Prime Value Emerging Opportunities Fund tops Mercer table as defensive focus rewarded

‘Boring is beautiful’ for the Prime Value Emerging Opportunities Fund, which has topped Mercer’s Australian Small Companies (ex-ASX100) survey for the year to 30 June 2020, in its first year on the survey.

Richard Ivers, portfolio manager of the Prime Value Emerging Opportunities Fund, part of boutique investment house Prime Value Asset Management, says the fund has a unique approach built around capital preservation. “We passionately believe investments need to preserve capital first particularly in the current market conditions.

“We look for high quality, best-of-breed companies which have pleasingly shown more resilience during the coronavirus recession.”

The Prime Value Emerging Opportunities Fund delivered 20.0% (before fees*) to top the Mercer Australian Small Companies (ex-ASX100) survey, for the year to 30 June 2020 (source: MercerInsight®)

The Fund’s 18.1% return (after fees*) was 23.8% above the ASX Small Ordinaries Accumulation Index return of -5.7% for the year.

This was the Prime Value Emerging Opportunities Fund’s first year on the Mercer survey following establishment in 2015, reflecting the Fund’s change from family office vehicle to a broader retail investor base. “The Fund’s original investors were the family office and its existing clients but this market-leading fund is now available to all retail investors. However capacity is limited to ensure strong returns can be sustained.”

Mr Ivers said there are still good buying opportunities despite the recent rebound in Australian equities. “These times are particularly good for active management. Periods of volatility create fantastic opportunities for stock pickers who can sort the wheat from the chaff.”

The manager held its nerve during February’s ‘fastest bear market in history’, investing through the downturn, and bought stocks which may be considered ‘boring’ but had a high probability of strong returns. Mr Ivers cited defensive stocks Collins Foods and Bapcor as two examples.

“Many investors seek large returns over more modest ones without properly accounting for risk. By focusing on consistent, lower risk investments we have delivered an 18.1% return (after fees*) in a down market”. The current volatile conditions are ideal for the Fund’s investment style.

The Prime Value Emerging Opportunities Fund is currently open to retail investors.

Boutique manager Prime Value Asset Management was founded in 1998 and is part of an investment group including Shakespeare Property Group, managing more than $1.5 billion across equities, income securities, direct property and alternative investments.