Investors Mutual founder Simon Conn talks Trump and markets as he get sets to retire
Simon Conn is leaving Investors Mutual after 27 years. This is what he thinks about Trump, markets and government spending.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
When Simon Conn walked through the doors of Investors Mutual in 1998, the set up was simple: a couple of guys with computers and a little bit of money.
A founding member of the investment team, Mr Conn sat alongside renowned stockpicker Anton Tagliaferro as the business became one of Australia’s best-known value investors, with Mr Tagliaferro looking after the flagship Australian Share Fund and Mr Conn the Smaller Companies Fund.
After 27 years – and three years since Mr Tagliaferro departed the business — the 56-year-old says now is the time to move on.
“It’s a long time to be running money, particularly in the small and mid-cap sector,” Mr Conn told The Australian.
“It’s a pretty gruelling job. So I just feel it’s time to step back and reassess, have a really good break and then work out what to do next.
“Our performance recently has been really good. You never want to step away when things aren’t looking so great. But we’ve had a couple of good years.”
The smaller companies fund returned 22.3 per cent over the 12 months to January 31, nearly double the benchmark’s 13 per cent. It has outperformed over the long term too, delivering annual average returns of 12.8 per cent since inception (1998) compared to the benchmark’s 6 per cent.
After a stellar 2024, Mr Conn leaves right as geopolitical tensions start to ripple through markets, with investors trying to get a handle on US President Donald Trump, the impact of trade tariffs, and escalating tensions between the US and Ukraine. “I don’t know where it all ends – the world has never seen anyone like Trump before, and it’s very hard to predict what will happen. But the technology thematic has been so overbought and so strong it’s prone to some sort of correction,” Mr Conn said.
The Magnificent 7 – US tech giants Microsoft, Amazon, Meta, Apple, Alphabet, Nvidia and Tesla – propelled US markets higher in 2024 but have come under pressure in recent weeks as part of a broader sell-off that has seen the tech-heavy Nasdaq enter correction territory.
As Mr Trump shakes up markets and works to shrink the welfare state, Mr Conn worries Australia’s federal government has its own spending problem.
“We’ve become quite a socialist country in some regards, in that the government continues to think they can keep growing the economy just by spending and employing people but ultimately you need the private sector to be able to compete,” he said.
“At some point we need some fiscal rectitude. The trouble at the moment is resources prices and increased immigration have boosted the budget, but I’m not sure how sustainable that is.
“That makes us vulnerable to any sort of global correction, particularly a slowdown in China or a global trade war, which we’re seeing,” Mr Conn said.
“ I think we’re quite vulnerable to shocks.”
The upcoming federal election, which will be held by May 17 at the latest, will be key for markets and provides a chance for the government to take a step back from spending, in turn giving the private sector more room to grow, he said.
“The election will be very important. And I think we need to start addressing some of the implicit cost issues in the economy; labour costs, energy costs and regulation, which have added an extra burden to a lot of management teams.
“I think the government needs to step back. The government’s become a big part of the economy, and it’s really competing (with the private sector) for people.
“But you need the best people in productive industries. Paying a premium and stealing labour from (the private sector), particularly in regional areas, is a real headwind for companies.”
The prospect of a hung parliament is a risk for markets but the bigger issue is the challenge it will pose for policymaking. “(A hung parliament) will mean that a strong policy development won’t happen, which is a tragedy.”
Mr Conn will retire from Investors Mutual at the end of June.
Originally published as Investors Mutual founder Simon Conn talks Trump and markets as he get sets to retire
Qld government under pressure to approve Queens Wharf sale
The Queensland government is expected to green light Star Entertainment’s sale of its stake in the $3.9bn Queen’s Wharf casino precinct to its Hong Kong partners.
Harvey takes 6.7pc stake in PNG play
Mayur Resources is looking to soon break ground on a project in Papua New Guinea, after raising $100m in an expanded capital raising which brought on high-profile investors.