September, 2023
The Fund posted a negative return and underperformed its benchmark over the September quarter, mainly due to the impact of gearing. Of the Fund's three underlying managers, DNR Capital gained ground, with DNR Capital and Macquarie outperforming the benchmark whilst Vinva performed in line.
Sector allocation marginally detracted from relative returns, however this was outweighed by stock selection which added value overall. Regarding sector allocation, an underweight exposure to financials detracted most, whereas an overweight position in consumer discretionary was the main contributor. Stock selection was strongest in materials and industrials, however IT positions were the main drag on returns.
The largest individual contributor to relative returns was an overweight position in online auto classifieds company carsales.com (+19%), which was buoyed after reporting robust full year results, with the company's US business exceeding market expectations on the back of margin expansion as it grew its customer base and demonstrated pricing power. Other major contributors included the overweight holding in Domino's Pizza Enterprises (+15%) and an underweight exposure to tollroad operator Transurban Group (-11%).
The largest individual detractor from relative returns was an overweight holding in financial services software company IRESS (-43%), which fell heavily after releasing full year results that saw large downgrades to forward earnings expectations, as the group continues to reset its business and sell off non-core assets. Other major detractors included the underweight exposures in conglomerate Wesfarmers (+9%) and banking giant Commonwealth Bank Australia (+2%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-9.pdfDecember, 2022
The Fund posted a positive return and comfortably outperformed its benchmark over the December quarter, driven by gearing. The Fund's three underlying managers gained ground, with DNR Capital outperforming the benchmark whilst Macquarie and Vinva lagged on a relative basis.
Sector allocation detracted from relative returns, outweighing the value added by stock selection. Regarding sector allocation, the main detractors were underweight exposures to materials and utilities while an underweight exposure to consumer staples added most to performance. Regarding stock selection, the Fund's positions in industrials and consumer discretionary contributed the most, while real estate was the main sector that held back performance.
The largest individual contributor to relative returns was an overweight position in Domino's Pizza (+29%), which rebounded after company management provided updates to the market after their AGM (in the previous quarter). The company highlighted efforts to continue to manage ongoing pressures in Europe in the higher inflationary environment. Other major contributors included the underweight exposure to retailer Woolworths (-1%) and an overweight position in testing and analysis company ALS Ltd (+23%).
The largest individual detractor was an overweight position in property developer Lend Lease (-12%), which suffered after announcing weaker than expected guidance for its outlook for the current fiscal year. Other major detractors included the underweight exposures to Commonwealth Bank (+13%) and Westpac Banking Corp (+16%), which were buoyed earlier in the period by higher interest rates which will feed through to better margins in the short term.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-8.pdfSeptember, 2022
The Fund posted a negative return and underperformed its benchmark over the September quarter. Amid considerable market volatility, two of the Fund's three underlying managers gained ground, with Macquarie outperforming the benchmark. Vinva slightly underperformed, with DNR Capital lagging on a relative basis. The Fund's gearing also detracted. DNR Capital continues to drive the Fund's strong performance compared to the benchmark over the long term, including over 2, 3, 5 years and since inception (all returns before fees).
Stock selection detracted from relative returns, outweighing the value added by sector allocation. Regarding sector allocation, the main contributors were an underweight exposure to utilities and an overweight position in energy. The main detractor was an underweight exposure to materials. Regarding stock selection, the Fund's positions in financials and consumer discretionary detracted the most, while industrials added most value by sector. The largest individual contributors to relative returns were underweight positions in toll-road operator Transurban Group (-14%) and hospital and health care group Ramsay Health Care (-21%) and an overweight position in coal, oil and gas operator New Hope Corporation (+82%). Transurban underperformed as 'bond proxy' stocks amid surging bond yields in the latter half of the period. Ramsay Health Care shares suffered after the KKR -led takeover consortium confirmed it would not improve its previous offer, throwing the potential deal into doubt. New Hope soared after Prime Minister Albanese confirmed Australia as an ongoing supplier of gas and coal, which is supported by the global energy crisis.
The largest individual detractors from relative returns were overweight positions in Domino's Pizza (-23%) and financials services and tech provider IRESS (-21%), as well as being underweight lithium and tantalite miner Pilbara Minerals (+99%). Domino's fell amid concerns over its European earnings with inflation and a general deterioration in economic conditions weighed.
IRESS saw a downgrade on the back of a CEO change, with higher $US-based costs and slowing Australian sales also impacted. Pilbara Minerals rode the wave with other lithium producers as global demand was unabated.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-7.pdfJune, 2022
The Fund posted a negative return and underperformed its benchmark over the June quarter. The Fund's gearing detracted and was the driver of the Fund's underperformance. Amid considerable market weakness, all of the Fund's three underlying managers lost ground, although DNR Capital was the standout performer on a relative basis as it significantly outperformed the benchmark during the period. The Fund continues to perform strongly compared to the benchmark over the long term, including over 2, 3, 5 years and since inception (all returns before fees).
Stock selection was the primary contributor to relative returns, with sector allocation also adding value. Regarding sector allocation, the main contributors were an underweight exposure to materials and an overweight position in energy. The main detractors were underweight exposures to utilities and health care. The Fund's cash position also enhanced returns as the market fell. Regarding stock selection, the standout positive contributors were positions in information technology, consumer discretionary and financials stocks, while industrials detracted most by sector.
The largest individual contributors to relative returns were overweight positions in QBE Insurance and Computershare, and an underweight exposure to Block. QBE Insurance (+6%) benefitted from higher bond rates which will provide a boost to earnings, with the company also buoyed by offshore competitors announcing solid results. Share registry operator Computershare (0%) was resilient, as higher interest rates should flow to significantly higher profits. Fintech company Block (-51%) – formerly Square - suffered alongside the broader global IT sector as rising bond yields are seen to dampen higher growth companies with limited profitability.
The largest individual detractors from relative returns were underweight positions in Transurban Group and Ramsay Health Care and an overweight position in Seek. Toll-road operator Transurban Group (+8%) rose as the market recognised the company's substantial protection from rising inflation through contracted tolling agreements. Fund Performance inflation through contracted tolling agreements. Online employment company Seek (-30%) fell despite record job ad volumes, as investors favoured defensive exposures. Hospital and health care group Ramsay Health Care (+12%) rallied following a takeover bid from KKR.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-6.pdfMarch, 2022
The Fund posted a positive return and significantly outperformed its benchmark over the March quarter. The Fund's gearing contributed to the outperformance. All of the Fund's three underlying managers gained ground, with DNR Capital the standout performer, whilst Vinva also outperformed the benchmark during the period. The Fund continues to significantly outperform over the long term, including over 1, 2, 3, 5 years and since inception (all returns before fees). Stock selection drove relative returns, whereas sector allocation detracted somewhat.
Regarding sector allocation, the main detractors were an underweight exposure to materials and an overweight position in communication services. The main contributors were an underweight exposure to health care and an overweight exposure to energy. Regarding stock selection, the standout positive contributors were positions in information technology and materials stocks, while there were no material detractors by sector.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-5.pdfDecember, 2021
The Fund posted a positive return and outperformed its benchmark over the December quarter. The Fund's gearing contributed to the outperformance. With Vinva the strongest performing underlying manager outperforming the benchmark, all of the Fund's three underlying managers posted positive returns during the period. The Fund continues to significantly outperform over the long term, including over 1, 2, 3, 5 years and since inception (all returns before fees). Stock selection contributed positively to relative returns, whereas sector allocation detracted. Regarding sector allocation, the main detractors were an underweight exposure to utilities and an overweight position in energy. The main contributors were an underweight exposure to financials and an overweight exposure to communication services.
Regarding stock selection, the standout positive contributors were positions in financials and information technology stocks, while the main detractors were positions in materials, consumer discretionary and industrials stocks
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-4.pdfJune, 2021
The Fund posted a strong positive return, but slightly underperformed its benchmark over the June quarter. All four of the Fund's underlying managers posted strong positive returns and Elly Griffiths, Perennial and Spheria outperformed the benchmark. The Fund continues to significantly outperform its benchmark over the longer term, including over 1, 2, 3 and 5 years, and since inception. (All returns are before fees.) Stock selection was the driver of the outperformance, while sector allocation detracted from relative returns.
Regarding sector allocation, the main detractors from relative returns were an overweight exposure to industrials and underweight exposures to financials and materials. The cash holding also detracted from relative returns as the market rallied. The main contributor was an underweight exposure to consumer staples. Regarding stock selection, the main contributors to relative returns were positions in industrials, consumer discretionary, information technology and real estate stocks, while the main detractors were positions in health care and energy stocks
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-3.pdfMarch, 2021
The Fund posted a strong positive return and outperformed its benchmark over the March quarter (before fees). The Fund's gearing increased the magnitude of the outperformance. All of the Fund's three underlying managers posted strong positive absolute returns and outperformed the benchmark. The Fund continues to outperform over the long term including over 1, 2, 3, 5 years and since inception.
Stock selection was the key driver of the Fund's outperformance and sector allocation also contributed positively. Regarding sector allocation, the main contributors to relative returns were an underweight exposure to health care, and overweight exposure to communication services and consumer discretionary. Meanwhile, the main detractors from relative returns were an underweight exposure to financials and a cash holding as the share market rallied.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-2.pdfDecember, 2020
The Fund posted a strong positive absolute return and outperformed its benchmark over the December quarter (before fees). The Fund's gearing increased the magnitude of the outperformance. All of the Fund's three underlying managers posted positive absolute returns, and DNR and Vinva outperformed the benchmark. The Fund continues to outperform over the long term including over 2, 3, 5 years and since inception. Stock selection was the key driver of the Fund's outperformance, while sector allocation modestly detracted from relative returns. Regarding sector allocation, the main detractors from relative returns were an underweight exposure to financials and a cash holding as the share market rallied.
Meanwhile, the main contributors to relative returns were underweight exposures to health care and utilities, and an overweight exposure to information technology.
Regarding stock selection, the main contributors to relative returns were positions in communication services, financials, materials, real estate and industrials, while the main detractors were positions in information technology.
The largest positive contributors to relative returns were an underweight position in CSL, and overweight positions in REA Group and Virgin Money UK. Global biotechnology company CSL waned (-1.3%) after announcing it would abandon the next phase of trials for its COVID-19 vaccine, which was being developed by the University of Queensland. Meanwhile, global online real estate advertising company REA Group rose to record highs (+35.4%) after reporting better-than-expected first quarter results and financial services provider Virgin Money UK shot higher (+83.0%) mainly due to optimism around the availability of vaccines. The largest individual detractors from relative returns were underweight positions Commonwealth Bank, Afterpay and ANZ Banking Group.
Commonwealth Bank rallied (+29.1%) after reporting solid first quarter results, with its home loan growth rate twice as high as the wider banking system. 'Buy now, pay later' financial company Afterpay rose to rAfterpay rose to record highs (+47.5%) after reporting very strong first quarter results and ANZ Banking Group gained (+34.2%) after reporting soft, but better-than expected first quarter results.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a-1.pdfSeptember, 2020
The Fund posted a negative absolute return and underperformed its benchmark over the September quarter (before fees). The Fund's gearing led to this underperformance. One of the Fund's three underlying managers, Vinva, posted a positive absolute return and outperformed the benchmark. The other two, AMP Capital and DNR Capital, posted negative absolute returns and slightly underperformed the benchmark.
Sector allocation contributed positively to relative performance, while stock selection detracted. Regarding sector allocation, the main contributors to relative returns were an underweight exposure to financials and overweight exposures to consumer discretionary and information technology. The main detractors were an underweight exposure to real estate and an overweight exposure to communication services.
Regarding stock selection, the main detractors from relative returns were positions in information technology and real estate stocks, while the main contributors were positions in materials and financials.
The largest individual detractors from relative returns were overweight positions in Treasury Wine Estates and Lendlease, and an underweight position in Afterpay. Global winemaker and distributor Treasury Wine Estates fell sharply (-14.0%) in response to news that China is preparing to levy hefty import duties on Australian wine exports. Construction giant Lendlease Group fell (-10.6%) after reporting disappointing full-year results due to COVID-19 lockdowns and posting the cost of its planned exit from engineering. Meanwhile, 'buy now, pay later' financial company Afterpay rallied (+31.2%) after providing a series of strong updates, including upgraded earnings and further global expansion.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/ffs-wgas_a.pdfticker: AMP0968AU
commentary_block: Array
factsheet_url:
release_schedule: Quarterly
fund_features:
AMP Capital Specialist Geared Australian Share Fund aims to provide high returns over the long term through geared exposure to securities listed on the Australian Securities Exchange.
- The objective of the Fund’s portfolio before gearing is applied is to provide total returns (income and capital growth) after costs and before tax, above the S&P/ASX 200 Accumulation Index on a rolling 3 year basis.
- The current portfolio roster comprises 40% in Vinva, 30% in DNR, 20% in an internally managed enhanced index, and the remaining 10% in iShares IOZ ETF and futures for active gearing rebalancing.
- The Fund normally invests in shares listed or about to be listed on the Australian Securities Exchange.
manager_contact_details: Array
asset_class: Domestic Equity
asset_category: Australia Large Geared
peer_benchmark: Domestic Equity - Large Geared Index
broad_market_index: ASX Index 200 Index
structure: Managed Fund