Hyperion Global Growth Companies B seeks to achieve medium to long-term capital growth and income by investing in high calibre companies primarily listed on a recognized global exchange, at the time of investment.
The Global Growth Companies Fund (Managed Fund) returned -5.5% for September, underperforming its benchmark (MSCI World Accumulation Index (AUD)) by 1.5%. Palantir Technologies Inc., Airbnb Inc., and Costco Wholesale Corp. saw the largest share price increases, while Block Inc., Kering SA, and Roku Inc. saw the largest declines over the month.
The global strategy produced mixed returns over the September quarter. The quarter started strong following an encouraging U.S. financial reporting season in July. However, economic uncertainty centering around further interest rate rises in the U.S. dampened returns into September. This shortterm uncertainty and volatility in global bond markets, which we believe is neither fundamental nor entrenched, is a headwind for longer duration assets like those in our global strategy. Short-term volatility often provides a brief opportunity for investors with a long-term mindset.
Hyperion believes the strong underlying fundamental and earnings characteristics of our portfolio holdings will be reflected in market valuations over the long term. As we enter the third-quarter global reporting season in October and November, we are hopeful that underlying results will lead to a rebasing of valuations after the recent rise in bond yields.
Our long-term view remains unchanged that we will revert to a lower growth, lower inflation, and lower interest rate world which is starting to be seen in parts of Asia. A lower growth environment is much more favourable for growth investing. With a strong performance for the year-to-date, we believe the long-term outlook for our portfolio remains attractive, with forecast internal return rates above their long-run averages.
What is Hyperion Global Growth Companies B Hyperion Global Growth Companies B is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Growth Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Hyperion Global Growth Companies B has Assets Under Management of 920.36 M with a management fee of 0.7%, a performance fee of 3.81% and a buy/sell spread fee of 0%.
How has the investment product performed recently? The recent investment performance of the investment product shows that the Hyperion Global Growth Companies B has returned 2.92% in the last month. The previous three years have returned 5.51% annualised and 17.67% each year since inception, which is when the Hyperion Global Growth Companies B first started.
How is risk measured in this investment product? There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Hyperion Global Growth Companies B first started, the Sharpe ratio is NA with an annualised volatility of 17.67%. The maximum drawdown of the investment product in the last 12 months is -8.68% and -44.83% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product? Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Hyperion Global Growth Companies B has a 12-month excess return when compared to the Foreign Equity - Large Growth Index of 8.79% and 5.04% since inception.
Does the investment product produce Alpha over its Peers? Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Hyperion Global Growth Companies B has produced Alpha over the Foreign Equity - Large Growth Index of NA% in the last 12 months and NA% since inception.
What are similar investment products? For a full list of investment products in the Foreign Equity - Large Growth Index category, you can click here for the Peer Investment Report.
What level of diversification will Hyperion Global Growth Companies B provide? Hyperion Global Growth Companies B has a correlation coefficient of 0.86 and a beta of 1.5 when compared to the Foreign Equity - Large Growth Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers? For a full quantitative report on Hyperion Global Growth Companies B and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Hyperion Global Growth Companies B with the Developed -World Index? For a full quantitative report on Hyperion Global Growth Companies B compared to the Developed -World Index, you can click here.
Can I sort and compare the Hyperion Global Growth Companies B to do my own analysis? To sort and compare the Hyperion Global Growth Companies B financial metrics, please refer to the table above.
Has the Hyperion Global Growth Companies B been independently verified by SMSF Mate? This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
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Performance Commentary - August 31, 2023 The Hyperion Global Growth Companies Fund (Managed Fund)* returned 0.7% for August, underperforming its benchmark (MSCI World Accumulation Index (AUD)) by 0.9%. Intuit Inc., Mastercard Incorporated, and Visa Inc. saw the largest positive share price movements, while Block Inc., Palantir Technologies Inc., and Roku Inc. saw the largest share price declines over the month.
The month of August was quieter as the market digested company results and further macroeconomic news. Hyperion was broadly pleased with our portfolio companies’ quarterly results, which were in line with our long-term forecasts.
Economic data continues to show that the economic jolt from the pandemic is subsiding and stability in bond yields is being maintained. Stability is important as it allows confidence to come back into markets. Short-term valuations from higher bond yields look to have rebased and we are now importantly seeing our companies’ underlying fundamentals and earnings be the basis for market valuations. Hyperion still believes that we will revert to a lower growth, lower inflation, and lower interest rate world and in fact we are starting to see that in some parts of Europe and Asia. A lower growth environment is much more favourable for growth investing.
Although we have seen strong performance for the year to date, we believe the long-term return outlook for our portfolio remains attractive, with forecast internal rates of return above their long-run averages.
Performance Commentary - July 31, 2023 The Hyperion Global Growth Companies Fund (Managed Fund)* returned 3.3% for July, outperforming its benchmark (MSCI World Accumulation Index (AUD)) by 1.1%. Roku, Inc., Palantir Technologies Inc., and Block, Inc. saw the largest positive share price movements, while Spotify Technology SA, Intuitive Surgical, Inc., and Microsoft Corp. (Microsoft) saw the largest share price declines over the month.
Our global strategy saw continued strength in the month of July as many of our portfolios companies reported their quarterly financial results, which have broadly been positive and in line with our long-term forecasts. We believe several positive emerging themes will continue throughout the year and beyond.
The first is a shift in corporations focusing more on efficiencies within their businesses, particularly at the bottom line (earnings). We believe the ability for companies to run their businesses harder by being more astute with their spending and sizing their workforce appropriately can help them achieve earnings leverage; this may produce considerable upside to margins, which is starting to be seen in several companies’ second-quarter 2023 results. The second positive has been around artificial intelligence (AI) and machine learning (ML), where we are starting to see inflection points, for example, Microsoft trialling their “Copilot” product and ServiceNow, Inc.
launching a customer service AI tool, which we believe in time may provide revenue uplifts. A key structural theme that Hyperion identified approximately 10 years ago was AI and ML, however the potential upgrades to revenue streams, efficiencies in productivity and eventually earnings are only now starting to be recognised by market participants. Read more about the benefits of AI and ML within our Global strategy here.
Although we have seen strong performance for the year to date, we believe the long-term return outlook for our portfolio remains attractive, with forecast internal rates of return above their long-run averages.
Performance Commentary - June 30, 2023 The Hyperion Global Growth Companies Fund (Managed Fund)* returned 5.7% for June, outperforming its benchmark (MSCI World Accumulation Index (AUD)) by 2.6%. Tesla, Inc., Airbnb Inc., and Intuitive Surgical Inc. saw the largest positive share price movements, while Salesforce, Inc. and Alphabet Inc., were the only companies to see share price declines over the month.
The month of June closed off a strong month and financial year for the global strategy, and investors with long-term mindsets are being rewarded for their patience as a more stable 10-year U.S bond yield has helped the attractive economics of our portfolio produce positive results.
Hyperion has always believed that our portfolio would recover from what we viewed as a non-fundamental drawdown period and the negative duration impact from higher bond yields continues to provide an opportunity for long-term investors to increase exposure to some of the best listed businesses in the world at attractive prices. The global strategy continues to offer above average forecast 10-year returns at current prices. The portfolio has robust fundamentals with high and sustainable returns on capital, low financial gearing and the ability to produce positive free cash flows.
Our portfolio’s ability to take market share tends to increase during economic downturns when weaker competitors are suffering. This ability to grow by taking market share enables our stocks to handle cyclical earnings downturns relatively better than most listed companies.
In our most recent webinar (watch the replay here), we reminded our investors why we believe investing in high quality structural growth companies is important and discussed why we remain confident in our portfolio companies and their ability to produce excess returns.
Performance Commentary - May 31, 2023 The Hyperion Global Growth Companies Fund (Managed Fund)* returned 12.2% for May, outperforming its benchmark (MSCI World Accumulation Index (AUD)) by 11.1%. Palantir Technologies Inc., Tesla Inc. and ServiceNow Inc. saw the largest share price increases, while Kering SA, LVMH and Airbnb, Inc. saw the largest declines over the month. The month of May saw strong performance for the global strategy as a more stable 10-year U.S bond yield has helped the attractive economics of our portfolio to once again produce positive results. As we look forward, there are several positive emerging themes that we believe will continue throughout the year and beyond.
The first of which is a shift in corporations focusing more on efficiencies within their businesses, particularly at the bottom line (earnings). The ability to run these businesses harder and achieve earnings leverage may produce considerable upside to margins over the medium term. The second positive has been around artificial intelligence (AI) and machine learning (ML), where we are starting to see inflection points. A key structural theme that Hyperion identified approximately 10 years ago was AI and ML, however the potential upgrades to revenue streams, efficiencies in productivity and eventually earnings are only now starting to be recognised by market participants.
In our most recent webinar (watch the replay here), we reminded our investors why we believe investing in high quality structural growth companies is important and discussed why we remain confident in our portfolio companies and their ability to produce excess returns. We believe the long-term return outlook for our portfolios continues to look attractive with robust fundamentals, high and sustainable returns on capital, low financial gearing and the ability to produce positive free cash flows.
Performance Commentary - April 30, 2023 The Hyperion Global Growth Companies Fund (Managed Fund)* returned -1.1% for April, underperforming its benchmark (MSCI World Accumulation Index (AUD)) by 4.3%. Intuitive Surgical, Inc., Meta Platforms Inc., and Hermes International SCA saw the largest positive share price movements while Tesla, Inc., Roku, Inc., and Block, Inc. saw the largest share price declines over the month.
The first quarter reporting season for the global strategy has been very encouraging as a number of companies surprised on the upside, with revenue and earnings exceeding market expectations. We’ve seen a shift of focus from many companies to achieving bottom-line growth (earnings), rather than just top line (revenue) which we view as a positive move.
We believe this shift, coupled with the structural growth themes that we identify within our portfolios, is enabling our portfolio companies to continue their growth and profitability in a challenging consumer landscape. Ultimately, profitable businesses that grow by taking market share will become more valuable and should be in a better position to produce attractive returns over the long term.
Performance Commentary - March 31, 2023 The Hyperion Global Growth Companies Fund (Managed Fund)* returned 8.4% for March, outperforming its benchmark (MSCI World Accumulation Index (AUD)) by 4.5%. Salesforce, Inc., Meta Platforms, Inc., and Microsoft Corp. saw the largest positive share price performance while Block Inc. (Block) was the only position to see share price declines over the month.
It has been a very encouraging start to the year for our global strategy which has pleasingly responded well to several factors, including a strong reporting season and a continued decline in U.S. inflation which has seen a reduction in 10-year U.S. Treasury yields from a recent peak in October 2022. However, the unprecedented rise in interest rates by central banks has produced some casualties including Silicon Valley Bank, Signature Bank, and First Republic Bank. Hyperion did not and does not have any direct exposure to any of these companies nor any other mid/lower tier bank or traditional financial institution. We believe the recent events in the banking system may result in slowing credit growth and should be a net positive for long duration and higher quality assets.
While many of Hyperion’s portfolio companies have risen strongly since the start of the year, Block has underperformed recently after being the target of a short seller’s report. Overall, it is not unusual for Hyperion’s portfolio companies to face short sellers; this has occurred numerous times in the past. It is a function of our holdings being highly innovative businesses that are often difficult to assess.
Our ability to deeply analyse businesses is a key driver of our longterm success. We are however humble and cognisant that ‘short’ reports can in certain instances present information that may not be known to the market and/or ourselves. Following our initial review, we believe the evidence provided by Hindenburg’s short report is largely anecdotal and subjective and in our view is sensationalised.
Performance Commentary - February 28, 2023 The Hyperion Global Growth Companies Fund (Managed Fund)* returned 4.4% for February, outperforming its benchmark (MSCI World Accumulation Index (AUD)) by 2.3%. Tesla Inc, Meta Platforms Inc and Roku Inc. saw the strongest share price performance while Alphabet Inc., Amazon.com Inc and Intuitive Surgical, Inc. saw the largest price declines over the month. As we progress through the start of the year, Hyperion has been pleased with a number of our global companies’ full-year financial reports. Share prices over the month have responded positively to favourable financial reports released in February.
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