March, 2023
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Wheelhouse-Global-Mar-23.pdfJune, 2022
The Wheelhouse Global Equity Income Fund seeks to deliver a 7-8% real income return, while only assuming around half the market risk (targeted beta of 0.5). This results in consistent absolute return characteristics for Australian investors.
As such, the Global strategy is a risk-minimisation strategy, or a goals-based strategy, where the objective is to reduce risk as much as possible while still achieving a return similar to equities. This approach stands in contrast to most other long-only strategies which are return-maximising and assume full market risk.
In addition to managing a rules-based option overlay, active ‘always-on’ tail protection is used to help defend against capital losses during acute market drawdowns. When combined with the historical defensiveness of the Australian dollar during times of crisis (the fund is unhedged on currency), capital integrity has been meaningfully enhanced during times of crisis.
High yield for minimal risk, or as we like to say, Income and Protection.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Wheelhouse-Global-June-2022.jpgJune, 2021
The Fund distributed 2.88c per unit for the June quarter taking the trailing annual income distribution to 8.68c. This is consistent with the fund objective of 7-8% income yield, while only taking around half the market risk (measured in Beta). This meaningfully lower risk is reflected in a very stable capital value, which has hovered around $1.00 despite all the gyrations in the market since the Wheelhouse Fund inception in May 2017. Underlying income generation has averaged 90bps per month in recent years, even excluding the unusually high-income generation produced over the Coronavirus quarter in March 2020. Looking forward, we remain comfortable that a 7-8% income return is achievable whilst assuming only around half of the equity market’s risk.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Wheelhouse-Global-June-2021.pdfDecember, 2020
The Fund distributed 1.90c per unit for the September quarter taking the annual income distributed per unit to 7.37 cents. The Fund is designed to deliver a 7-8% annual yield, while only taking around half the market risk (measured in Beta). This low market risk is reflected in a very stable capital value, which has hovered around $1.00 despite all the gyrations in the market since the Wheelhouse Fund inception in May 2017. Income generation has been consistent over the years and as expected has provided most of the fund’s returns. Importantly, the income generation has been nearly entirely funded by real return over this period, leaving a stable capital base that we believe will grow over time.
Distributions are paid quarterly and as previously advised, we are targeting a similar cents per unit each quarter that matches the underlying income generation during that period. Historically the June quarter was a larger ‘catch-up’ quarter however going forward we expect it to be similar to the three interim payouts The distribution is principally comprised of option premium, with dividend income typically accounting for around 1.2% of the total yield. After drastic cuts during 2020 due to the pandemic, dividend expectations are increasing for the S&P500 and are now approaching levels seen pre-COVID.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Wheelhouse-quarterly-Dec-2020-FINAL.pdfasset_class: Foreign Equity
asset_category: Global Other
peer_benchmark: Foreign Equity - Other Index
broad_market_index: Developed -World Index
manager_contact_details: Array
ticker: BFL3446AU
release_schedule: Quarterly
commentary_block: Array
factsheet_url:
https://www.wheelhouse-partners.com/global-fund/
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fund_features:
Wheelhouse Global Equity Income aims to generate 7-8% in annual income while only taking half the risk of Global equities. In addition, to outperform the Benchmark over a rolling 5-year period. Systematic income generative overlay (Buywrite) with integrated tail protection.
- The Fund is designed to provide investors access to a portfolio of global listed securities.
- The Fund aims to provide regular income and some capital growth as well as maintain lower levels of volatility relative to global equity markets, over a rolling five year period.
- The Fund will not borrow and, although derivatives are used, they are not used speculatively, to gear the Fund, or to short positions.
structure: Managed Fund