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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 | The Fund returned -0.89% after fees and downside protection in October. Positive contributors included Apple, Bristol-Myer Squibb, Facebook, Rightmove PLC and Nvidia Corp. Detractors were Heineken, Estee Lauder, Constellation Brands, Accenture and Intuit. The Fund continues to have no currency hedging as Insync consider to main risks to the Australian dollar to be on the downside. Insync noted there continued to be a shift from quality growth companies to wards cyclical companies during the month, led by optimism around some form of partial trade deal. Whilst central banks globally now have an accommodative monetary policy, Insync continue to hold the view that the global economic backdrop remains challenging, with low growth and low inflation a major headwind for businesses that are reliant on a strong economy to drive their earnings. They believe the current environment continues to favour secular growth businesses with high levels of profitability. |
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