Australian Equities, Growth

Our large, experienced team has the resources to undertake deep industry analysis and comprehensive engagement with senior company management and boards.

While we invest in listed Australian companies, we also engage with unlisted companies, suppliers, customers and industry experts to identify risks and opportunities. Identified ESG risk factors are used to assist in developing quantitative and qualitative assumptions in the assessment of industries and stocks.

Investment Philosophy and Approach

Our Australian Equities, Growth team is one of the largest in the Australian share market and has the resources to complete deep industry analysis to understand the drivers of return on invested capital. While listed companies tend to be well covered by the sell-side broker community, they are not always well researched. 

Accordingly, we maintain a significant level of contact with listed companies, unlisted competitors, suppliers, customers and industry experts to identify opportunities. 

Our philosophy is that:

  • Growing companies which generate consistent long term returns and can reinvest above their cost of capital provide the greatest shareholder value;
  • Changes to company returns on invested capital has high explanatory power for stock outperformance; and
  • Understanding industry drivers is critical to understanding what drives stock performance.

Team Profile

The Australian Equities, Growth team is one of the largest and most experienced in the Australian equities market. The team is led by Dushko Bajic, who has ultimate responsibility for the performance of all Australian Equities, Growth portfolios. 

Alex Gallard, Senior Analyst, is the team's RI Representative. Alex has been with the firm for more than 25 years.


Stewardship and ESG Integration

We consider ESG risks to be factors that may place business value at risk. Companies at risk are identified using both external providers and our own internally driven research, which is based on a systematic and extensive company meeting program. Company meetings provide us with the opportunity to engage on ESG issues and gain greater insight into potential risks and opportunities. It also provides us with the opportunity to positively influence companies towards ESG best practice where appropriate. 

Identified ESG risk factors are used to assist in developing the quantitative and qualitative assumptions used by analysts in their assessment of industries and stocks. This analysis is vigorously stress tested and screened under a peer review process. This process seeks to highlight the analyst's and team's conviction in the target price and buy/sell recommendation.

Assessment and monitoring

ESG risks are primarily identified by the team's own internally-driven research, which is based on a rigorous company engagement programme. Analysts assess how companies are managing ESG issues and encourage the entities in which they invest to improve their ESG performance and disclosure.  


ESG considerations are used to help develop quantitative and qualitative risk assumptions in analysts' assessment of industries and stocks, and are overlaid in target price and stock recommendations. 


We have active dialogue with chairpersons and/or senior company management on material ESG issues which we identify through our consideration of ESG risks. We try to gain comfort that the company's senior management and board are aware of, and accountable for, the management of material issues. 

Where we feel material issues are not being appropriately addressed it can ultimately flow into our proxy voting and investment decisions. 

Investment Information and Performance

Investment characteristics

Average turnover across all funds*
(Five years annualised)
Stock name retention over five year period* 36%
Number of holdings Wholesale Australian Share Fund** 30


Top five holdings
(as at 31/12/2016)
All funds combined*
Commonwealth Bank of Australia
Westpac Banking Corporation
National Australia Bank
BHP Billiton Ltd
Australia and New Zealand Banking Group
Top five active holdings
(as at 31/12/2016)

Wholesale Australian Share Fund
(In alphabetical order)**
Aristocrat Leisure Ltd
Brambles Ltd
James Hardie Industries NV
REA Group Ltd
 % of portfolio companies met with 
Across all funds, during life of investment.


Performance and investment characteristics are as at 31/12/2016
Performance is quoted pre-fees and in $A terms.  Investors in other currencies will be subject to exchange rate fluctuations which will affect investment returns.
Past performance is not indicative of future performance.
Source: First State Investments
*Includes all funds and segregated accounts managed by any entity within Colonial First State Global Asset Management. Not all funds and accounts are registered or available in all jurisdictions. This may not be representative of your jurisdiction.
**This Fund has been selected as representative of the strategy but this may differ across the other funds and accounts within the same strategy.

Please follow this link for information on how our RI and Stewardship Measures are calculated. 


% of the team’s portfolios outperforming their relevant benchmark over five years *
Weighted average of outperformance*
(Five years annualised. Weighted by size of fund)
Absolute return (per annum) over five years **
Wholesale Australian Share Fund

ESG Profile

The following tables incorporate third party information to provide additional context. We believe that providing an independent view of some typical ESG issues facing the industries and countries where we invest helps to emphasize the importance of considering ESG factors, as well as the value that this approach can add to investment outcomes. These risks are not company specific, but are relevant to the team's larger industry and country exposures.

This contextual information should be considered alongside the description of the team's approach to integrating and engaging on ESG issues, and the company-specific case studies provided. Taken together a more complete view can be formed on how the team is able to generate value through responsible investment and stewardship.

Typical ESG Risks by Sector

The bar chart below counts the number of times different risks have been flagged by Sustainalytics as being material for the different sectors the team invests in. The line graph does the same, only as a weighted average based on the value of the team's holdings in each sector across all portfolios. These risks are generic for the industry and may be different for individual companies. They also don't reflect how individual companies are managing the risks. 

Sector Split

Typical ESG - Risks by Sector

Sector exposure percentages are as at 31/12/2016
Source: Sustainalytics (sector risks)

Climate Change

The section below provides addition, team specific, information on climate change. Further information on our approach to climate change can be found in our climate change statement. 

Team Climate Change Statement

We consider climate change and its associated risks to be an important issue. It is encouraging to see the majority of listed Australian companies taking steps to reduce their carbon footprint. These improvements may come through energy efficiency, reduced waste and emissions, improved technology and increased productivity.

Having an understanding on company-specific data emissions, despite its limitations, can help to focus our attention on companies and industries where risks and opportunities may lie. This can be a catalyst for further in-depth assessment of these companies and industries, using our bottom-up, fundamental research and analysis. 

Holdings in companies with material fossil fuel revenues 

The table opposite outlines the companies which the team invests in that have exposure to fossil fuels. There is no revenue, cost curve or other threshold applied and so the fossil fuel exposure should not be seen as a guide to the risk of stranded assets, however it is reasonable to expect that the attention paid to the risk of stranded assets by teams will correspond to their fossil fuel exposure.

Number of Companies % of Funds
Number of companies 153 100%
Fossil Fuel Companies inc gas 9 16%
Total 9 16%
Companies with Gas Reserves 5 9%

Carbon exposure

The table opposite provides an overview of the team's carbon exposure. The first measure provides an equity ownership approach to accounting for the emissions, while the second set of numbers provides a guide of how efficient the average company held is versus other companies in that industry group. The chart below shows the difference between the two. 

The carbon emissions, fossil fuel and revenue data have been provided by MSCI. 21% of the carbon emissions data has been estimated due to gaps in company disclosure and 5% were not covered. Companies without carbon or revenue data have been excluded, hence the difference between these and the fossil fuel numbers. Please see the RI and Stewardship Measures page for more information on how these and other metrics have been calculated.

Sector Equity Share Carbon Emissions Number of Companies Team Average Team Company Intensity Number of Companies (GICS) Industry Group (Australia) Average Industry Group Intensity (Australia)
Materials 851339.04 35 875.9 73 791.56
Transportation 349022.95 3 881.9 11 763.77
Food & Staples Retailing 52909.79 2 74.73 3 68.26
Energy 49893.97 8 1461.39 22 875.98
Telecommunication Services 7837.15 2 68.38 7 61.79
Consumer Services 7591.04 11 49.03 26 56.54
Banks 4865.47 6 5.59 12 5.76
Commercial & Professional Services 3197.72 13 35.26 21 79.26
Food Beverage & Tobacco 2496.6 4 151.37 15 67.9
Health Care Equipment & Services 1969.9 7 42.15 20 33.13
Other 5926.09 56 33.49 208 314.38
Grand Total 1337049.73 147 207.74 418 299.6

Difference Team Average Intensity vs Industry Average Intensity

Fossil Fuel and carbon information are as at 31/12/2015 (most recently available), holdings information is as at 31/12/2016
Source: MSCI

Proxy Voting

Proxy Voting

The team's full proxy voting record and statistics are available here.

Proxy voting history by type of resolution

The table below contains the proxy voting history for the team by issue type. The chart provides the same information for 2016.

Abstain Against For 2016 Total
Audit/Financials 6 6
Capital Management 86 86
Director election 10 368 378
Director Remuneration 1 30 31
Executive Remuneration 2 18 164 184
General business
Governance related 6 67 73
M&A 5 5
Remuneration Related 1 7 149 157
Shareholder proposal 1 1
Shareholder rights 4 4
Grand Total 3 42 880 925

Proxy voting information is as at 31/12/2016
Source: First State Investments / CGI Glass Lewis

Please follow this link for information on how our RI and Stewardship Measures are calculated. 

Voting Independence 

The chart below shows the number of times the team have voted against management recommendations, our proxy advisors recommendation or against both. The purpose of this table is to show the independent judgement which is applied by the team when making voting decisions.