Mans Carlsson, co-portfolio manager and head of environmental, social, and governance (ESG) at Ausbil, has offered insights into the firm’s investment strategy. Ausbil, a Sydney-based firm, oversees $19.5 billion in assets. Carlsson noted the fund’s outperformance since inception, despite recent underperformance when sectors like fossil fuels, excluded on ESG grounds, rally. He cited negative impacts from not holding oil during supply shocks, anticipating improved long-term fundamentals if global conflicts resolve. Carlsson believes AI-related tech sell-offs are overdone, seeing AI as an accelerator for economic productivity and a boost for Software-as-a-Service companies.
Ausbil maintains an overweight position in CSL, despite its 27 per cent year-to-date drop. Carlsson views CSL as a quality business with strong underlying demand and a leading plasma position. The appointment of veteran Gordon Naylor as CEO, tasked with strategic transformation, bolsters conviction, suggesting the current valuation is moderate. The firm recently exited toll road operator Transurban, citing rising interest rates detrimental to long-duration assets. This reallocation favoured Qantas, which Carlsson believes offers better relative value and cyclical transport exposure.
Carlsson highlighted Qantas as significantly undervalued, trading at an FY28 price-earnings ratio of approximately seven times, well below the market average. He suggests the market has over-priced sustained high oil prices, anticipating a substantial re-rate for Qantas as oil supply shocks subside. Ausbil also holds high conviction in Judo Bank, a smaller company praised for its strong link between staff engagement and customer satisfaction, contributing to profitable growth. Carlsson’s core philosophy links sustainable earnings growth to a company’s performance on key sustainability issues, arguing against models reliant on unethical practices.
