“We’re pretty close to winning quite a large mandate there.”
The fund’s Global Growth Companies Fund has returned 20.5 per cent a year since its inception in 2014, compared with the MSCI World Index of 14.5 per cent. Latest performance figures show the fund’s returns over a 12-month period from October 2019 returned 2.7 per cent above the same benchmark.
Hyperion has “backed both horses” in the autonomous car space by investing in both Google and Tesla, a decision Mr Arnold said was based on the company’s strategy to invest in dominant market players.
Mr Arnold said Australia should “absolutely” follow Britain’s lead to ban new petrol, diesel or hybrid cars within 15 years but the government was beholden to lobby groups.
“The fossil fuel and car industry is really powerful. They’re very good at lobby, they’ve got lots of money.”
The global economy is in a period of low economic growth, Mr Arnold said, and rising wealth inequality, climate change and slowing population growth meant low growth was becoming the new norm.
“If you look at the actual GDP growth for the economy, it’s been decelerating over the last three years. That’s the same in China, Europe and Japan. It’s been slow,” he said.
Mr Arnold criticised governments for engaging in stimulus activity, saying while short-term investment would be a “sugar hit”, it would do more damage in the long term.
“It’s just more debt that will be piled onto the excessive debt,” he said.
“Politicians don’t want to accept that we’re in a low growth world but that’s really what we’re facing.”
Hyperion has reacted to this macro-economic stage by investing in companies that grow by taking market share, not relying on economic growth.
The largest holdings in its global growth fund include Microsoft, Amazon, Visa and Facebook, and Mr Arnold said these companies built their growth by taking market share over a long period of time.
“They’re not traditional monopoly players … They’re not price gougers, their value propositions are very strong.”
Charlotte is a reporter for The Age.