The top 5 holdings of this popular fund manager are nothing like its benchmark ASX 300 index

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Regular Capital Club readers will know I’ve long been bearish on the future prospects of many of the popular ASX blue chip stocks.

Bank shares have struggled in recent times, and face more headwinds as house prices continue their steady decline.

The problems at Telstra Corporation Ltd (ASX:TLS) are well documented, with the Telstra share price down 11 per cent since I said owning Telstra shares today is likely ‘dead money’ for the next few years.

It seems like the popular Hyperion Australian Growth Companies Fund is thinking along similar lines. The fund’s top 5 holdings bear no resemblance whatsoever to its benchmark ASX 300 Accumulation Index.

The fund’s philosophy is that the highest proven quality businesses with the strongest competitive advantages and organic growth opportunities produce superior shareholder returns over the long-term. Long term capital preservation is paramount.

In its May update, the fund lists its top 5 holdings as follows…

Seek

The SEEK Limited (ASX:SEK) share price has had a strong last 12 months, its shares rising almost 30 per cent.

SEEK is well-known and revered for its employment, learning and international classified platforms in use across 12 countries and it reported a 27% increase in sales revenue in February to book a half-year net profit of $102 million – up 21%.

SEEK is an 11.9 per cent holding in the Hyperion Australian Growth Companies Fund, compared to SEEK’s 0.4 per cent weighting in the benchmark index.

SEEK is a member of The Capital Club 10, a basket of ASX stocks I think have a good chance of out-performing the S&P/ASX 200 Index over the next three years.

REA Group

The REA Group Limited (ASX:SEK) share price has also had a strong last 12 months, its shares rising 39 per cent.

The owner of realestate.com.au saw its share price jump higher in May after reporting revenue for the 3 months to March 31st 2018 rose by 19 per cent to $186 million. EBITDA for the quarter also jumped 19 per cent higher to $102 million.

REA Group is an 11.5 per cent holding in the Hyperion Australian Growth Companies Fund, compared to REA’s 0.3 per cent weighting in the benchmark index.

REA Group is also a member of The Capital Club 10.

Domino’s Pizza

Although the Domino’s Pizza Enterprises Ltd (ASX:DMP) share price has been on a roller coaster the past 12 months, it is up just 2 per cent in the last year.

Earlier this month a broker note out of the Macquarie equities desk upgraded Domino’s shares to an outperform rating from neutral with an increased share price target of $55.00.

Domino’s Pizza is a 10 per cent holding in the Hyperion Australian Growth Companies Fund, compared to Domino’s 0.2 per cent weighting in the benchmark index.

Cochlear

The Cochlear Limited (ASX:COH) share price has had a strong 12 months, its shares jumping 26 per cent higher.

The bionic ear medical device company is forecasting net profit growth of 7 to 12 per cent in financial year 2018, which is modest when compared to its 50+ P/E ratio.

Cochlear is a 9.7 per cent holding in the Hyperion Australian Growth Companies Fund, compared to Cochlear’s 0.7 per cent weighting in the benchmark index.

Macquarie Group

The Macquarie Group Ltd (ASX:MQG) share price has had a stellar 12 months, jumping 36 per cent higher in the last year.

Macquarie Group is a global provider of funds management, financial advisory, banking and financial services. It differs from the big four banks in that it has a global footprint, and its profits are derived more from its fund management business than traditional banking.

Macquarie Group is a 9.1 per cent holding in the Hyperion Australian Growth Companies Fund, compared to Macquarie’s 2.2 per cent weighting in the benchmark index.

Macquarie Group is also a member of The Capital Club 10. 

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