From time to time, we Fools like to look at some of the more successful fund managers on the ASX, and have a cheeky look at where they are finding good places to put their money. So today, we're checking out Hyperion Asset Management – a growth-focused fund manager that has delivered top returns for its investors over the past few years.
In fact, according to reporting in the Australian Financial Review (AFR), Hyperion's Global Growth Companies Fund topped the ASX's managed funds in terms of 5-year performance, with an average annual return of 18.3% for the 5 years to 30 April. With numbers like those, I think this fund manager is well worth listening to.
So what exactly is Hyperion investing in right now?
A top ASX fundie's share picks
According to the AFR, Hyperion has 2 managed funds: its global growth fund, and the Australian Growth Companies Fund.
For the global growth fund, the top holdings are as follows:
- Amazon.com Inc.
- Microsoft Corporation
- Tesla Inc.
- Alphabet Inc.
- PayPal Holdings
There are some of the most well-known global growth names right there, to be sure. It's clear Hyperion is focusing on the big tech names for the lion's share of its portfolio. And for good reason too! All 5 of these companies are pushing on record-high share prices right now. Tesla, in particular, has appreciated close to 200% in the past 6 months alone.
According to Hyperion fund managers Jason Orthman and Mark Arnold, the company isn't worried about stretched valuations either:
We think they're better value now than they were in January… They're highly innovative. There's a lot of optionality embedded in those businesses, and a lot of smart people are incentivised to create better features for existing products and expand product ranges. We are pretty comfortable that the value is there and the returns should be there over the next five to 10 years.
But let's also look at Hyperion's locally focused Australian growth fund as well. Here are this fund's top holdings, according to the AFR:
- CSL Limited (ASX: CSL)
- Xero Limited (ASX: XRO)
- Domino's Pizza Enterprises Ltd (ASX: DMP)
- Macquarie Group Ltd (ASX: MQG)
- Afterpay Ltd (ASX: APT)
That's a far more balanced portfolio than the global growth fund. We have healthcare darling CSL, tech-savvy Xero, payments heavyweight Afterpay and fast food king Dominos. Even a bank (Macquarie) is in the list.
Mr Arnold also stated that he sees a growing divide about where he wants Hyperion's funds to be, and where he doesn't:
It really reinforces our view that we are permanently stuck in a no-growth or low-growth world. We think that's going to be a big drag on earnings per share growth for the major indices around the world for the next 10 years… You've really got to back the winners. If you're on the other side of the divide, you're really going to struggle.
Foolish takeaway
I think Hyperion's insights are very much worth taking on board, especially considering its enviable track record. I especially like the fact that the fund is taking a holistic view of the markets and where they see the future taking them. It's an approach I think is worth implementing in our own growth portfolios as we navigate these uncertain times.
