Future Fund is amplifying alpha in a divergent economy with new partnership

InvestorDaily

In its latest Year in Review report, the Future Fund declared that in 2022–23, “the role of beta is increasingly challenged and the role of alpha is more important than ever”. “The divergence of economies means companies can better distinguish themselves in a more difficult environment,” the sovereign wealth fund said. “As a result, active alpha-seeking strategies in our $65 billion listed equities program are increasingly attractive, provided we can be confident that excess returns will be sustained.”

To further its chances of success, the fund confirmed in its annual report that it has begun a new partnership with Maple-Brown Abbott, a domestic, privately owned boutique fund manager. The goal, the fund said, is to pursue “persistent” alpha opportunities that exist in the Australian small cap space. “Relative to other segments of the domestic equity market, Australian small company stocks have a lower level of analyst coverage, higher dispersion in analyst forecasts and greater forecasting error,” the fund said.

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