Prime Value Asset Management’s Australian equities funds have posted strong long-term performance, showing consistency and underlining the benefits of actively managed Australian equities portfolios.
Consistent outperformance across market conditions
ST Wong, Chief Investment Officer of Prime Value Asset Management, emphasises Prime Value’s aims to delivering outperformance across different market conditions – not just during favourable market periods.
“Our funds are genuinely actively managed, leveraging the extensive knowledge base within the organisation. We are able to maintain flexibility in our approach, allowing us to capitalise on opportunities effectively. Our experienced investment team also works well together, sharing insights to benefit all our funds.”
Mr Wong also acknowledges that the Prime Value equities team place an emphasis on risk-adjusted returns – that is, being able to deliver performance at a lower level of risk than the broader market.
“There is no point taking outsized risks to outperform the market. In fact, managing downside risk is the foundation for strong future returns”, Mr Wong said.
Prime Value equities funds: A track record of long-term strength
The Prime Value Emerging Opportunities Fund, which is managed by Prime Value’s award-winning small cap team, has returned an impressive 11.8% per annum net of fees for the year to 31 January 2025, and 11.5% per annum net of fees since inception in 2015. Notably, it has outperformed the Small Ordinaries Accumulation Index for each of the past seven calendar years.
Richard Ivers and Mike Younger, Portfolio Managers for the Prime Value Emerging Opportunities Fund, highlighted the opportunities available in the smaller end of the market for active managers to be involved.
“It’s an exciting place to be, which rewards managers who are prepared to conduct in-depth research and develop a deep understanding of these companies”, Mr Ivers said.
Mr Younger added: “Smaller companies offer greater diversification and a broader investment universe. As they are not as well covered by the major broking houses, there is an opportunity for active managers like Prime Value to generate significant value. In addition, aside from selecting the right stocks, we also have the opportunity to differentiate via portfolio construction.”
With markets undergoing a period of change, and growing expectations that Australian interest rates will be cut, Mr Younger remains optimistic about the opportunities within small caps given the sector’s broad potential.
Image: Prime Value Australian Equities Investment Team Featuring ST Wong, Mike Younger, Richard Ivers, Leanne Pan & Benjamin Mellody
The Prime Value Opportunities Fund invests across the ASX and has returned 14.3% per annum net of fees for the year to 31 January 2025, and 10.1% per annum net of fees since inception in 2012.
Mr Wong, Portfolio Manager for the Prime Value Opportunities Fund, noted that consistency is playing to your strengths. “Our strength lies in leveraging real insights to identify high-quality companies in a market currently characterised by significant divergence in returns.
“We prefer to focus on company-specific fundamentals and avoid big macro forecasts. Across different market cycles we have seen that good companies, run by strong management, which are growing their business and have a good balance sheet, are the ones which consistently perform.
“There are currently several good companies which have invested heavily in their businesses, and look set to capture increased market share and go to the next level”, Mr Wong added.
The income-focussed Prime Value Equity Income (Imputation) Fund (PVEII) aims to provide regular income and capital growth for tax savvy investors.
The Fund returned a 13.6% total return per annum net of fees for the year to 31 January 2025 – increasing to 15.2% with franking credits. The Fund has delivered 10.0% per annum total return since inception in 2001, which increases to an impressive 12.1% per annum when accounting for franking credits.
Leanne Pan, Portfolio Manager for the PVEII Fund, emphasised the benefits in taking a total return approach when investing for income: “As investors we need to understand the drivers of the business, its financial metrics, cashflow, and growth potential to ascertain what underpins the dividend and how sustainable it is.
“Sustainable dividends are critical and we are wary of potential dividend traps from cyclical stocks, smaller companies, and resources companies. These companies may pay a good dividend one year but then struggle to deliver after that.”
Ms Pan added that: “As commodity prices remain unpredictable, banks will be the major contributor to the portfolio yield.”
One of Australia’s longest running high conviction funds, the Prime Value Growth Fund, has returned a total 15.3% per annum net of fees for the year to 31 January 2025, and 10.5% per annum total return net of fees since inception in April 1998.
Prime Value Asset Management encourages all investors to consider long-term track record and risk tolerance when assessing which funds might be right for them.
To invest in any of the above Prime Value Equities Funds please contact our Client Services Team at info@primevalue.com.au and 61 3 9098 8088