Citywire: Five fund managers go bargain hunting in the US

The is an excerpt from an article first published in Citywire Wealth Manager on 16 August 2022.

After years of stock market leadership, US equities shared in the severe global downturn witnessed during H1 2022.

After years of stock market leadership, US equities shared in the severe global downturn witnessed during H1 2022 – as evidenced by the S&P 500 suffering its worst first half of the year since 1970.

Volatility was significantly higher during the period, as investors were confronted with multiple negative factors – including heightened inflation, monetary policy tightening, continued supply chain strains and the return of war in Europe.

However, as stock prices across all sectors – excluding energy – moved sharply lower, five fund managers capitalised on attractive entry points in several high-conviction names. Here’s how they made the best of a bad turn. 


Jacob Mitchell: Founder and chief investment officer at Antipodes Partners

Leading pharmaceuticals company Merck is a quality defensive business that is not facing the same inflation pressures as other defensive parts of the market.

Almost a third of the company’s earnings come from vaccines and animal health, which have high barriers to entry, consolidated market structures and, as a result, higher profitability relative to traditional drug development.

Merck manufactures the HPV vaccine Gardasil, which has been proven to prevent a variety of cancers and has a long runway for growth – while the animal health business has high brand equity, particularly among herd animals.

In terms of its pharma business, Merck’s Keytruda is the most successful immuno-oncology drug globally. While the patent cliff begins at the end of 2028, Merck is preparing itself via combination studies with next-generation immuno-oncology drugs that could extend Keytruda’s dominance, internal pipeline development via its own R&D engine, and ample balance sheet capacity for acquisition.

You can access the original article here.



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This communication was prepared by Antipodes Partners Limited (ABN 29 602 042 035, AFSL 481 580) (Antipodes). Antipodes 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. This communication is for general information only and was prepared for multiple distribution and does not take account of the specific investment objectives of individual recipients and it may not be appropriate in all circumstances. Persons relying on this information should do so in light of their specific investment objectives and financial situations. Any person considering action on the basis of this communication must seek individual advice relevant to their particular circumstances and investment objectives. Subject to any liability which cannot be excluded under the relevant laws, Antipodes 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.

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16 August 2022
3 min