Through thick and thin — ten years with these ten companies
By Frank Jasper, Director
07 July, 2017
At Fisher Funds, we've always talked about the importance of investing for the long term. We seek to invest in companies that have sustainable competitive advantages that allow them to deliver, regardless of the economic environment of the day. Over the last ten years, the economic environment has been anything but normal so the companies we invest in have had to be resilient.
Looking at the Fisher Funds KiwiSaver Scheme Growth Fund, ten companies have stood the test of time; proving themselves to be robust. These companies have been part of the portfolio since KiwiSaver started. That's right, since 2007-08 we have invested in the following companies on your behalf.
|Company||Country||Annualised Return (%)
incl. share price change & dividends
|Delegat Group||New Zealand||13.7|
|Ryman Healthcare||New Zealand||17.6|
|Tox Free Solutions||Australia||1.9|
Source: Fisher Funds, Factset
For some of these companies the last ten years hasn't been smooth sailing. So what is it they have that has seen them deliver above-market returns and keep us invested over the long term?
We think there are several common, defining features:
- High quality management running the company who have a clear vision and strategy for where the company is headed
- A history of growing their business and growing their profits
- Quality, established businesses who are market leaders in their field.
The contribution these companies have made to your returns cannot be underestimated. For example, every $1,000 we invested in Ryman Healthcare back then is now worth $5,000 (a profit of $4,000). As we've discussed many times, Ryman is New Zealand's leading retirement village operator and is benefiting from our aging population. Similarly, Freightways is the dominant player in the domestic express parcel market as people shift to buying things online and having them delivered to their home or workplace.
Across the Tasman, AUB Group's "owner-driver" model creates a strong incentive for the principals of the insurance brokerages in which it takes a stake to continue to grow their businesses. This alignment has benefited AUB shareholders with both individual brokerages growing and the size of AUB Group's network increasing.
Over the last 10 years a series of strategic acquisitions has enabled Tox Free to fulfil its vision of becoming Australia's leading hazardous waste processor. Unfortunately the steep decline in capital expenditure in the mining sector over recent years has meant that healthy growth in Tox Free's earnings per share over the decade has not been reflected in its share price performance.
Further afield, Italian company Brembo, the Formula 1 braking supplier, has significantly outgrown its peers by using its technological advantage to take share in the market for performance braking systems (think high-end cars like Ferrari, Porsche, and Mercedes).
While Icon, an Irish clinical research organisation, has built a world leading business helping pharmaceutical companies get new drugs through clinical trials and to market. This industry has experienced rapid growth as its clients seek to shorten drug approval timeframes.
You might think ten companies is a small sample but since 2007 we've continued to identify and add many other companies to your portfolios that will remain core holdings over the next decade. We hope to be talking with you about them in another ten years' time.