Foresight Analytics has recently completed a rating assessment of the Plato Global Net Zero Hedge Fund (PGNZHF). The Fund has been assigned a VERY STRONG rating and a Foresight Product Complexity Indicator of MORE COMPLEX. The fund is a registered retail unit trust managed by Plato Investment Management Ltd., a boutique quantitative fund manager that is partly owned by the ASX listed Pinnacle Group (PNI).
The investment rating of VERY STRONG is the second highest rating on the scale used by Foresight Analytics and reflects a very strong level of confidence that the Fund can deliver a risk-adjusted return in line with its investment objectives. A Foresight Complexity Indicator of MORE COMPLEX has been assigned, indicating that the Fund invests in listed assets and uses leverage, short-selling and derivatives. This type of investment is suitable for investors who understand the characteristics of these types of investments.
Plato was established in 2006 as an independent funds-management business within Pinnacle’s ‘house of boutiques’. The firm manages approximately $9.8 billion in assets across a range of strategies including Enhanced Index, Core, Tax-Exempt, Income (Australian and Global), Low Volatility, Global Low Carbon and Global Net Zero. The firm uses a systematic, quantitative investment process across all of its equity investment strategies. Plato’s approach is based on fundamental, bottom-up analysis, using factors such as intrinsic value, sentiment, and holistic quality to forecast stock performance.
The Plato Global Net Zero Hedge Fund was launched on 1 September 2021. The Fund also targets a net-zero carbon footprint at the overall portfolio level. In practice, this translates to a target of at least -5% carbon exposure vs. the MSCI World Index (the ‘benchmark’). This creates a margin of safety to ensure that the Fund achieves its net-zero objective. The carbon credentials (ex-post) of this strategy have been independently verified by Foresight Analytics.
Foresight’s Analytics’ analyst, Dan Grioli says “The Fund is managed by Dr David Allen, an experienced portfolio manager whose career includes managing both quantitative long/short and low-carbon investment strategies”.
Dan Grioli further added that “While the Fund has a relatively short track record, Plato’s business, investment team, philosophy and process are all well established. The Fund’s long/short strategy makes it possible to achieve net-zero carbon exposure without taking excessive risk. These characteristics give Foresight the strong conviction that the Fund is capable of meeting its medium-to-long-term investment and carbon objectives”
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About Foresight Analytics’ Investment Due Diligence Rating (IDD Rating)
The objective of Foresight Analytics’ Investment Due Diligence Rating (IDD Rating) is to identify the best funds and opportunities for future investment. We assess the fund’s historical risk-adjusted performance – compared to its peers – to form a holistic view of the manager’s ability to deliver future returns. The IDD rating indicates the quality of the investment option within the context of a diversified portfolio and full investment cycle.
Foresight’s analysts use a 5-point scale to determine how the fund will perform against a range of risk factors.
- SUPERIOR indicates the highest level of confidence that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is highly suitable for inclusion on APLs.
- VERY STRONG indicates a very strong conviction that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- STRONG indicates a strong likelihood that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- COMPETENT indicates the fund may deliver a risk-adjusted return in line with its relevant benchmark and that it may be suitable for APLs.
- WEAK indicates the fund is unlikely to deliver a risk-adjusted return in line with its investment objective and that it is not suitable for most APLs.
A ‘Hold’ designation is applied to a fund’s rating if a material change impacts the fund manager, and we need to review the rating.
A ‘Sell’ designation indicates the Foresight Investment Ratings Committee considers risk factors to be elevated enough that maintaining an investment in the fund as part of their diversified portfolio is questionable.
Foresight Complexity Indicator
A Foresight Complexity Indicator (FCI) highlights the complexity of an investment product based on a range of indicators. These typically include its terms and conditions, performance-based fees, liquidity structure, financial leverage, use of derivatives, rare and niche asset class/opportunity set, currency exposure and the level of transparency offered for investors. Foresight believes these factors can disproportionately affect risk-adjusted return outcomes for investors even if a manager is very skilled. Investors can use FCI as a guide to portfolio position sizing within a diversified portfolio context.
The full research report is available on the Foresight 360 Digital platform. The platform can be accessed via www.foresightanalytics.com.
Foresight Analytics Disclaimer:
The material contained in this document has been prepared solely by Foresight Analytics and Ratings Pty Ltd under Australian Financial Services Licence No. 494552. The material contained in this document is for general information purposes only, and individual financial positions, objectives and circumstances have not been taken into consideration. The information contained in this material should not be acted upon without obtaining advice from a licensed investment professional. It is neither an offer to sell nor a solicitation of any offer to purchase and /or sale of any securities in an investment product or managed investment scheme, derivative, index, or financial instrument, nor is it an advice or a recommendation to enter into any transaction. No allowance has been made for transaction costs or management fees, which would reduce investment performance. Any investment in a financial product or fund involves a degree of risk. Actual results may differ from the reported performance. It is important to note that past performance is not an indication of future performance.
Foresight Analytics and Ratings research material maybe based upon information provided by the investment manager which is known to us or which was obtained from sources that we believed to be reliable and accurate at the time of publication, but Foresight Analytics and Ratings makes this information available on an “as is” basis without a duty to update, make warranties, express or implied, regarding the accuracy of the information contained herein. Errors may exist in data acquired from third party vendors, & in coding related to statistical analyses. Foresight Analytics and Ratings Pty Ltd disclaims any & all expressed or implied warranties, including, but not limited to, any warranties of merchantability, suitability for a particular purpose or use. All opinions and views expressed constitute judgment as of the date of the communication and may change at any time without notice and without obligation. Such information may be based on certain assumptions and involve elements of subjective judgment and analysis.
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“A good decision is based on knowledge and not on numbers.”
Plato (427-347 BC)
Plato Investment Management Limited AFSL 504616 ABN 77 120 730 136 (‘Plato’).
Whilst Plato believes the information contained in this communication is based on reliable information, no warranty is given as to its accuracy and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Plato disclaim all liability to any person relying on the information contained on this website in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information.
Pinnacle Fund Services Limited ABN 29 082 494 362 AFSL 238371 is the product issuer of funds managed by Plato. Any potential investor should consider the relevant Product Disclosure Statement available at https://plato.com.au/retail-funds/ in deciding whether to acquire, or continue to hold units in a fund. The issuer is not licensed to provide financial product advice. Please consult your financial adviser before making a decision. Past performance is not a reliable indicator of future performance.
Disclosure contained on this website is for general information only. Any opinions or forecasts reflect the judgment and assumptions of Plato on the basis of information at the date of publication and may later change without notice. Any projections are estimates only and may not be realised in the future. Information on this website is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained on the website is prohibited without obtaining prior written permission from Plato. Past performance is not a reliable indicator of future performance.