Spotlight on Charlie Hill, Senior Portfolio Manager - Global Equities, Mondrian Investment Partners
Global Thought Leader Spotlight
Charlie Hill, Senior Portfolio Manager - Global Equities, Mondrian Investment Partners
In my role as a Senior Portfolio Manager in the Global Equities team at Mondrian Investment Partners, I help in managing A$9bn in Global Equity portfolios. From a research perspective, I have sector specialisations in Industrials/Materials and Consumers. Mondrian is a A$75bn value-oriented, defensive, global investment manager with offices in London, Singapore and Philadelphia.
We carry out in-depth, fundamental, bottom-up research and rigorous dividend discount analysis to identify the most attractive risk-adjusted opportunities on a global basis. We build concentrated value-oriented, resilient portfolios to capitalise on those opportunities. We take a long-term approach in our; forecast horizon, our typical holding period (3-5 years), and the management of the firm (we are 100% employee owned).
Our approach has produced meaningful alpha over a 30+ year period, whilst preserving capital during protracted market declines.
Key themes driving risks and opportunities in equities
The lofty valuations in parts of the US equity market look unsustainable relative to other developed markets. Although the US underperformed global markets in the first half of this year, this was from a historically wide differential in valuations at the beginning of 2025. This poses risks for the overall market as the US is such a large component of the index.
A significant part of the high valuations in the US is driven by tech and other ‘Growth’ areas, particularly those linked to artificial intelligence (AI). Whilst AI clearly presents significant opportunities for some companies, the longer-term impact remains unclear, and the massive investments we are seeing from some companies are not guaranteed to pay off.
While tariff rates have been temporarily reduced as the US administration negotiates deals with its trade partners, the current effective rate remains materially higher than where we began the year, representing a drag on the US economy. Meanwhile, real long-term government bond yields have been on the rise, with the yield on 30-year US bonds pushing past 5% in the second quarter. The passage of the President’s Big Beautiful Bill through Congress will only add to the debt load, already more than 6% of GDP, largely through tax cuts.
Conversely, we believe significant opportunities reside in Japanese, European and defensive oriented equities, where valuations are far more reasonable, corporate balance sheets are managed more conservatively, and growth rates appear to be holding up better in contrast to the potential for rolling over in the US. Japan has the added advantage of corporate governance improvements, and the associated increases in shareholder returns.
Implications for sophisticated investors
The extreme bifurcation in valuations suggests investors should pursue investment opportunities outside the US while remaining selective within the US market. Our in-depth bottom-up fundamental analysis identifies plenty of attractive opportunities on a risk-adjusted basis in Japan and several European countries, including France and the UK. Meanwhile the equity market recovery suggests a complacency around rising tariffs, global instability and increasing debt levels. Therefore, we are seeing more opportunities in defensive sectors.
Whilst a significant part of the portfolio does remain in US names, it is increasingly important to be wary of those names that are ‘priced for perfection’ and for which a disappointment in earnings could lead to significant underperformance. Meanwhile, IT is the largest sector underweight given valuations in many names there, especially those linked to AI. Our investments in the space are restricted to those where there is a clear path to monetisation of the AI opportunity, and where valuations remain compelling.
Increased concentration and the outperformance of growth equities has been a headwind for value investors like Mondrian in recent years. However, it has increased the relative attractiveness of the opportunity set for defensive, value-oriented portfolios going forward. Increasing concentration also makes passive investing a riskier proposition today than it has been in the past, because it entails placing large bets on a small number of companies with significant business overlaps.
Charlie will be presenting at Global Investment Institute’s upcoming Equities Investment Forum, taking place on Wednesday, 10 September 2025 at the Grand Hyatt Melbourne, Victoria. To register your interest in attending, click here or for more information email zlatan@globalii.com.au.
Charlie Hill, Senior Portfolio Manager, Global Equities, Mondrian Investment Partners
Charlie joined Mondrian’s Global Equity team in 2016 and is a member of the Global Equity Strategy Committee. His research focus area is primarily the USA, as well as sector specialisations in Industrials/Materials and Consumers. Previously, Charlie worked at Deloitte, where he qualified as a Chartered Accountant. He also spent time as a Fund Manager at Neptune Investment Management.
Charlie holds a BA (Honours) degree in Classics from the University of Oxford. He is a CFA Charterholder and is a member of the CFA Institute and the Institute of Chartered Accountants of England and Wales.
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