Brisbane-based Hyperion Asset Management, which oversees $12.5 billion in assets, is navigating renewed market turbulence as bond market chaos threatens its recent recovery. The company specialises in managing growth company investments across global and Australian markets. Its performance was previously affected by a sell-off in software stocks amid artificial intelligence concerns. However, Hyperion’s strategic shift to reduce software exposure and pivot into mining companies has stabilised returns, with all three funds outperforming their respective benchmarks over the past six months.
A significant sell-off in bond markets, marked by 10-year Treasury yields recently surpassing 5 per cent, now poses a fresh challenge for growth stocks, as higher yields diminish the value of future earnings. Investment director Jolon Knight noted that “Macro headwinds are slowly starting to rear their heads again,” cautioning that elevated rates and energy shocks could pressure equity multiples. Hyperion’s Global Growth Fund, approximately $3.4 billion, has shown more resilience than its Australian strategies due to holdings in semiconductor stocks like ASML and Nvidia, though it has underperformed its benchmark over the past year.
Despite industry discussions, Hyperion remains largely unfazed by calls for a slowdown in AI advancements, with Knight suggesting regulatory dialogues will not impede adoption. Tesla constitutes 13 per cent of the global fund, and Elon Musk’s SpaceX is now the fifth-largest position. Conversely, Hyperion’s two Australian-focused funds continue to struggle. The $1.8 billion Australian Growth Companies fund has lagged its benchmark significantly over 12 months, despite boosting mining sector exposure with additions like BHP and Rio Tinto. The $1.1 billion Australian Small Growth Companies Fund, the firm’s weakest performer, has also trailed its benchmark substantially over the same period.
