We Fools sometimes like to check out some of the best fund managers on the ASX for some investing inspiration. It's also a good (and shameless) chance to have a peek at what some successful investors have their eyes on. So today we're looking at Mirrabooka Investments Ltd (ASX: MIR), how its fundies have performed in FY2020 and what they are buying going into FY21.
Who is Mirrabooka?
Mirrabooka Investments is a Listed Investment Company (LIC), which is an ASX-listed investment vehicle that allows investors to invest in the fund just as they would an individual company through buying (or selling) shares.
This particular fund primarily invests in the small and mid-cap space on the ASX, eschewing large-cap shares like the big ASX banks or Woolworths Group Ltd (ASX: WOW).
Over FY2020, Mirrabooka reported that it has returned 7.1% over the 12 months to 30 June 2020 (which includes the benefits of franking credits). That's a 9% outperformance against Mirrabooka's benchmark indices. Over the past 10 years (which is a much better metric to look at in my view), the fund has delivered an average of 13.3% per annum (again including franking) against the benchmark's 8.3%.
This outperformance tells me that Mirrabooka's investing picks are at least worth listening to.
What has this ASX LIC been investing in?
Mirrabooka reports that the shares that contributed to the funds' outperformance last financial year include Macquarie Telecom Group Ltd (ASX: MAQ), Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), Breville Group Ltd (ASX: BRG) and Nextdc Ltd (ASX: NXT).
The fund managers did note that the company has "significantly reduced the number of holdings in its portfolio in recent years", due to a perceived disconnect between risk and reward in many ASX companies' pricing as a result of low interest rates and fiscal stimulus.
Over the course of FY20, the company did offload a number of positions, including that in TPG Telecom Ltd (ASX: TPG), Computershare Limited (ASX: CPU), and Dulux Group (which was acquired by Japan's Nippon Paint last year).
In their places, new acquisitions include Oil Search Limited (ASX: OSH), Cleanaway Waste Management Ltd (ASX: CWY), InvoCare Limited (ASX: IVC), and Auckland International Airport Limited (ASX: AIA).
As of 30 June, the company's cash position as a percentage of the total portfolio is sitting at 5.2%.
Foolish takeaway
In my view, Mirrabooka is a great fund manager, and I think it has an admirable investing style and methodology. It's always nice (in my view anyway) to see fund managers pull back from raging bull markets rather than betting the house on jumping on the bandwagon, which is what Mirrabooka's management has told us they are avoiding.
