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13 Oct 2022 - Altor AltFi Income Fund - September 2022 Quarterly Webinar Update
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Webinar Registration: Altor AltFi Income Fund - Quarterly Webinar Update
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13 Oct 2022 - Sector Spotlight: Tabcorp
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Sector Spotlight: Tabcorp Airlie Funds Management July 2022 |
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Hear from Joe Wright as he provides a backdrop on Seven Group; a diversified investment business operating mining and industrials companies including WesTrac, Coates and Boral. Speaker: Will Granger, Equities Analyst Funds operated by this manager: Important Information: Units in the fund(s) referred to herein are issued by Magellan Asset Management Limited (ABN 31 120 593 946, AFS Licence No. 304 301) trading as Airlie Funds Management ('Airlie') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to an Airlie financial product or service may be obtained by calling +61 2 9235 4760 or by visiting www.airliefundsmanagement.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of an Airlie financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Airlie makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Airlie. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any third party trademarks contained herein are the property of their respective owners and Airlie claims no ownership in, nor any affiliation with, such trademarks. Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks.. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Airlie. |
12 Oct 2022 - Performance Report: Glenmore Australian Equities Fund
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | The Glenmore Australian Equities Fund has a track record of 5 years and 4 months and has outperformed the ASX 200 Total Return Index since inception in June 2017, providing investors with an annualised return of 20.49% compared with the index's return of 6.5% over the same period. On a calendar year basis, the fund hasn't experienced any negative annual returns in the 5 years and 4 months since its inception. Over the past 12 months, the fund's largest drawdown was -16.18% vs the index's -11.9%, and since inception in June 2017 the fund's largest drawdown was -36.91% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in October 2019 and lasted 1 year and 1 month, reaching its lowest point during March 2020. The fund had completely recovered its losses by November 2020. The Manager has delivered these returns with 7.59% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past five years and which currently sits at 0.91 since inception. The fund has provided positive monthly returns 90% of the time in rising markets and 36% of the time during periods of market decline, contributing to an up-capture ratio since inception of 249% and a down-capture ratio of 104%. |
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12 Oct 2022 - Performance Report: Bennelong Kardinia Absolute Return Fund
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| Fund Overview | There is a slight bias to large cap stocks on the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. |
| Manager Comments | The Bennelong Kardinia Absolute Return Fund has a track record of 16 years and 5 months and has outperformed the ASX 200 Total Return Index since inception in May 2006, providing investors with an annualised return of 7.72% compared with the index's return of 5.71% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 2 occasions in the 16 years and 5 months since its inception. Over the past 12 months, the fund's largest drawdown was -10.52% vs the index's -11.9%, and since inception in May 2006 the fund's largest drawdown was -11.71% vs the index's maximum drawdown over the same period of -47.19%. The fund's maximum drawdown began in June 2018 and lasted 2 years and 6 months, reaching its lowest point during December 2018. The fund had completely recovered its losses by December 2020. During this period, the index's maximum drawdown was -26.75%. The Manager has delivered these returns with 6.67% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.65 since inception. The fund has provided positive monthly returns 87% of the time in rising markets and 33% of the time during periods of market decline, contributing to an up-capture ratio since inception of 15% and a down-capture ratio of 53%. |
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12 Oct 2022 - Performance Report: 4D Global Infrastructure Fund (Unhedged)
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| Fund Overview | The fund is managed as a single portfolio including regulated utilities in gas, electricity and water, transport infrastructure such as airports, ports, road and rail, as well as communication assets such as the towers and satellite sectors. The portfolio is intended to have exposure to both developed and emerging market opportunities, with country risk assessed internally before any investment is considered. The maximum absolute position of an individual stock is 7% of the fund. |
| Manager Comments | The 4D Global Infrastructure Fund (Unhedged) has a track record of 6 years and 7 months and has underperformed the S&P Global Infrastructure TR (AUD) Index since inception in March 2016, providing investors with an annualised return of 7.52% compared with the index's return of 7.78% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 6 years and 7 months since its inception. Over the past 12 months, the fund's largest drawdown was -10.99% vs the index's -6.34%, and since inception in March 2016 the fund's largest drawdown was -19.77% vs the index's maximum drawdown over the same period of -24.67%. The fund's maximum drawdown began in February 2020 and lasted 2 years and 2 months, reaching its lowest point during September 2020. The fund had completely recovered its losses by April 2022. The Manager has delivered these returns with 0.27% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.58 since inception. The fund has provided positive monthly returns 94% of the time in rising markets and 13% of the time during periods of market decline, contributing to an up-capture ratio since inception of 97% and a down-capture ratio of 99%. |
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12 Oct 2022 - Which companies are posting strong and growing results?
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Which companies are posting strong and growing results? Insync Fund Managers September 2022 Well, we said things would be positive but volatile for a while yet and we weren't wrong. In this article, we provide examples of companies that we hold which are posting strong and growing results. Yet, their stock prices are slightly down as the world frets about big-picture issues that most of our companies aren't all that impacted by. The 'Lipstick Effect' is just one way they remain resilient, and we look at two holdings doing well from this. Our funds remain ahead of their stated 5-year objectives after fees, even with present shorter-term lows and volatility. The key to this is understanding how earnings eventually are reflected in stock prices and which companies do this well. Patience rewards. It was another volatile month for stock prices as markets focus more on the macroeconomic landscape. This sees most stocks being treated the same, no matter their specific financial circumstances. As markets are presently concerned with short term interest rate hikes, even quality companies posting great results (despite inflation and interest rate settings) are tarred with the same brush as those that are impacted. This is nothing out of the ordinary for this stage of the cycle. Whilst inflation has peaked and gradually heads down, markets are now trying to anticipate what impact higher interest rates will have on the global economy and corporate earnings. The benefit of investing in highly profitable companies with long runways of growth backed up by megatrends, comes the higher confidence around their longer-term earnings growth rates, irrespective of macroeconomic conditions! Whilst an economic slowdown may temporarily reduce the growth trajectories of high-quality compounders, their long-term growth rates tend to be more assured. Insync Megatrend Exposures 2022 August
The temptation to time being in or out right now is high, as is the cost. Bank of America found that investor returns in the S&P 500 would stand at just 28% today had they missed just the 10 best days of each 3,650 day decade since the 1930s - a dismal result. It's a whopping 17,715% had they held steady. Market gyrations are not insync with news cycles or with logic. This is why timing is risky. Buffet's metaphor stands... "In the short run, the market is a voting machine but in the long run, it is a weighing machine." Our funds are for long term investors, and this is why it's important to reflect on this. Companies can do well - even now Market sell-downs in periods of volatility often provide the best opportunities to invest for the long term.
There was plenty of bad macroeconomic news over this period to dissuade being invested too. A US debt ceiling crisis in 2011, European debt crisis in 2012, Greek default crisis in 2015, collapse in China' stock market in 2016, Covid-19 crisis in 2020...you get the picture. Home Depot also paid 10% p.a. compounding dividend (they expect to pay a $7.60 dividend in 2022). This means you are receiving well over HALF your original purchase price back in 2009 in dividends from just this year! Patience rewards. We remain confident in the strength and durability of earnings growth in the Insync portfolio companies and see temporary price falls as ideal buying opportunities. Two further examples of highly profitable companies in the portfolio are Lululemon and Ulta Beauty, both benefitting from the Lipstick Effect.
In their recent quarterly earnings updates Lululemon reported a 29% revenue increase and a 30% increase in EPS. Ulta Beauty reported a 17% increase in revenues and a 25% increase in EPS (earnings per share). When investors keep focused on the growing earnings power of quality companies, they find their stock prices grow eventually as well. This is especially true for the investor time periods the fund is designed for. Funds operated by this manager: Insync Global Capital Aware Fund, Insync Global Quality Equity Fund Disclaimer |
11 Oct 2022 - Decarbonise real estate or be left behind
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Decarbonise real estate or be left behind abrdn August 2022 Market sentiment on China has become especially fragile of late amid fears over near-term growth. However, We are in one of the most significant periods of change for real estate. Seismic shifts are taking place as we respond to climate change and decarbonise assets. It is clear the changes will be dramatic and they will be apparent well before some market participants currently assume. The conflict in Ukraine and the resulting higher costs for fossil fuels have sharpened the focus on decarbonisation. At this stage, adopting an agile response and taking steps to prepare for the effects of the transition to net zero are vital. This will allow investors to mitigate the impact on valuations, returns, investment activity, and the future investibility of their assets. The momentum is buildingThere is increasing pressure on asset managers to reduce the emissions from the assets they manage. Extreme global environmental changes combined with pressure from governments, investors, regulators, occupiers and employees are forcing change. With the built environment accounting for around 40% of global carbon emissions, the commercial real estate investment sector is in the spotlight. Real estate has a large part to play in limiting global warming to the 1.5 degrees threshold. While the target of net-zero emissions for buildings is necessary, how to get there is still not clear. Government policies at a global level lag well behind what is required. As a result, the gap has been filled with a proliferation of voluntary standards, such as the Better Building Partnership, the World Resources Institute, and the World Green Building Council. While these are well-intentioned, they are often contradictory. And in the absence of a common definition of what 'net-zero carbon' means, they can cause significant confusion. A clear trend is emerging where real estate assets with a higher sustainability specification can command a premium, while those that don't are vulnerable to a 'brown' discount. More sustainable assets are commanding a premiumA clear trend is emerging where real estate assets with a higher sustainability specification can command a premium, while those that don't are vulnerable to a 'brown' discount. Ramping up sustainability performance standards is certainly increasing obsolescence (no longer fit-for-purpose) in buildings. But measuring rental premiums, lower void periods and higher valuations for more sustainable assets is likely to remain challenging, given there is limited data and evidence on which to base assumptions. Regulatory confusion isn't helpingThe current reliance on Energy Performance Certificates (EPCs) across Europe illustrates some of the issues with the existing regulatory regime. EPCs can be helpful in providing information about a property's theoretical energy use, but they tell us nothing about the actual energy used in practice. The key European Union (EU) sustainable finance regulations rely heavily on EPCs. But how these concepts are implemented by each member state renders cross-border comparison nearly impossible. At present, the same building will be efficient or inefficient (under the Sustainable Finance Disclosure Regulations), or it will be sustainable or unsustainable (under the EU taxonomy classification of sustainable activities), based purely on the country in which the building is located. Estimating the future impact of decarbonisation on assets.What is the expected cost of decarbonising real estate? No one really knows. The heterogeneity of the asset class and the uncertainty associated with the recommended path to net zero make it difficult to quantify. Numerous factors will have a sizeable impact on the cost. For example, the age of the asset, plant and machinery; the complexity of the layout; the geographic location of the asset; or the costs of construction in the country concerned. Furthermore, the decarbonisation or otherwise of the electricity grid in a particular country where there is a high level of green energy (nuclear energy, for example) will reduce the overall decarbonisation costs. The degree of global warming in the country concerned will also affect the decarbonisation start and end points. Countries that are more susceptible to global warming will have a greater need to decarbonise quickly. So how do investors begin to put a cost on decarbonisation? Estimating a decarbonisation cost for the average asset in a particular sector, within a specific country, and taking account of the sustainability of the grid, gives a benchmark starting point. Investors can then collaborate with expert consultants, such as JLL, Verco, and Evora, to analyse assets on a bottom-up basis. This provides the key data that can be used to refine the broad averages. We take a multi-pronged approachThe key challenge at the moment is finding a consistent pathway to net zero. It needs to take account of different sectors, countries, future climate change, and the sustainability of energy sources in each country. The science-based energy emissions guidance from CRREM (Carbon Risk Real Estate Monitor) is our starting point. This is then combined with the extensive bottom-up data that we have collected from external analysis of our assets. We then take a view on the most appropriate numbers based on our country or sector views. We expect our guidance to evolve as we build up a more precise database of expected and actual costs. So what does this mean?Given the undeniable impact of global warming, along with the ever-tightening and more onerous sustainability regulations, the real estate industry is under pressure to change. Investors are becoming much more aware of the need to tackle excess emissions in their assets. We are at the early stages of investors pricing in the likely costs associated with 'good' and 'bad' sustainable assets. But given the level of scrutiny in this area of real estate, the pace of change is gathering significant momentum. Some investors will be left with assets that require too much capital investment to be viable. These assets may not attract tenants or they may not generate a cashflow in the future. Indeed, they may even become obsolete, where the only course of action will be to knock them down. We are taking significant steps now, to avoid such extreme measures in the future. Author: Simon Kinnie, Head Of Real Estate Forecasting and |
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Funds operated by this manager: Aberdeen Standard Actively Hedged International Equities Fund, Aberdeen Standard Asian Opportunities Fund, Aberdeen Standard Australian Small Companies Fund, Aberdeen Standard Emerging Opportunities Fund, Aberdeen Standard Ex-20 Australian Equities Fund (Class A), Aberdeen Standard Focused Sustainable Australian Equity Fund, Aberdeen Standard Fully Hedged International Equities Fund, Aberdeen Standard Global Absolute Return Strategies Fund, Aberdeen Standard Global Corporate Bond Fund, Aberdeen Standard International Equity Fund , Aberdeen Standard Life Absolute Return Global Bond Strategies Fund, Aberdeen Standard Multi Asset Real Return Fund, Aberdeen Standard Multi-Asset Income Fund
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10 Oct 2022 - Performance Report: ASCF High Yield Fund
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| Fund Overview | Does not require full valuations on loans <65% LVR. Borrowing rates are from 12% per annum on 1st mortgage loans and 16% per annum on 2nd mortgage/caveat loans. Pays investors between 5.55% - 6.25% per annum depending on their investment term. |
| Manager Comments | The ASCF High Yield Fund has a track record of 5 years and 7 months and has outperformed the Bloomberg AusBond Composite 0+ Yr Index since inception in March 2017, providing investors with an annualised return of 8.5% compared with the index's return of 0.92% over the same period. On a calendar year basis, the fund hasn't experienced any negative annual returns in the 5 years and 7 months since its inception. Over the past 12 months, the fund hasn't had any negative monthly returns and therefore hasn't experienced a drawdown. Over the same period, the index's largest drawdown was -10.05%. Since inception in March 2017, the fund's largest drawdown was 0% vs the index's maximum drawdown over the same period of -12.97%. The Manager has delivered these returns with 4.08% less volatility than the index, contributing to a Sharpe ratio which has consistently remained above 1 over the past five years and which currently sits at 20.1 since inception. The fund has provided positive monthly returns 100% of the time in rising markets and 100% of the time during periods of market decline, contributing to an up-capture ratio since inception of 79% and a down-capture ratio of -74%. |
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10 Oct 2022 - Inflation will test Fed's patience, but RBA has cards up its sleeve
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Inflation will test Fed's patience, but RBA has cards up its sleeve Pendal September 2022 |
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ALONG with many other observers, we expected US inflation to moderate more than it did in August. Headline CPI came in overnight at 0.1% (8.3% annual) and underlying at 0.6% (6.3% annual). A new group of unrelated components (including vehicle repair, dental charges and tobacco) showed fresh signs of inflation, pushing the rate positive for the month. We still expect goods deflation in the months ahead. Oil prices and most other commodities are weak. But US wage growth is spreading inflation wider into services. Services inflation is now the battleground and labour supply lines are normalising far slower than goods. What little patience the US Federal Reserve may have had is running out. Fed funds now seem destined for 4% or higher. As little as six weeks ago the market was expecting terminal rates closer to 3%. RBA may be more patientAs always, Australian bonds will follow the US. But the RBA seems prepared to show a bit more patience. This is due to a number of factors — but the two main ones are wages and our floating rate mortgage market. The NAB business survey showed that rate hikes are yet to have any impact. This is not surprising as the economy is now almost fully open, many have pent-up savings to spend and fixed rates are protecting 40 per cent of mortgage holders. The RBA remain on course for 3% cash rates by year end (either 2.85% or 3.1%). It will likely rely on the fixed rate mortgage cliff and immigration to do the heavy lifting to combat inflation in 2023. Bond markets are caught in the loop of pushing rates up with the Fed but also with one eye on increasing recession risks. Flatter curves seems to be the favoured way of reconciling these two outcomes. Credit and equity markets were hit by the high inflation numbers, but for now look to be range-trading rather than breaking down. The only certainty for now is volatility is here for a while yet. Author: Tim Hext, Portfolio Manager and Head of Government Bond Strategies |
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Funds operated by this manager: Pendal Focus Australian Share Fund, Pendal Global Select Fund - Class R, Pendal Horizon Sustainable Australian Share Fund, Pendal MicroCap Opportunities Fund, Pendal Sustainable Australian Fixed Interest Fund - Class R, Regnan Global Equity Impact Solutions Fund - Class R, Regnan Credit Impact Trust Fund |
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This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at December 8, 2021. PFSL is the responsible entity and issuer of units in the Pendal Multi-Asset Target Return Fund (Fund) ARSN: 623 987 968. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient's personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com |
7 Oct 2022 - Hedge Clippings |07 October 2022
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Hedge Clippings | Friday, 07 October 2022 For the past 60 years Bob Dylan, arguably the greatest musical influence of our time, has delivered classical and songs, and with memorable lines. None more so than one from one of his earlier works, Subterranean Homesick Blues, which included the line "You don't need a weather man to know which way the wind blows." Admittedly, much, if not all, of the rest of the song's meaning, remains a mystery to most, us included, but (with apologies for the YouTube ad) the video clip was also an early classic. The RBA's media release following their monthly meeting is a master of understatement, but often it is the last sentence which tells which way the wind is really blowing. In March 2020 the RBA dropped its cash rate target to an unprecedented 0.25% with the following comment: "The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2-3 per cent target band." It's worth noting that back then the objective was to create some inflation... In November of the same year, the RBA eased further to an even more unprecedented rate of 0.10% with the comment: "Given the outlook, the Board is not expecting to increase the cash rate for at least three years... and is prepared to do more if necessary." Oops! Where was the weatherman that time? To be fair to the accelerator/brake analogy, history shows that the cash rate stuck at 1.5% from August 2016 to May 2019, before it declined again through to November 2020 to bottom, and stay at 0.10%. That was until May this year, when it rose by 0.25%, followed by four consecutive increases of 0.5%, and then this week's increase of 0.25%, taking the cash rate to 2.6%. Tuesday's RBA media release finished with this: "The Board remains resolute in its determination to return inflation to target, and will do what is necessary to achieve that." It goes without saying that the board's intention is to now reduce inflation to 2-3%, which they expect to achieve (just) in 2024. Part of where we're going with this is not to say the RBA's job is easy, but that the resultant effect of easing or tightening are pretty inevitable (if not immediate) on the economy, and particularly housing prices. To repeat or borrow Dylan's words, when it comes to property prices, "you don't need a weatherman to know which way the wind blows". It stands to reason - actually supply and demand - that a prolonged period of easy money, especially with little or low unemployment - will result in an increase in property prices. Equally, the lower the interest rate, and the longer it lasts for - or in the RBA's case their November 2020 expectation for "at least three years" - the stronger will be the increase. While money was easy and housing prices were rocketing, the RBA and media were concerned about housing affordability. Now, with interest rates and repayments rising, and property prices falling, there are dire warnings of mortgage stress and the potential for foreclosure. So which way is the wind blowing at the moment? This week's rise of only 0.25% against the expectations of 0.50%, although unlikely to be the last in this cycle, did signal a significant shift in the RBA's thinking that this time the peak cash rate should be no more than 3.25%. That of course assumes that inflation declines. And sometimes that weatherman is not so predictable. Europe Trip Insights | 4D Infrastructure Why on earth would Experiences thrive with all the gloom around today? | Insync Fund Managers McDonalds Story | Magellan Asset Management |
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September 2022 Performance News |
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