September, 2023
The Wholesale Geared Share Fund underperformed its benchmark, the S&P/ASX 100 Accumulation Index, in the September quarter.
Contributing to the Fund’s underperformance was the underweight position in the major bank ANZ Group (ANZ) and overweight position in medical device maker ResMed (RMD). Australia and New Zealand Bank rose by +8.2% outperforming the broader market. ANZ has historically been one of our least preferred banks. The two key bank-specific issues we see are (1) ANZ’s book mix and (2) execution risk across a number of key initiatives including the probable acquisition of Suncorp Bank and the scale up of ANZ’s new ANZ+ platform.
ResMed (-27.9%) produced a broadly solid FY23 result in August with 21% revenue growth driven by both devices and masks, operating profit growth of 14% and strong cash flows. However, the fourth quarter featured a further decline in gross margins in contrast to guidance for improving margins. Gross margins fell 30bps during the quarter due to FX headwinds and an unfavourable product mix caused by a step down in sales of high margin ventilators. The fumbled guidance and poor explanations triggered a sharp selloff in the in share price. Also weighing down the share price is market concerns about the longer term impact on RMD’s growth from anti-obesity GLP-1 medications such as Ozempic/Wegovy. These medicines have proven very effective in reducing weight in clinical trials and have created a lot of buzz and uptake over the last 1-2 years. Given that 70% of obstructive sleep apnea (OSA) incidence is due to obesity, these drugs have the potential to reduce the population of OSA sufferers and shrink the market. However, there are a number of real world hurdles facing these drugs (including high cost, unpleasant side effects, low adherence, and high discontinuance rates) that limit their effectiveness in achieving long term sustained weight loss necessary to eliminate OSA.
Somewhat offsetting these negative contributions was the Fund’s zero-weight position in the Transurban Group (TCL) and overweight position global energy producer Santos (STO). Transurban Group fell -11.0% and underperformed the market in the September quarter. The Company’s FY23 earnings result was softer than expected with investor disappointment partially attributed to TCL’s 4Q23 softer traffic growth. NSW in particular declined QoQ given the impact of ongoing construction and subsequent congestion whilst Melbourne’s volume recovery also slowed sequentially. TCL’s large vehicle traffic mix also appeared to be weaker in some areas in the fourth quarter. TCL took another hit in September when its growth plans were snubbed by the ACCC, blocking their proposed acquisition of Horizon roads. Marking the first time that TCL had been knocked back, the ACCC stated the block was based on the grounds that the sale of the EastLink motorway may reduce competition for future toll road concessions in Victoria.
Higher energy prices and a positive trading update regarding a partial asset sale drove Santos +6.9% higher in the quarter. In August, STO released their half year earnings result producing US$1.1bn of free cash flow and an underlying profit of US$801m. The Company also provided updates on their major growth projects Moomba CCS, Barossa and Pikka Phase 1. Later in the quarter the oil and gas producer announced the sale of a 2.6% interest in PNG LNG with Kumul Petroleam (subject to approvals). Notably the agreement has a call option to acquire another 2.4% for a total interest of 5%. We were pleased with the binding sale agreement particularly as it will help bolster STO’s balance sheet and provide the opportunity to deploy capital to other growth areas.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly-8.pdfJune, 2023
The Wholesale Geared Share Fund outperformed its benchmark, the S&P/ASX 100 Accumulation Index, in the June quarter and continues to deliver attractive levels of excess returns over longer periods as our be-spoke fundamental research process allows us to identify high quality, growth stocks that we believe will generate superior returns for our investors over time.
Contributing to the Fund’s outperformance were the overweight positions in the building materials company James Hardie (JHX) and cloud accounting services provider Xero (XRO). James Hardie surged +24.9% in the June quarter with investors particularly pleased with the Company’s FY23 result released in May. The result was largely in line with expectations with JHX’s producing a FY23 adjusted net income of US$605.5m which aligned with its guidance of US$600-620m. We and the market were pleased to see evidence of JHX’s margin performance improving, with the Company reporting better margins in every region in 4Q23 compared with 3Q23 with JHX’s North America and APAC margin notably improving to 29.0% and 28.9% from 27.0% and 24.7% respectively. Another key takeout was that JHX’s margin outlook appears strong, with the Company’s guide for 1Q24 well above market expectations and reflective of the business’ ability to increase prices in its less cost sensitive areas such as R&R through ColourPlus as well as JHX’s ability to vary and control its variable costs. While JHX remains cautious on the near term outlook, it nonetheless believes It can hold margins above 25%. Looking forward, we believe we are nearing the bottom in end-market demand across JHX’s key exposures.
Xero rallied +33.0% higher with positive momentum stemming from a robust FY23 result (March Year End) that surpassed consensus expectations. A key highlight was the strong top line growth with revenue increasing +28% YoY supported by solid subscriber growth (+14% to 3.74m) and 10% lift in average revenue per user (ARPU). ARPU was supported by price increases, upgrades and strong uptake of platform adjacent products such as payroll and payments. Despite macro challenges faced in the past year, average monthly churn remains low at 0.9%, a testament to the sticky and vital services XRO provides and pleasingly, free cash flow also rose from FY21 NZ$2m to FY22 NZ$102m. We are of the belief that the new CEO’s focus on profitability and disciplined cost controls are evident in XRO’s target for operating expenses to fall from 82% to 75% of revenue in FY24 supporting further margin expansion, higher profits and greater free cash flow.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly-7.pdfMarch, 2023
The Wholesale Geared Share Fund outperformed its benchmark, the S&P/ASX 100 Accumulation Index, in the March quarter and continues to deliver attractive levels of excess returns over longer periods as our be-spoke fundamental research process allows us to identify high quality, growth stocks that we believe will generate superior returns for our investors over time.
Contributing to the Fund’s outperformance were the overweight positions in the gaming manufacturer Aristocrat Leisure Limited (ALL) and building materials company James Hardie (JHX). Although little news was released by Aristocrat Leisure, the Company lifted +21.9% in the March quarter. ALL held their 2023 AGM in February, reiterating their solid FY22 results and full year guidance. We remain encouraged by the +18% increase to revenue and +20% increase in earnings and were pleased to see evidence of ALL’s solid product depth and general strength of their land-based gaming business. The Americas was a particular standout with revenue (+32%) increasing off the back of higher-than-expected gaming op installs and fee-per-day also holding up better-thananticipated. Whilst the market was disappointed with higher supply chain costs within the ANZ business and softer contribution from Pixel United we believe these issues will abate in the medium term. Notably, Pixel United maintained its status as top 5 mobile games publishers in tier-1 western markets despite not releasing any new games during the year and therefore, new game releases should help drive growth in FY23 and beyond. We remain attracted to ALL’s strong balance sheet and defensive qualities with the America’s casino and gambling market historically providing resilient revenue in economic downturns.
Despite producing a softer February 3Q23 result, James Hardie rose +20.6% over the quarter. In the result the building materials producer called out a softening in volumes and continued cost inflation pressures, impacting sales and earnings margins. Whilst this was discouraging we remain attracted to the business given its dominant market position and superior product suite coupled with strong capital management that should drive profitable volume share gains over the medium and long-term. We also note that JHX’S North America Fibre Cement business is only 35% exposed to the single family construction market with the greater majority 65% exposed to the residential repair & remodel (R&R) segment which is expected to be more resilient. We remain encouraged by continued strength in JHX’s price/mix across all of its regions as well as its robust ColorPlus volumes (+18%) which we believe is demonstrative of the effectiveness of their strategy and recent marketing efforts. All of which should provide margin support in near-term periods of volatility.
Somewhat offsetting these positive contributions was the Fund’s zero-weight position in the gold miner Newcrest Mining (NCM) and overweight position in major Australian bank National Australia Bank (NAB). Gold miner Newcrest Mining rallied +33.0% over the March quarter, benefiting from strong appreciation of its mined commodity gold which increased by +8.0% over the period. The Company was also bolstered by positive sentiment stemming from an acquisition offer from Newmont and a positive exploration update for its Red Chris exploration, expanding its exploration target for East Ridge.
Australian banks struggled in the March quarter. This was driven by both cautious margin commentary from CBA at its 1H23 result as well as growing stresses in the global banking system (i.e. the US and Europe). National Australia Bank fell -7.8% in the March quarter, despite the bank’s solid 1Q23 trading update. NAB reported +15% income growth, driven by stronger margins (reflecting the benefits of higher interest rates) and strong Markets and Treasury results. NAB’s trading update also highlighted that asset quality remains benign, illustrated by the decline in loans past due and gross impaired assets. We remain positive on NAB given its exposure to business banking, which should drive margin resilience relative to major bank peers.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly-6.pdfDecember, 2022
The Wholesale Geared Share Fund outperformed its benchmark, the S&P/ASX 100 Accumulation Index, in the December quarter and continues to deliver attractive levels of excess returns over longer periods as our be-spoke fundamental research process allows us to identify high quality, growth stocks that we believe will generate superior returns for our investors over time.
Contributing to the Fund’s outperformance were the overweight positions in the general insurance and reinsurance group QBE Insurance (QBE) and technical services provider ALS (ALQ). QBE Insurance surged +16.5%, finding momentum in the second half of the December quarter following a 3Q22 trading update. We were impressed to see continued strength in QBE’s gross written premium growth rising +6% on the prior corresponding period or +12% in the year to September. Pleasingly, management reiterated that the current inflationary environment continues to be conducive for premium rate increases with increases achieved to be “at or above inflation in most classes.” Management also reaffirmed a positive outlook for the insurance broker and restated the Group’s FY22 GWP growth guidance to be around 10%. QBE should continue to see benefits from improving investment yields and greater premium momentum which should contribute to a strong resilient earnings base.
ALQ posted a strong rally in the fourth quarter, rising +22.7%. We remain confident in ALQ’s long-term growth pipeline with a number of accretive bolt-on acquisitions being made throughout the year including a number of global food and pharmaceutical companies acquired to increase ALQ’s capabilities, generate scale and expand its presence in a number of geographic regions. We were also particularly encouraged to see the Industrials constituent release a solid 1H23 trading update in November with underlying net profit reaching above the top-end of guidance, increasing +29% in comparison to 1H22 and surpassing market expectations. ALQ’s revenue increased +24% on the prior corresponding period buttressed by strong organic and inorganic growth within the company’s Life Sciences (+24%) and Commodities (+31%) businesses. The latter was a standout from the result benefiting from global commodity demand, robust sample volume growth, greater price mix and improvements in Geochemistry. The application of further price increases and abating labour challenges within ALQ’s Life Sciences business coupled with price improvement and improving testing capacity within the Commodities business should fortify earnings in the medium term.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly-5.pdfSeptember, 2022
The Wholesale Geared Share Fund underperformed its benchmark, the S&P/ASX 100 Accumulation Index, in the September quarter but continues to deliver attractive levels of excess returns over longer periods as our be-spoke fundamental research process allows us to identify high quality, growth stocks that we believe will generate superior returns for our investors over time.
Contributing to the Fund’s underperformance were the overweight positions in the industrial and commerical property manager Goodman Group (GMG) and water flow and plumbing solutions manufacturer Reliance Worldwide Corporation (RWC). The rising rate environment and corresponding poor sector sentiment drove Goodman Group -11.6% lower in the quarter. The acceleration of the e-commerce and logistics industry remains a long term structural tailwind for GMG’s business and strong demand coupled with low supply should continue to underpin strong rental growth to help combat rising costs. We were encouraged by evidence of this in GMG’s full year results in August which detailed double digit increases to operating profit and EPS growth at 25% and 24% respectively as well as an average 99% occupancy rate. Management also indicated rental reversion to the market for North America (40%), Australia and New Zealand (20%), Europe and UK (18%) and Asia (4%), highlighting significant opportunity for growth. We believe that GMG maintains a good level of liquidity and cash to allow for a nimble approach, providing the flexibility to react to a volatile environment as well as leverage their strong global position to capitalise on new opportunities.
Whilst August earnings result was broadly ahead of expectations, tough outlook commentary caused Reliance Worldwide Corporation to fall -14.5% in the September quarter. However, we were encouraged by RWC’s ability to pass on an average price increase of 9.5%, indicative of their strong market position and customer base helping alleviate rising costs. Management also reiterated that whilst the repair and remodelling market is facing interest rate headwinds, activity levels and demand have remained strong particularly in Australia where there is a backlog for construction completions. All of which should fortify earnings in the short term period of volatility. RWC’s recent investor day also provided evidence of this, highlighting a +20% increase in sales in August on pcp (excluding contributions from EZ-FLO) of which Americas ex EZ-FLO, Asia Pacific and EMA improved July sales of 0%, 6% and 2% to 19%, 11% and 8% respectively. We remain confident with our position in RWC and believe that they are well positioned to navigate the current volatile environment whilst delivering earnings through strong organic and inorganic growth.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly-4.pdfJune, 2022
The Wholesale Geared Share Fund underperformed its benchmark, the S&P/ASX 100 Accumulation Index, in the June quarter but continues to deliver attractive levels of excess returns over longer periods as our be-spoke fundamental research process allows us to identify high quality, growth stocks that we believe will generate superior returns for our investors over time.
Contributing to the Fund’s underperformance were the overweight positions in the global fintech Block (SQ2) and integrated property manager Charter Hall. Block (-51%) continued to de-rate in the June quarter alongside other tech and payment names. A slight miss in the Square ecosystem’s 1Q22 Gross Profit Volumes (GPV) vs consensus expectation accelerated SQ2’s downward trajectory, dismissing stronger-than expected performances from Cash App, which reached record quarterly inflows and recorded 10 million accounts as of the end of the March quarter. We maintain an optimistic outlook for SQ2 given it is a dominant player in the merchant and payments space and best positioned to deliver double digit compound growth and return on invested capital despite the broader economic slowdown. SQ2 approximate it has less than 3% penetration in a ~US$190bn TAM illustrating further growth potential through international expansion and further upmarket penetration within the US market. We were further encouraged by the avenues for unlocking greater levels of $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 1997 2000 2003 2006 2009 2012 2015 2018 2021 Fund Benchmark $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 Jun-12 Jun-15 Dec-16 Mar-18 Jun-19 Dec-20 Mar-22 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% Fund Benchmark First Sentier Wholesale Geared Share Fund 30 June 2022 penetration as outlined in SQ2’s Investor day in May, including Square Omni-channel expansion, increasing monetization and cross-selling of products and increasing Cash App’s monthly active users through Peer-to-Peer (P2P) engagement.
Despite no trading updates being made during the quarter the rising interest rate environment and subsequent lift in bond yields has placed pressure on Charter Hall (-33%) given its potential impact on asset prices and FUM growth. CHC is a leading real estate fund manager with a strong track record of outperforming industry benchmarks and delivering superior rates of return through their distinct investment strategy which favours triple net leased, long WALE and high-quality tenant covenant assets. This has enabled CHC to steer clear of rent variability and exposure to tenant operational risk – as evident through the pandemic. The attractiveness in the business model comes from the fact that ~60% of earnings coming from funds management – which is relatively capital light, provides higher returns on equity – and highly scalable given their ability to source capital from all types of capital providers including retail, institutional, wholesale and so forth. Although the current macro backdrop has been proven challenging we believe that the strength in the stabilised portfolio alongside their development pipeline will enable them to navigate effectively through this environment until the commercial property market stabilises.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly-3.pdfMarch, 2022
The Wholesale Geared Share Fund underperformed its benchmark, the S&P/ASX 100 Accumulation Index, in the March quarter but continues to deliver attractive levels of excess returns over longer periods as our be-spoke fundamental research process allows us to identify high quality, growth stocks that we believe will generate superior returns for our investors over time.
Contributing to the Fund’s underperformance were the overweight positions in building materials company James Hardie (JHX) and property investment group and manager Charter Hall (CHC). JHX (-27%) faced a tough start to the quarter following the departure of its CEO Jack Truong. JHX continued to move lower in light of the Russia-Ukraine war and as its impact materialised through softening European activity, increased energy, freight and pulp costs, and rising mortgage rates in the US. JHX’s North America Fibre Cement business is 70% exposed to the residential repair & remodel (R&R) segment, with the remaining 30% exposed to the single family new construction market. In our view, the R&R market is likely to hold up in the face of rising mortgage rates given strong house price appreciation in the US, significant levels of home equity, strong employment, and a shortage of new housing stock. We remain confident in JHX’s ability to control costs and their pipeline of new products and projects to generate returns as they continue to expand their global presence.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly-2.pdfDecember, 2021
The Wholesale Geared Share Fund delivered another strong quarterly return as it outperformed its benchmark, the S&P/ASX 100 Accumulation Index, by more than +17%.
Over what has been an unprecedented year for capital markets, the Fund performed admirably and delivered a pleasing return for investors. By investing in companies with above-market growth potential, high-quality earnings and robust balance sheets, the Fund outperformed the broader equity market by more than 10% in the 2020 calendar year.
Contributing to the Fund’s outperformance were the overweight positions in the Buy-Now-Pay-Later firm Afterpay (APT) and the cloud accounting software provider Xero (XRO). Afterpay moved +48% higher through the December quarter as it benefited from a raft of positive trading updates. Each update highlighted continued customer, merchant and sales growth while loss metrics remained relatively unchanged. The most recent trading update announced that the business had set a new monthly sales record in November, with more than $2.1bn in sales being processed through the platform. Adding further support was the partnership between APT and Westpac Bank, which will allow APT to offer Australian customers transaction and savings accounts along with
other cashflow management tools. The additional products will help cement Afterpay’s dominant position in the market whilst also offering additional transaction data that will feed into APT’s risk control mechanisms. XRO rallied +11% as expectations of a recovery in SME activity improved. A positive first-half result provided additional support, with XRO explaining positive
subscriber growth and lower costs helped margins and earnings to grow above consensus expectations. Through its cloud accounting software, subscribers are able to efficiently view and submit tax return filings, monitor live data from bank feeds and access their ledger anywhere and at any time. These items place XRO in good stead to grow its market share, particularly in the US, and drive profitability.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly2-1.pdfJune, 2021
Contributing positively to the Fund’s performance were the overweight positions in the international pizza chain company Domino’s Pizza (DMP) and the property investment and funds management company Charter Hall (CHC). DMP’s expansion into its 10th market, through the acquisition of Domino’s Taiwan, contributed to its +25% rally in the June quarter. Domino’s Taiwan is the second largest pizza chain in the region with 157 corporate and franchise stores. Although these stores are already located in the major cities, DMP believes there is potential to significantly grow average weekly sales by expanding its footprint to more than 400 stores across the region. The transaction will help DMP to establish a larger Asian business that is positioned for additional growth by leveraging regional expertise and operational efficiencies.
CHC (+22%) is one of Australia’s leading fully integrated property groups with a well-diversified portfolio of high quality, long leased properties across the office, retail, industrial and social infrastructure sectors. CHC upgraded its FY21 guidance in the June quarter given ongoing strength in inflows, with the business announcing it had reached $52bn in FUM, and capital deployment in excess of previous expectations. Detracting from the Fund’s performance were the zero-weight exposure to Fortescue Metals Group (FMG) and the overweight position in the Australian airline Qantas Airways (QAN). Iron ore miners, such as FMG (+17%), Rio Tinto (+14%) and BHP Group (+7%), followed the price of the bulk commodity higher through the quarter.
Prices have lifted on the back of stronger steel prices, thanks to the combination of heightened downstream demand, given the size of infrastructure-focused stimulus programs, and steel production cuts
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly-1.pdfMarch, 2021
A disappointing first-half result and FY21 guidance downgrade drove A2M -32% lower in the quarter. With between 40-50% of sales generated from the Daigou channel, A2M faced a significant headwind in the 2020 calendar year as travel restrictions resulting from the coronavirus pandemic eliminated the flow of international students and tourists. Recent oversupply in gift shops and CBEC channels added further pressure on earnings. The confluence of these factors resulted in A2M reporting a 32% decline in EBITDA for the first-half. Given the delays in the rollout of the vaccine program, management lowered their FY21 guidance for revenue and EBITDA margin.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Wholesale-Geared-Share-Fund-Adviser-Quarterly.pdfDecember, 2020
The Wholesale Geared Share Fund delivered another strong quarterly return as it outperformed its benchmark, the S&P/ASX 100 Accumulation Index, by more than +17%.
Over what has been an unprecedented year for capital markets, the Fund performed admirably and delivered a pleasing return for investors. By investing in companies with above-market growth potential, high-quality earnings and robust balance sheets, the Fund outperformed the broader equity market by more than 10% in the 2020 calendar year.
Contributing to the Fund’s outperformance were the overweight positions in the Buy-Now-Pay-Later firm Afterpay (APT) and the cloud accounting software provider Xero (XRO). Afterpay moved +48% higher through the December quarter as it benefited from a raft of positive trading updates. Each update highlighted continued customer, merchant and sales growth while loss metrics remained relatively unchanged. The most recent trading update announced that the business had set a new monthly sales record in November, with more than $2.1bn in sales being processed through the platform. Adding further support was the partnership between APT and Westpac Bank, which will allow APT to offer Australian customers transaction and savings accounts along with other cashflow management tools. The additional products will help cement Afterpay’s dominant position in the market whilst also offering additional transaction data that will feed into APT’s risk control mechanisms.
XRO rallied +11% as expectations of a recovery in SME activity improved. A positive first-half result provided additional support, with XRO explaining positive subscriber growth and lower costs helped margins and earnings to grow above consensus expectations. Through its cloud accounting software, subscribers are able to efficiently view and submit tax return filings, monitor live data from bank feeds and access their ledger anywhere and at any time. These items place XRO in good stead to grow its market share, particularly in the US, and drive profitability.
Somewhat dragging on the Fund’s performance were the overweight position in The a2 Milk Company (A2M) and underweight exposure to the major bank ANZ Bank (ANZ). A disappointing trading update released in December was the key catalyst driving A2M’s -19% decline. The continued disruption to diagou sales activity, which represents a significant portion of infant nutrition sales, drove A2M to downgrade its FY21 sales and earnings guidance. Management noted that the protracted disruption, caused by lockdown laws and travel restrictions, had also spread to A2M’s other nutritional segments. While the overall trading update was disappointing, the release also included several positive items. Chinese MBS sales activity has remained strong through 1H21 with revenue growth expected to reach 40%. Further, the liquid milk businesses in Australia and the US have been performing well and are expected to deliver strong first-half earnings growth.
ANZ (+34%), along with the other Australian major and minor banks, reacted positively to the initiatives included in the 2020/21 budget given optimism that the stimulus plans would help fuel an economic recovery. Although bad debt exposures are still under scrutiny, the support offered to small businesses and households should translate into reduced loan provisions and an improved outlook. ANZ also released its FY20 results in October, which detailed ongoing fee pressures and lower revenue. Overall, we are maintaining our underweight exposure to the banks given longer-term headwinds facing income, costs and capital along with rising regulatory scrutiny.
Fund Activity
We selectively increased the Fund’s exposure to the Financials sector, specifically within the major banks and large asset managers, given the improving economic backdrop. We also added to several recovery-led companies early in the quarter, such as those in Energy and travel-related industries. These purchases were primarily funded by profit taking of several holdings that added significant value to the Fund’s performance earlier in the year, such as those in the Information Technology and the Materials sectors.
ticker: FSF0043AU
release_schedule: Quarterly
commentary_block: Array
factsheet_url:
https://www.firstsentierinvestors.com.au/au/en/adviser/performance/literature.html
Quarterly, see graphic, under Fund Performance
fund_features:
The First Sentier Geared Share Fund invests in large Australian listed companies, with between 30 to 40 stocks typically held in the portfolio, it utilises gearing to magnify returns from underlying investments.
- The manager believes stronger returns are achieved by investing in growing companies that generate consistent returns and reinvest above their cost of capital. Indepth industry, stock and valuation analysis is the foundation of our process.
- The Fund predominantly invests in quality Australian companies with strong balance sheets, earnings growth and high/improving returns on invested capital. The Fund utilises gearing to magnify investment returns.
- The investment objective is to magnify long-term returns from capital growth by borrowing to invest in large Australian companies. The Fund aims to outperform the S&P/ASX 100 Accumulation Index over rolling 7-year periods before fees/taxes.
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