March, 2022
The portfolio outperformed by 287bp over the quarter, driven by positioning in Commodities and interest rate sensitive sectors, and strong stock selection. The top relative contributors to performance for the quarter are as follows:
BHP (BHP)
Overweight BHP rose as commodity prices rallied, supported by attractive valuation, and as investors began to focus on franking credits associated with the Petroleum spinoff.
Wesfarmers (WES)
Underweight Wesfarmers underperformed on a deteriorating demand outlook as the economy reopens.
Computershare (CPU)
Overweight Computershare increased due to an increased earnings outlook from rising rates on cash balances.
The top relative detractors from performance for the quarter are as follows:
Woodside (WPL) and Santos (STO)
Underweight Both rose on higher oil prices. The portfolio bought both stocks and is now overweight.
Reliance Worldwide (RWC)
Overweight Reliance underperformed on higher US interest rates negatively impacting the housing outlook.
Goodman (GMG)
Overweight Goodman underperformed due to a valuation derating on higher US rates and it was seen as a funding source for alternative investments.
June, 2021
The portfolio performance was near flat over the quarter. The top relative contributors to performance for the quarter are as follows:
Galaxy Resources (GXY)
Overweight Galaxy rose on a merger with Orocobre that will create a global top five lithium producer.
Uniti Group (UWL)
Overweight Uniti outperformed as broadacre housing approvals rose, accelerating demand for their fibre assets.
ALS (ALQ)
Overweight ALS reported their full year results that showed positive operating trends, particularly in the geochemistry division which is seeing strong demand from rising commodity prices.
The top relative detractors from performance for the quarter are as follows:
Incitec Pivot (IPL)
Overweight Incitec underperformed following news that their US ammonia plant was not working properly. The outages mean they risk missing out on harnessing the benefits of the current high ammonia prices.
Santos (STO)
Overweight Santos outperformed peers, but the Energy sector underperformed despite a rising oil price as investors increased their focus on carbon emissions and forced asset divestitures in the sector.
Aristocrat Leisure (ALL)
Underweight (not held) Aristocrat announced their half year report that revealed a strong recovery in land-based gaming in the US, while their digital business continued to perform well.
December, 2020
The portfolio underperformed over the quarter largely due to negative stock selection.
The top relative contributors to performance for the quarter are as follows:
Transurban (TCL) Underweight / Not held Transurban fell on the Victorian lockdown and subdued traffic recovery. TCL’s 2.5% estimated FY21 distribution yield also compares unfavourably to other infrastructure and REIT stocks.
SIMS (SGM) Overweight Sims rallied on improving fundamentals and pricing in scrap markets as well as general strength in commodity stocks given the weakness in the USD.
BHP (BHP) Overweight BHP rallied on stronger iron ore as well as general strength in commodity stocks.
The top relative detractors from performance for the quarter are as follows:
Newcrest (NCM) Overweight Newcrest underperformed on a weaker gold price and as investors rotated to cyclicals.
Fortescue (FMG) Underweight Fortescue rallied on stronger iron ore and the portfolio was underweight. The portfolio though now holds a position due to our now positive view on the iron ore outlook.
QBE Insurance (QBE) Overweight QBE underperformed after warning on higher catastrophe and past claim costs. We continue to hold the stock as we remain confident on the pricing cycle.
PORTFOLIO CHANGES
Positioning was rotated more towards stocks with cyclical exposure in the December quarter, with funding sources coming from defensive names. The portfolio has taken new positions in commodity stocks exposed to Electric Vehicles as governments globally look to accelerate that transition.
ticker: ETL8084AU
release_schedule: Quarterly
commentary_block: Array
factsheet_url:
https://documentscdn.financialexpress.net/Literature/4B30EAC2A4552D54C4392CAFFF5FBD5C/190060336.pdf
Provider’s Own Factsheet
Factsheet is monthly, but Commentary is only available in March, June, September, and December,
fund_features:
The Paradice Australian Equities Strategy typically invests in 30-50 companies listed in the S&P/ASX 300, providing investors with an exposure to a diversified portfolio of Australian businesses, believing equity markets are often inefficient due to investor emotion, short-term thinking and too much reliance on a single aspect of a company’s financial health – it’s profit and loss statement.
- Key focus is on management, current and future cash flows and the quality of the balance sheet.
- The manager evaluates a company’s market position taking into account all factors from balance sheet, macroeconomic drivers through an extensive visitation program.
- The Paradice Australian Equities Cap Fund aims to outperform the S&P/ASX 200 Total Return Index (after fees and before taxes) over a rolling three to five year period.
manager_contact_details: Array
asset_class: Domestic Equity
asset_category: Australia Large Blend - Core / Style Neutral
peer_benchmark: Domestic Equity - Large Cap Neutral Index
broad_market_index: ASX Index 200 Index
structure: Managed Fund