Colonial First State’s (CFS) flagship CFS Geared Share Fund has surpassed $10 billion in funds under management (FUM).
Returning 23.3 per cent over FY2023–24 and delivering an average annual return of 14.2 per cent since inception in 1997, CFS clarified that a $10,000 investment in the fund in August 1997 would now be worth some $350,000.
The CFS Geared Share Fund primarily invests in large, high-quality companies with strong balance sheets and earnings, with the objective of magnifying long-term returns from capital growth by borrowing to invest in large Australian companies.
It aims to outperform the S&P/ASX 100 Accumulation Index over rolling seven-year periods before fees and taxes, with the fund’s gearing magnifying returns from the underlying investments, whether they are gains or losses.
Commenting on the milestone, Peter Labrie, CFS executive director, FirstChoice, said geared funds continue to play a part within a diversified portfolio for members looking for above-average investment performance over the long term.
“The CFS Geared Share Fund is for long-term investors, and we are pleased that it has grown over the years to reach $10 billion in total assets,” Labrie said.
“We also acknowledge the strong investment performance of First Sentier Investors who have managed the fund over its 27-year history.
“Both CFS members and the advisers they work with are attracted to the long-term performance of our geared investment options and we will continue to develop new offerings over time.”
CFS added it has expanded its suite of geared investment options in recent years, with the launch of the CFS Geared Index Australian Share Fund and CFS Geared Index Global Share Fund in December 2021.
Last month, the firm reported its second consecutive year of double-digit returns for members of its MySuper balanced and growth funds.
Namely, the FirstChoice Employer Super Balanced Fund (MySuper Lifestage 1965–69) delivered a 12.1 per cent return for the financial year 2023–24, while the FirstChoice Employer Super Growth Fund (MySuper Lifestage 1975–79) delivered a 14.3 per cent return.
Moreover, CFS, which holds over $150 billion in funds under administration, is in the “relatively unique” position of holding no legacy unlisted assets, according to Jonathan Armitage, CFS chief investment officer.
“In an environment of higher interest rates, this has allowed us to deliver another year of solid returns for members,” Armitage said in July.
