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| Latest Return | |
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| Fund Overview | The overriding objective of the Concentrated Australian Equities Fund is to seek investment opportunities which are under-appreciated and have the potential to deliver positive earnings, while satisfying our stringent quality criteria. Bennelong's investment process combines bottom-up fundamental analysis together with proprietary investment tools which are used to build and maintain high quality portfolios that are risk aware. The portfolio typically consists of 20-35 high-conviction stocks from the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to ASX-listed securities. Derivative instruments are mainly used to replicate underlying positions and hedge market and company specific risks. |
| Manager Comments | The Fund's outperformance over the quarter benefited from strong returns from Reliance Worldwide, Flight Centre and Costa Group. Bennelong believe the market is underestimating the quality of Reliance Worldwide and Flight Centre, two of the most heavily shorted stocks on the ASX. The largest detractors were Domino's Pizza Enterprises and Aristocrat Leisure, as well as the Fund's underweight exposure to the strong performing Resources sector. Bennelong believe the market underestimates the longer-term growth prospects of Domino's Pizza Enterprises, they also foresee stronger than expected earnings growth and a lower PE multiple for Aristocrat Leisure. Bennelong identify a rise in interest rates as a major risk to the Australian stock market, their view is that rates may lift, but not dramatically. Their belief is that higher rates will be attributable to higher inflation, which is likely to result from factors relating to innovation, demographics and under-employment. |
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