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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio of typically 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
| Manager Comments | In September the Fund returned -1.03% after fees and protection. Top contributors included Boston Scientific, Stryker Corp, Visa and Twenty-First Century Fox. The main negative contributors were Heineken, S&P Global, PayPal and Facebook. The Fund continues to have no foreign currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Insync continues to utilise 'out of the money' index put options to buffer sharp falls in equity markets for the protected option of the fund. Insync noted they maintain a positive outlook on their stock holdings. They believe the Fund's holdings will continue to benefit from global 'Megatrends' despite trade wars and rate rises. Insync's valuation approach, which seeks to capture the long-term growth of these companies, continues to show a valuation discount. Should markets continue to perform well, the portfolio of stocks will participate in the rally. However, more importantly, if the market suffers a significant correction then the Fund has a downside strategy in place. |
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