Transcription of Finance News Network Interview with Antares Elite Opportunities Fund Portfolio Manager, Nick Pashias
Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from the Antares Elite Opportunities Fund is Portfolio Manager, Nick Pashias. Nick, welcome back.
Nick Pashias: Thank you, great to be here.
Carolyn Herbert: Can you start by giving us an introduction to the Fund, what’s its approach and objectives?
Nick Pashias: The Elite Opportunities Fund is a concentrated Fund. So we own no more than 30 companies and they’re really our highest conviction ideas, of Australian listed securities. The objective is to outperform the underlying benchmark, which is the ASX200 index by about four per cent, over rolling five-year periods.
Carolyn Herbert: With market volatility becoming a lot more commonplace, have you managed to find any investment opportunities, or are there any stocks that have turned around spectacularly for you?
Nick Pashias: Early in May we went to China. So I actually went over to China to have a look to see what the landscape was like. I try and get over there at least once a year. And what was clear this time was that things had started to improve. The Government had embarked on a stimulus, particularly in infrastructure; we saw a lot of demand for infrastructure projects. And importantly, 25 per cent of China’s steel goes into infrastructure projects and that has a lot of implications, for the iron ore price.
So we came back in May reasonably positive, certainly relative to the rest of the market about iron ore. And we began buying Fortescue Metals Group Limited (ASX:FMG). So we started buying Fortescue at around $3, today it’s up at about $4.50. So that’s done pretty well for us.
Another one during the quarter that we did a lot of work on was Chorus Limited (ASX:CNU). It’s a New Zealand based company, it’s effectively building the NBN, but in New Zealand. And this is an infrastructure company that was really trading at quite low multiples of earnings, compared to other infrastructure companies that we could find. So we began buying that stock and pleasingly that’s done well for us, as well.
Carolyn Herbert: So in light of the volatility, how has the Fund performed over the past 12 months?
Nick Pashias: There has been a lot of volatility, but pleasingly the Fund’s done well. On a net basis, so after our fees, we’ve managed to outperform the index by 2.5 per cent, which is a pleasing year.
Carolyn Herbert: Finally Nick. What are your expectations for earnings this reporting season?
Nick Pashias: I think we’re at a very interesting point in markets. We’ve seen over the last few years the yield defensive names perform particularly well. We find them today trading at very high multiples. On the other side you’ve got the cyclicals, which are on depressed earnings, trading on low multiples. So earning season will be very interesting to see if that trend can continue. We think we’re at an inflection point potentially, and we’re really looking forward to reporting season.
Carolyn Herbert: Nick Pashias, thanks for the update on the Antares Elite Opportunities Fund.
Nick Pashias: Thank you.