Now is the time for equities

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Mint Asset Management chief executive Rebecca Thomas says it is now time advisers started using equity investments for their clients rather than having portfolios which are heavily weighted towards income assets.

Friday, February 16th 2007, 6:20AM

by Philip Macalister

She says it has been totally rational to not use equity funds because they have been tax disadvantaged. However those disadvantages will be removed later this year. “Equity income growth is much better than buying high rates of non-growing annuity income streams,” she says.

Mint is a new funds management business headed by Thomas who is the former ING chief investment officer. It includes former ING executive Mark Ford and portfolio manager Shane Solly.

Mint yesterday rolled out its actively managed Australasian share fund, which is modeled, to some degree on ING’s Equity Selection Fund (ESF), which she and Solly had some involvement in.

Thomas says the Mint fund has a couple of distinguishing features from the ESF and other trans-Tasman share funds, including its mandate, its fees and its performance hurdles. The fund invests in Australian and New Zealand shares and is totally unconstrained. That is it can invest 100% in either market or it can go to cash.

She says other funds have some constraints around how far they can go in each market.

Also the currency management will be actively hedged.

The funds management fee of 1.25% is slightly lower than others in the market place, but out of that fee Mint pays advisers a 50 basis point trail fee and all the administration costs. She says the reality is that people are paying “57 basis points for our funds management abilities.”

Thomas says the hurdle rates for Mint to earn performance fees are also “genuine hurdles.”

As for who are the closest competitor, Thomas singles out Fisher Funds as it has done a very good job getting retail investors into shares, and Fisher’s two listed investment companies, Kingfish and Barramundi, are similar.

The Mint fund is a "high conviction" portfolio. Its style is GARP (growth at a reasonable price) and it aims for a return of the 90 bank bill rate, plus 5%. That target today is just over 12%.

Details on the Mint Asset Management roadshow are in the Diary.
Mint has also appointed a new equity analyst – find out who in the People section.