

Edison Investment Research
  • Acorn Income Fund
    19 September 2016
    Finding opportunities in small-cap dividend payers
    Acorn Income Fund (AIF) has produced solid long-term total returns (+138% share price and +135% NAV over five years) from its portfolio of UK smaller companies...
  • Canadian General Investments
    19 September 2016
    Broad exposure to Canadian equities
    Canadian General Investments (CGI) is a closed-end investment fund listed on both the TSX and LSE; it is registered as a Canadian investment corporation....
  • Tetragon Financial Group
    12 September 2016
    Global diversified alternative assets portfolio
    Tetragon Financial Group (TFG) is a specialist closed-ended investment company aiming to provide stable returns across economic and various asset class...
  • Ocean Wilsons Holdings
    9 September 2016
    Brazil now a more positive influence
    After a period in which its controlling investment in Wilson Sons (WSON), a seasoned Brazilian maritime services business, was a source of earnings and...
  • Miton Global Opportunities
    7 September 2016
    Seeking real returns with more specialist focus
    Miton Global Opportunities (MIGO) seeks to provide returns in excess of those on cash by exploiting opportunities from pricing inefficiency among under-researched...
  • Martin Currie Global Portfolio Trust
    6 September 2016
    Diversified global exposure with dividend growth
    Martin Currie Global Portfolio Trust (MNP) aims to outperform the total return of the benchmark FTSE World Index by investing in a portfolio of global,...
© 2016 Edison Investment Research.

View more research papers »

Today's Best Bank Rates
Heartland Bank 3.00  
Heartland Bank 3.00  
RaboDirect 3.00  
Based on a $50,000 deposit
More Rates »
Cash PIE Rates

Cash Funds

Institution Rate 33% 39%
ANZ 0.50    -    -
ASB Bank 0.65    -    -
ASB Bank 0.80    -    -
ASB Bank 0.85    -    -
ASB Bank 0.90    0.18    -
ASB Bank 0.95    -    -
Heartland Bank 2.60    -    -
Nelson Building Society -    -    -
RaboDirect 1.50    1.55    1.62
SBS Bank 1.80    2.59    2.70
Westpac 0.55    0.57    0.59
Westpac 0.05    0.10    0.11
Westpac 2.75    2.83    2.96

Term Funds

Institution Rate 33% 39%
ANZ Term Fund - 90 days 2.60    3.01    3.14
ANZ Term fund - 12 months 3.25    3.64    3.80
ANZ Term Fund - 120 days 3.00    3.29    3.45
ANZ Term fund - 6 months 3.15    3.48    3.64
ANZ Term Fund - 150 days 3.25    3.39    3.55
ANZ Term Fund - 9 months 3.25    3.53    3.69
ANZ Term Fund - 18 months 3.45    3.64    3.80
ANZ Term Fund - 2 years 3.35    3.69    3.85
ANZ Term Fund - 5 years 3.60    3.85    4.02
ASB Bank Term Fund - 90 days 2.60    2.97    3.10
ASB Bank Term Fund - 6 months 3.20    3.49    3.65
ASB Bank Term Fund - 12 months 3.20    3.70    3.86
ASB Bank Term Fund - 18 months 3.20    3.75    3.92
ASB Bank Term Fund - 2 years 3.25    3.81    3.98
ASB Bank Term Fund - 5 years 3.55    3.97    4.14
ASB Bank Term Fund - 9 months 3.10    3.54    3.70
BNZ Term PIE - 120 days 3.00    -    -
BNZ Term PIE - 150 days 3.00    -    -
BNZ Term PIE - 5 years 3.60    -    -
BNZ Term PIE - 2 years 3.35    -    -
BNZ Term PIE - 18 months 3.30    -    -
BNZ Term PIE - 12 months 3.25    -    -
BNZ Term PIE - 9 months 3.55    -    -
BNZ Term PIE - 6 months 3.15    -    -
BNZ Term PIE - 90 days 2.60    -    -
Co-operative Bank PIE Term Fund - 6 months 3.60    -    -
Heartland Bank Term Deposit PIE - 12 months 3.40    -    -
Heartland Bank Term Deposit PIE - 6 months 3.30    -    -
Heartland Bank Term Deposit PIE - 9 months 3.20    -    -
Heartland Bank Term Deposit PIE - 18 months 3.30    -    -
Heartland Bank Term Deposit PIE - 2 years 3.70    -    -
Heartland Bank Term Deposit PIE - 5 years 3.70    -    -
Kiwibank Term Deposit Fund - 150 days 3.00    3.09    3.22
RaboDirect Term Advantage Fund - 12 months 3.40    3.50    3.65
RaboDirect Term Advantage Fund - 6 months 3.50    3.60    3.76
RaboDirect Term Advantage Fund - 90 days 2.85    2.93    3.06
Westpac Term PIE Fund - 150 days 2.80    3.08    3.22
Westpac Term PIE Fund - 120 days 2.70    3.13    3.27
Westpac Term PIE Fund - 18 months 3.20    3.58    3.75
Westpac Term PIE Fund - 12 months 3.20    3.58    3.75
Westpac Term PIE Fund - 6 months 3.00    3.38    3.53
Westpac Term PIE Fund - 9 months 3.10    3.44    3.60
Westpac Term PIE Fund - 90 days 2.50    2.82    2.95
Westpac Term PIE Fund - 2 years 3.25    3.85    4.02
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com