Financial Standard.
The Ophir Opportunities Fund has outperformed every rival in its category, topping the Australian small-cap fund rankings across all timeframes, according to the latest Mercer investment survey.
The fund has returned 39.6% over one year besting the median fund’s 3.5% return and S&P/ASX Small Ordinaries benchmark’s -1.33%.
Over three years, it’s returned 25% per annum, well ahead of the median fund’s 4.3% return and S&P/ASX Small Ordinaries benchmark’s -0.8%.
Over five years, it’s generated a 30.8% return, outpacing the median fund’s 16% return and S&P/ASX Small Ordinaries benchmark’s 10.2% return.
Over seven years, it’s posted a 22.1% return per annum, eclipsing the median fund’s 8.6% return and S&P/ASX Small Ordinaries benchmark’s 4.5% return.
And across 10 years, it’s returned 23.5% per annum, compared with the median fund’s 9.4% return and benchmark’s 6.3% return.
Since inception in August 2012, the fund has also led the field, delivering an annualised return of 28.7%.
Ophir founder and portfolio manager Andrew Mitchell told Financial Standard that what sets the fund apart isn’t just long-term performance, but the rare ability to also outperform in the short term – something few peers manage.
Mitchell credited Ophir’s consistency to a process that repeatedly identified standout companies early and holding them with conviction.
He said over each two-to-three-year period, the portfolio has featured major winners, including Life360 and Generation Life last year, to Afterpay, a2 Milk, and Magellan in previous cycles.
“The key thing is, we’ve been able to invest in all of them, and got on to them early,” he said.
Though generating strong returns isn’t about just picking the right stocks – it’s about backing them with conviction, he said.
He said that means making them significant positions in the portfolio and staying invested even when sentiment turns. In Australia’s small-cap market, he noted, tall poppy syndrome is alive and well; when a company performs strongly, it often attracts scepticism from investors, short sellers, and those who missed out.
To hold on through that, you need to have done the work and trust your process, he said.
That said, he acknowledged the team isn’t infallible and is constantly learning, adding that it continues to evolve its process.
“We’ve got some fantastic analysts here, and I really make sure that they’re running at the right pace. They’ve got a cadence in a process – they’re looking at a company, building a model, speaking to suppliers, competitors, and customers. They write up a stock thesis, they present it to myself and [Ophir co-founder] Stephen [Ng], we discuss it, and then work out the weight. It’s just rinse and repeat, rinse and repeat – at a good cadence,” he said.
To view full article: The top Australian small-cap fund, year after year | Financial Standard
By Andrew McKean