Prime Value Asset Management has been named winner of the Australian Equities – Small Cap Award by highly respected ratings and research house, Zenith, as part of the Zenith Fund Awards 2022.
The Zenith Fund Awards recognise excellence in funds management with an emphasis on long-term factors including performance.
Outperforming consistently over the long-term including tough market conditions has been key to receiving the Zenith Award. It’s the latest of several recent independent endorsements for Prime Value’s small cap strategies, which include the Prime Value Emerging Opportunities Fund.
Portfolio Managers of the Prime Value Emerging Opportunities Fund, Richard Ivers and Mike Younger, said market volatility had created plenty of buying opportunities throughout the last year. “As investors we like to take the opportunity to look through current market conditions and find good quality companies which are now more attractively priced.
“We’re always looking to invest and to build on the quality in our portfolio. Small caps tend to experience the strongest rebounds when markets do eventually turn positive, and are often the first movers in a recovery”, Mr Ivers said.
He was quoted in the Australian Financial Review recently on the Fund’s approach during market volatility, in an article by Chanticleer columnist James Thomson:
“We’re trying to balance a pretty conservative portfolio with not going completely all in on defensiveness.”
The key remains those company meetings and continuing to look at stocks over and over again, so that when conditions change – inflation rises, or COVID-19 hits, or profits weaken – the fund is ready to buy.
Ivers’ advice in volatile markets is simple: “Just look past the short-term noise and focus on the fundamentals of the stocks you own and where they’ll be in a few years’ time.
“And don’t worry too much about the movements day-to-day. It’ll drive you crazy.”
Australian Financial Review, 15 September 2022
Along with the Zenith Fund Award, the Prime Value Emerging Opportunities Fund was recently ranked first in Mercer’s Australian Small Companies (ex-ASX100) survey for annualised performance over three years to FY2022, a period including the initial COVID sell-off, the subsequent recovery, and the current inflationary environment. The Fund was the only small caps fund in the top quartile performers for each of the last three financial years in the Mercer survey.
The Fund was also ranked a Star Manager this year by Financial Newswire in association with SQM Research.
Mike Younger, Portfolio Manager, said the Prime Value Emerging Opportunities Fund has an historical track record of outperforming 83% of months when the index has fallen. “Protecting capital comes back to stock selection. Picking resilient companies with strong cash flow, recurring revenues and low debt levels drives performance in good times but also insulates somewhat during bad times.
“To understand how powerful this can be, investors need to ponder the mathematics around market falls.
“If a stock loses 50% it then needs to gain 100% in performance just to get back to where it was.
“By contrast, if a stock loses 25%, it needs 33% in performance to get back to square one.
“These fundamentals in stock selection not only minimise the damage done from falling markets, they result in a higher base from which to enjoy the next upswing”, Mr Younger said.
To invest in the Prime Value Emerging Opportunities Fund please contact our Client Services Team at info@primevalue.com.au and 61 3 9098 8088