Key Highlights

  • Perennial Better Future Active ETF (ASX:IMPQ) provides exposure to Australian and New Zealand small and mid-cap companies through an actively managed approach.
  • The fund invests across multiple sectors including healthcare, financial services, technology, communication services, and infrastructure-related businesses.
  • IMPQ focuses on identifying companies positioned for long-term growth opportunities while applying active portfolio management.
  • The ETF provides access to a diversified portfolio of businesses beyond traditional large-cap Australian equities.

Perennial Better Future Active ETF (ASX:IMPQ) is an actively managed exchange-traded fund focused on small and mid-sized companies in Australia and New Zealand. The fund aims to provide exposure to businesses with potential long-term growth opportunities through a selective investment approach.

The ETF was admitted to the Australian Securities Exchange in May 2019 and operates within the Australian mid and small-cap equity category. Unlike passive funds that simply replicate an index, IMPQ uses active management to select companies based on investment analysis and portfolio objectives.

The fund may invest in companies outside the benchmark index and has the flexibility to participate in Australian initial public offerings. This approach allows the portfolio managers to identify opportunities across a broader range of listed businesses.

Investment Strategy and Active Management Approach

IMPQ follows an active investment strategy focused on identifying companies with characteristics that may support long-term business development. The fund managers assess companies based on factors such as business models, market position, growth potential, and operational performance.

The portfolio can typically include between 25 and 70 stocks, allowing the fund to maintain diversification while concentrating on selected investment opportunities.

The active structure enables the fund to adjust its holdings based on changing market conditions and company-specific developments rather than maintaining fixed exposure to index constituents.

Australian Small and Mid-Cap Market Exposure

Small and mid-cap companies represent an important segment of the Australian equity market, often including businesses operating in developing industries or expanding market segments.

Compared with larger established companies, smaller businesses may have different growth profiles and operate across a wide range of sectors. These companies can include emerging technology providers, healthcare businesses, financial services firms, and specialised industrial companies.

IMPQ provides exposure to this segment by investing primarily in Australian companies while also including businesses from New Zealand and the United States.

Portfolio Composition and Sector Exposure

The fund invests across multiple sectors, creating exposure beyond a single industry theme. Healthcare represents a significant part of the portfolio, alongside financial services, technology, communication services, basic materials, real estate, utilities, and industrial companies.

This diversified sector approach reflects the variety of opportunities available within the Australian small and mid-cap market.

Healthcare exposure includes companies involved in medical technology and healthcare services, while technology holdings provide access to businesses participating in digital transformation. Financial services exposure includes companies operating in specialised financial markets and related services.

Geographic Exposure

IMPQ primarily invests in companies listed in Australia, with additional exposure to New Zealand and the United States.

Australian companies form the majority of the portfolio, reflecting the fund’s focus on domestic small and mid-cap opportunities. New Zealand exposure provides access to additional regional businesses, while limited international exposure allows the fund to participate in selected overseas opportunities.

The geographic structure provides investors with exposure to companies operating across developed markets while maintaining an Australian market focus.

Major Holdings and Business Exposure

The ETF includes companies from a range of industries, with major holdings including Meridian Energy, nib Holdings, Smartgroup Corporation, Chorus, Sims Limited, PEXA Group, Charter Hall Group, Telix Pharmaceuticals, Polynovo, and AUB Group.

These businesses operate across different sectors, including renewable energy, healthcare services, technology platforms, property management, telecommunications infrastructure, and specialist services.

The diversity of holdings reflects the fund’s approach of selecting companies from different parts of the economy rather than concentrating on one specific sector.

Role of Active ETFs in Investment Markets

Active ETFs provide investors with access to professional portfolio management through a listed investment structure. Unlike traditional index ETFs, active ETFs allow managers to make decisions about company selection, portfolio allocation, and investment positioning.

For investors seeking exposure to smaller companies, active management can provide a framework for assessing businesses that may have less coverage compared with larger listed companies.

The performance characteristics of active ETFs are influenced by factors including portfolio construction, company selection, market conditions, and broader economic trends.

Fund Structure and Management

Perennial Better Future Active ETF operates with a management fee of 0.98% and provides exposure to a portfolio of Australian and New Zealand companies through an ASX-listed structure.

The fund is authorised to hold up to 10% in cash and may participate in initial public offerings where opportunities align with its investment approach.

Conclusion

Perennial Better Future Active ETF (ASX:IMPQ) provides exposure to a diversified group of Australian and New Zealand small and mid-cap companies through an active investment strategy. By investing across sectors such as healthcare, technology, financial services, and infrastructure-related businesses, the ETF reflects the broader opportunities available outside large-cap Australian equities. The fund’s approach focuses on identifying businesses with long-term growth potential while maintaining portfolio diversification across multiple industries.