How GFC winners are playing it now

April 9, 2020
How GFC winners are playing it now

Dion Hershan, Anton Tagliaferro, David Pace and Nick Pashias outline how they’re viewing COVID-19 compared to the Global Financial Crisis (GFC) in terms of traps and opportunities.

The top fund managers of the global financial crisis have dusted off their crisis playbooks and are getting ready to seize what could be the best buying opportunities for more than a decade.

Financial markets are in the grip of COVID-19 pandemic panic. The Australian market has dropped more than 25 per cent since scaling its record peak of 7162 on February 20.

The last six weeks have been a disaster, with many listed companies telling investors they have no idea where their earnings will land in the current financial year.

The last time companies suffered such concerted damage to their share prices was during the GFC in 2008-09. With that in mind, Smart Investor asked financial services company Morningstar to compile a list of four funds that outperformed during the GFC and its immediate aftermath where the portfolio managers are still in place.

They include Dion Hershan’s Yarra Capital Australian Equity Fund, Anton Tagliaferro’s Investors Mutual All Industrials Share Fund, David Pace and Jonathan Koh’s Greencape High Conviction Fund and Nick Pashias’ Antares Elite Opportunities Fund.

The GFC compares most closely with the COVID-19 crisis in terms of the magnitude of share price declines suffered by investors. However, fund managers are struggling to draw out significant further direct comparisons.

“This is a far more significant economic event. It’s a monumentally larger shock and it’s coming at a time when the government has probably got a lot less ammunition to fight it,” says Hershan.

Read more…. (subscription to The Australian Financial Review required)