Morningstar report praises high performing female PMs

In honour of International Women’s Day (IWD) on Friday, a new report from Morningstar has highlighted the achievements of high-performing female portfolio managers, shining a spotlight on three from Yarra Capital Management, First Sentier Investors and Platypus Asset Management.

The report also aligns with a study conducted by Fidelity International on retail investing between 2011 and 2020, which found women outperformed men by 0.4 per cent per year on average. It revealed the female portfolio managers who scored highly in Morningstar’s analysis of their correlation with its ‘People Pillar’, a rating assigned to an investment strategy that contributes to its overall ‘Morningstar Medalist Rating’.

The 62 portfolio management teams with female leads in Morningstar’s sample generated 1.2 per cent alpha in the last 12 months on average and have achieved 0.89 per cent alpha annualised over five years net of fees, to December 2023.

Katie Hudson from Yarra Capital was singled out for her High People rating, having spent the last seven years at the firm and is now Head of Australian Equities Research and Portfolio Manager for its small- and mid-cap strategies.

“Hudson differentiates her investing with the utilisation of a longer-term approach that emphasizes style-neutrality and risk management. The judgments made by Hudson and her team as to what is truly “quality” separates her from the pack,” Morningstar’s report said.

“Hudson leads the Yarra Australian Smaller Companies Fund (Morningstar Medalist Rating of Gold), after UBS partnered with Yarra Capital to manage the retail investment in 2018. A strong focus on quality and durable businesses, as ever prudent in small caps, has led the fund to top-quartile performance over the last five years, and it remains a top pick in the Australian small-cap universe with consistent results year on year.”

Dawn Kanelleas from First Sentier Investors was also celebrated for her High People rating, with her longevity at the firm and leadership of the small- and mid-cap team also praised.

“The FSI Australian Small Companies Fund (Morningstar Medalist Rating of Gold) led by Kanelleas was incepted in 2008. Kanelleas has been guiding this team to success with exceptional results over a prolonged period, beating both category peers and the benchmark over the approximately 15 years the strategy has been running,” the report said.

“It should be noted that the fund is currently in the top two quartiles o fperformance relative to category peers over all rolling periods ranging from one to 15 years.”

With an Above Average People rating, Platypus Asset Management Portfolio Manager, Jelena Stevanovic, has spearheaded the qualitative investment team since 2016 after joining the firm just eight years before that.

“She has led the qualitative insights that generate consistent returns for investors through growth company investing. Stevanovic identifies dynamic industries with companies that have growing free cash flows as well as strong management teams to generate quality portfolio allocations,” the report said.

“Since Stevanovic took the lead in 2016, the fund (with a Morningstar Medalist Rating of Bronze) has outperformed both index and category peers, positively adding to the strong historical track record. The fund’s performance is commendable through nearly every rolling period, noting second- and top-quartile performance through the rolling five-, 10-, and 15-year periods.

“Under Stevanovic’s qualitative lead, the fund is in good stead.”