Both sectors had limited exposure to the Australian economy but benefited from weakness in the Australian dollar, he said.
His pick for technology stocks was payments company Zip, which at $550 million was valued at just over one-tenth of its $5 billion rival Afterpay.
“In our minds, [Zip] is only 12 months behind,” he said.
For the mining sector, Mr King highlighted Jupiter Mines (manganese), Coronado Global Resources (coal), and Stanmore Coal.
He said coal prices were holding at attractive levels, and he was encouraged by the sector’s shift in focus from “capital management rather than empire-building [through expanding supply]”.
Antipodes’ deputy portfolio manager Graham Hay, whose fund manages 10 per cent of the global FGG portfolio, doubled down on the endorsement of tech and tech-adjacent industrial stocks.
His small cap pick was Dutch semiconductor equipment producer ASM International, whose niche position in the wafer-processing stage of chip making made them a “natural target” for acquisition.
Mr Hay harkened back to the seemingly distant past for his large cap pick: Cisco Systems.
Cisco was “one of the best-run companies in technology” but its “laggard stock” had been valued at 13 times its cash flow, short of the 20-fold multiple commanded by popular technology companies, he said.
The stock and sector picks will guide fund managers’ movements in coming months, as local investors approach equities with renewed confidence.
The US Federal Reserve’s decision to pause interest rate hikes, confirmed overnight by chairman Jerome Powell, raised concerns about the global economy but neutralised market-watchers’ nerves over quantitative tightening.
Mr King said a record-high difference in earning yields between bond and equity markets made him bullish on the relative valuation of shares.
“Fortunately we kept our nerve when the market sold off in December,” he said, citing a 40 per cent uptick in Regal’s aggressive portfolio and 18 per cent growth in its long short fund since the beginning of 2019.
In a reflection of the relative weakness of the Australian Securities Exchange, the local FGX portfolio was down 3.8 per cent, while the global FGG fund grew 6.4 per cent in the year ending December 2018.
‘Apples and oranges’
FGX missed the benchmark by 0.3 per cent; FGG beat its benchmark by 5.9 per cent.
Future Generation chief executive Louise Walsh said measuring the funds against each other was like “comparing apples and oranges”.
Whereas the global fund aimed at overall capital growth, its local counterpart focused on maintaining a stream of fully-franked dividends, she said.
Ms Walsh said Future Generation was focused on protecting the investments of self-managed super funds and high net worth families and charities, who made up the bulk of its shareholders.
“These funds are designed to get through very volatile markets. And that’s what they’re doing at the moment. It’s a tough market out there,” she said.
