October, 2023
Realindex Australian Share Value returned -2.63% (net of fees) during October, outperforming the S&P/ASX 200 benchmark which returned -3.78%.
Value stocks outperformed Growth stocks by 1.2% over the month (S&P Australia BMI Value -3.1% vs. Growth -4.3%). Over the past year, Value has beaten Growth with Value outperforming by 1.4%, but lagged on a five-year basis by 0.4% p.a. providing a longer-term performance headwind.
The Australian stock market fell in October, led by large declines in Growth sectors such as IT and Health Care. Rising bond yields had a negative impact across all sectors, with exception to Utilities. Materials was a relative outperformer falling slightly due to the support of higher commodity prices. With inflation still uncomfortably high, and continued tightness in the labour market, the ‘higher for longer’ narrative is likely to continue. Value stocks were less impacted by interest rate sensitivity as they have a shorter equity duration than Growth stocks. The fund outperformed significantly over the month (+1.15%) driven by both strong cross-sector allocation alpha and strong stock selection between sectors. In terms of allocation effects, the underweight to Health Care contributed the most to performance while Materials contributed the most in terms of stock selection.
The largest stock level contributor was the overweight to Fortescue Metals Group Ltd and the largest stock level detractor was the overweight to AMP Limited. The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (28.7% discount), price-to-cashflow (16.7% discount), and price-to-book (4.5% discount), as well as a dividend yield higher than the benchmark (14.7% premium).
Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 31 October 2023 unless otherwise noted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Share-Value-Class-A-Adviser-Flyer-7.pdfAugust, 2023
Realindex Australian Small Companies Value returned -1.93% (net of fees) during August, versus the S&P/ASX Small Ordinaries benchmark which returned - 1.31%.
Value stocks outperformed Growth stocks by 0.1% over the month (S&P Australia Small Cap Value -1.7% vs. Growth -1.8%). Over the past year, Value has beaten Growth outperforming by 4.6%, while on a five-year basis Value outperformed by 2.1%.
Small caps traded marginally lower in August, however remained up by 2.2% over a 3 month look-back period. The economy showed resilience, with GDP expanding roughly in line with expectations at 0.4% QoQ for the 3 months to June. However, sluggish growth, weak consumer sentiment and a mixed housing market remain as significant headwinds. The Reserve Bank of Australia (RBA) left the cash rate unchanged in August at 4.1%, although it hinted at the possibility of future rate hikes. Despite the fact that monthly CPI shows declines, inflation is still significantly higher than the target rate, with the RBA expecting it to take at least to late 2025 to reach normalcy. Sector performance for the month was mixed with strong gains in Energy (+4.6%) and Consumer Discretionary (+3.0%) %) while Health Care (-4.8%) and Financials (-4.4%) posted negative returns.
Fund performance was lower than the benchmark over the month, largely due to sector allocation. Specifically, our underweight to Energy and overweight to Financials detracted approximately 28bps and 16bps, respectively. However, stock selection within sectors added around 12bps, mainly driven by stock selection within Consumer Staples, Health Care and Materials. From a stock level perspective, the largest detractor was our overweight to Seven West Media resulting in a 22bps detraction to performance. The largest contributors were our overweight to Inghams Group and underweight to Chalice mining.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (32.0% discount), price-to-cashflow (22.8% discount), and price-to-book (13.9% discount), as well as a dividend yield higher than the benchmark (48.9% premium).
Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 31 August 2023 unless otherwise noted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Value-Class-A-Adviser-Flyer-5.pdfJuly, 2023
Realindex Australian Small Companies Value returned +4.04% (net of fees) during July, outperforming the S&P/ASX Small Ordinaries benchmark which returned +3.54%.
Value stocks outperformed Growth stocks by 1.3% over the month (S&P Australia Small Cap Value +4.0% vs. Growth +2.7%). Over the past year, Value has beaten Growth, outperforming by 5.9%, while on a five-year basis Value has beaten growth by 1.8% p.a.
Investor sentiment was markedly more positive during the month as macroeconomic conditions improved both domestically and globally. The latest US inflation read is currently at 3% pa – surprising on the downside, making a soft landing scenario look increasingly possible. In Australia, the labour market remains strong with unemployment at 3.5% in June. Whilst headline inflation hovers at 6%, the Reserve Bank of Australia’s forecast is suggesting 3.25% by the end of 2024. Despite this, consumer sentiment remains pessimistic. However, there are signs of improvement in the housing market with the Reserve Bank of Australia putting a pause on rate hikes. The Australian share market bounced back in July with small capitalization stocks marginally outperforming the broad market. In terms of sectors, Consumer Discretionary (+8.6%) and Communication Staples (+8.2%) led the way, whilst Materials (-0.42%) and Health Care (+0.73%) lagged behind.
We are pleased that fund outperformed the benchmark due to the strong relative performance of the value style in July. Fund stock selection within Metals and Mining added the lion’s share of alpha. In particular, our underweight to several lithium miners such as Core Lithium and Liontown positively contributed to performance. On the other hand, from a sector and stock perspective, the underweight to Health Care and Megaport were the largest detractors.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (26.3% discount), price-to-cashflow (19.1% discount), and price-to-book (21.1% discount), as well as a dividend yield higher than the benchmark (46.3% premium).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Value-Class-A-Adviser-Flyer-4.pdfMay, 2023
Realindex Australian Small Companies Value returned -4.22% (net of fees) during May, versus the S&P/ASX Small Ordinaries benchmark which returned - 3.26%.
Value stocks underperformed Growth stocks by 1.6% over the month (S&P Australia Small Cap Value -4.0% vs. Growth -2.3%). Over the past year, Value has outperformed Growth by 1.6%, while on a five-year basis Value has outperformed by 0.8% p.a.
The RBA continues to maintain its restrictive monetary policy, navigating its narrow path to the 2-3% target range. Growth in the March quarter was lacklustre, with concerns over rising rents' impact on inflation while consumer sentiment declined, particularly among renters. On the other hand, job market confidence remains relatively robust.
Australian markets traded lower over the month with disappointing earnings from major banks, mixed economic data, and a surprise increase in local interest rates. Financials and Materials struggled, while retailers reported a slowdown in sales and a deteriorating near-term outlook. In contrast, the Information Technology sector surged. Within the small cap space, semiconductor companies such as Silex and Weebit Nano rallied.
Fund performance struggled due to negative stock selection in both Consumer Discretionary and Information Technology sectors, resulting in a decrease of - 81bps and -33bps, respectively. While, positive stock selection in Financials along with underweights to Materials and Energy cushioned performance. The largest stock level detractor was the overweight to Myer Holdings Limited and the largest contributor was the overweight to NIB holdings Ltd. Overall, the fund slightly underperformed the Value benchmark.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (26.9% discount), price-to-cashflow (16.3% discount), and price-to-book (17.4% discount), as well as a dividend yield higher than the benchmark (46.7% premium).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Value-Class-A-Adviser-Flyer-3.pdfApril, 2023
Realindex Australian Small Companies Value returned +2.06% (net of fees) during April, versus the S&P/ASX Small Ordinaries benchmark which returned +2.78%..
Value stocks underperformed Growth stocks by 1.5% over the month (S&P Australia Small Cap Value +1.7% vs. Growth +3.3%). Over the past year, Value has lagged Growth, underperforming by 4.1%, but on a five-year basis Value has beaten growth by 0.6% p.a.
The Australian share market ended the month mildly higher. Small caps outperformed large caps. In particular, Health Care (+4.6%) and Consumer Discretionary (+3.9%) sectors performed well. Consumer confidence increased in April due to the RBA's decision to pause on an interest rate increase, but confidence remains largely weak. The unemployment rate is 3.5%, and the inflation rate is 7.8% as of March 2023.
Poor stock selection within the Industrials, Communication Services and Health Care sectors resulted in a large detraction from performance. In particular, an overweight to Ama Group within Industrials, an automotive aftercare and accessories business, detracted 9bps from performance. An overweight to Seven West Media within Communication Services also detracted 12bps from performance, and an underweight to Telix Pharmaceuticals within Health Care resulted in a 33bps detraction from performance, the largest stock detractor over the month.
On the flip side, the portfolio’s overweight allocation to Financials and strong stock selection within the sector added to performance. Both Helia Group within Financial Services and NIB Holdings within Insurance added 12bps of performance each. Stock selection within the IT sector also added to performance over the month.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (31.5% discount), price-to-cashflow (18.4% discount), and price-to-book (18.3% discount), as well as a dividend yield higher than the benchmark (44.9% premium).
Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 30 April 2023 unless otherwise noted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Value-Class-A-Adviser-Flyer-2.pdfFebruary, 2023
Realindex Australian Small Companies Value returned -3.42% (net of fees) during February, outperforming the S&P/ASX Small Ordinaries benchmark which returned -3.70%..
Value stocks outperformed Growth stocks by 0.9% over the month (S&P Australia Small Cap Value -3.5% vs. Growth -4.4%). Over the past year, Value has beaten Growth, outperforming by 8.1%, while on a five-year basis Value has beaten growth by 1.0% p.a.
February marked a sharp reversal from the gains in January as investors weighed the possibility of stickier inflation and higher bond yields. The labour market softened as unemployment rose marginally to 3.7% while consumer confidence fell by -6.9% according to the Westpac Consumer Confidence Index. The Reserve Bank of Australia’s hawkishness continued in February with a 25bps increase, with further expectations of rate hikes over the months ahead. Retail sales jumped by 1.9% month-on-month for January with volumes still 12% above pre-pandemic levels, whilst house price declines have levelled off. Most sectors fell for the month, with Materials (-8.2%), Health Care (-6.4%) and Energy (-6.1%) stocks falling the most, while Industrials (-0.1%) and Information Technology (-0.3%) remained relatively flat.
The fund outperformed due to a sector allocation, in particular the underweight in Materials (-6.3%) relative to the benchmark, generating +29bps. Whereas, our underweight in Information Technology (-1.1%) cost the fund -4bps. The largest stock level contributor was the overweight to Helia Group Limited and the largest stock level detractor was the underweight to Eagers Automotive Limited.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (28.8% discount), price-to-cashflow (21.2% discount), and price-to-book (17.7% discount), as well as a dividend yield higher than the benchmark (38.2% premium).
Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 28 February 2023 unless otherwise noted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Value-Class-A-Individual-Flyer.pdfJanuary, 2023
Realindex Australian Small Companies Value returned +6.49% (net of fees) during January, versus the S&P/ASX Small Ordinaries benchmark which returned +6.56%..
Value stocks underperformed Growth stocks by 1.8% over the month (S&P Australia Small Cap Value +5.8% vs. Growth +7.6%). Over the past year, Value has beaten Growth, outperforming by 13.8%, while on a five-year basis Value has beaten growth by 0.6% p.a.
The Australian share market had a strong start, posting a +6.2% increase for January. This growth was largely due to the positive outlook on China's reopening. While investors hoped for inflation to remain contained, stronger than expected CPI print (+8.4% year-on-year to December) by the Australian Bureau of Statistics dashed any hopes for a pause in the Reserve Bank of Australia’s rate hikes. Our markets largely mirrored US equities which also rallied in January on the back of positive investor sentiment, easing labour costs and cooling inflation.
Most sectors rose over the month with Consumer Discretionary (+11.2%) Health Care (+8.5%) and Materials (+8.3%) leading the pack. From a sector perspective, the portfolio’s largest contributor was the overweight to Consumer Discretionary and the largest detractor was the underweight to Health Care.
Australian Value struggled throughout the month, however our portfolio held up due to individual stock selection bets. In particular, our overweight in Myer Holdings (+1.7%) added 0.56% to performance. Furthermore, our overweight in Resolute Mining (+0.7%) added 0.19%. Shipbuilder Austal, declined 20.2% over the month, and cost the portfolio 0.18% in performance.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (27.3% discount), price-to-cashflow (17.5% discount), and price-to-book (19.9% discount), as well as a dividend yield higher than the benchmark (37.4% premium).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Value-Class-A-Adviser-Flyer-1.pdfNovember, 2022
Realindex Australian Small Companies Value returned +3.43% (net of fees) during November, versus the S&P/ASX Small Ordinaries benchmark which returned +4.92%.
Value stocks underperformed Growth stocks by 0.7% over the month (S&P Australia Small Cap Value +4.2% vs. Growth +4.9%). Over the past year, Value has beaten Growth, outperforming by 19.1%, while on a five-year basis Value has beaten growth by 0.6% p.a.
Australian small caps continued to rally in November, although ending up largely flat (-0.81%) over a 3 month horizon. Inflation has shown signs of easing, with the Australian Bureau of Statistics showing a slowdown in CPI from 7.3% to 6.9% in the twelve months to October.
Housing, food and transport exhibited the greatest price movements. This was also reflected globally, with inflation stabilizing in the US and Eurozone.
During the month, we saw strong performance in Materials (+11.7%) and Financials (+4.4%) whilst Consumer Staples (-0.9%) and Communication Services (-0.7%) weakened.
From a sector perspective, the largest detractor was the overweight to Industrials and the largest contributor was the underweight to Consumer Discretionary. Specifically, stock selection in Industrials and Materials contributed to the funds underperformance. The largest stock level detractor was the overweight to Seven West Media Limited which detracted 0.24% and the largest stock level contributor was the inclusion of Myer Holdings Limited.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (31.9% discount), price-to-cashflow (13.7% discount), and price-to-book (24.9% discount), as well as a dividend yield higher than the benchmark (40.5% premium).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Value-Class-A-Adviser-Flyer.pdfOctober, 2022
The Realindex Australian Small Companies Fund returned +4.12% (net of fees) during October, versus the S&P/ASX Small Ordinaries benchmark which returned +6.46%..
Value stocks underperformed Growth stocks by 0.8% over the month (S&P Australia Small Cap Value +5.3% vs. Growth +6.1%). Over the past year, Value has beaten Growth, outperforming by 16.1%, while on a five-year basis Value has beaten growth by 0.8% p.a.
The Australian share market rebounded in October after falling significantly in September, and remains largely flat over a 3 month horizon. Inflation continues to be a problem, with the September quarter headline number at 7.3%. Due to this, the Reserve Bank of Australia continues to tighten policy, albeit at lower 25bps increments. Consumer confidence continues to be muted and the property market remains downbeat due to rate hikes. During the month, we saw strong rebound in performance across all sectors led by Health Care (+12.3%) and REITs (+11.7%).
From a sector perspective, the largest detractor was the underweight to Materials. Stock selection was a headwind in the Materials sector, specifically our underweights to stocks within Diversified Metals & Mining. For example, the exclusion of Liontown Resources and Syrah Resources detracted -26bps and - 19bps respectively. On the other hand, the largest contributor was the overweight to Industrials and the largest stock level contributor was the exclusion to BrainChip Holdings Ltd.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (31.6% discount), price-to-cashflow (11.7% discount), and price-to-book (23.2% discount), as well as a dividend yield higher than the benchmark (39.7% premium). Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 31 October 2022 unless otherwise noted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-13.pdfSeptember, 2022
The Realindex Australian Small Companies Fund returned +1.93% (net of fees) during the September quarter, outperforming the S&P/ASX Small Ordinaries benchmark which returned -0.47%.
Value stocks outperformed Growth stocks by 2.1% over the quarter (S&P Australia Small Cap Value +1.7% vs. Growth -0.4%). Over the past year, Value has beaten Growth, outperforming by 14.0%, while on a five-year basis Value has beaten growth by 0.6% p.a.
The Australian share market had a choppy ride as gains earlier in the quarter were largely wiped out in the month of September, with large caps (ASX 200) falling by 6.2%. Small Ordinaries had a tougher time, falling by 11.2%. Fortunately, the portfolio value tilt dampened some of this decline. Annualised year-onyear inflation hovered at 6.8% for August, with local businesses experiencing cost pressures. In response to inflationary concerns, the Reserve Bank of Australia raised the cash rate by 50bps in September and most recently by 25bps in early October to 2.6%. Whilst the labour market remains tight, we are also beginning to see some weakness with the August unemployment rate at 3.5% (a +0.1% increase from July). Consumer confidence continues to be muted and the property market remains downbeat due to rate hikes.
The weak domestic market was also in part driven by international peers, with US inflation remaining higher than expected. Inflation in Europe quickened in September to an annualized rate of 10% on the back of further energy supply disruptions and the alleged sabotage of the Nordstream pipelines. Markets were also rattled by the UK fiscal update with the Pound to Dollar exchange rate sliding to 1.05. China’s insistence on its zero-COVID policy continues to be a headwind, although we are beginning to see some government stimulus.
During the quarter, we saw very strong performance in Small Cap energy names (+12.4 %) whilst Consumer Staples fell (-9.6%). Small Cap REITs (-6.7%) also struggled on the back of high interest rates, continued rate hikes and a weakening housing market. The month of September was particularly brutal with double-digit declines in most sectors.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Quarterly-1.pdfAugust, 2022
The Realindex Australian Small Companies Fund returned +0.37% (net of fees) during August, versus the S&P/ASX Small Ordinaries benchmark which returned +0.58%.
Value stocks outperformed Growth stocks by 1.3% over the month (S&P Australia Small Cap Value +1.3% vs. Growth +0.0%). Over the past year, Value has beaten Growth, outperforming by 12.6%, but lagged on a five-year basis by 0.5% p.a. providing a longer-term performance headwind.
The Australian share market made some modest gains in August, against a challenging macroeconomic backdrop. The RBA continues to tighten, with a 50bps hike in August and several more hikes being anticipated. The Labour market in Australia is beginning to show weakness with job ads being negative for the first time this calendar year. Consumer confidence has continued to fall, and is now barely above COVID lockdown 2020 levels. Globally, we continue to see concerns around supply-side driven inflation, subsequent policy hiking and a contracting US economy. Inflation in Europe also remains heightened with 1 month baseload power futures surging in August. During the month, Australian small capitalization stocks fared worse than large capitalization names.We saw mixed performance from the sectors. Energy (+6.5%) and Materials (+4.3%) performed well whilst IT performed poorly (-4.6%). REITs (-4.9%) also fell on the back of higher interest rates.
From a sector perspective, the largest contributor was the overweight to Communication Services and the largest detractor was the underweight to Materials. The largest stock level contributor was the overweight to Perenti Global Limited and the largest stock level detractor was the exclusion of Liontown Resources Limited.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (35.5% discount), price-to-cashflow (16.3% discount), and price-to-book (19.5% discount), as well as a dividend yield higher than the benchmark (41.7% premium). Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 31 August 2022 unless otherwise noted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-12.pdfJuly, 2022
The Realindex Australian Small Companies Fund returned +9.95% (net of fees) during July, versus the S&P/ASX Small Ordinaries benchmark which returned +11.43%.
Value stocks outperformed Growth stocks by 6.5% over the quarter (S&P Australia Small Cap Value -16.6% vs. Growth -23.2%). Over the past year, Value has beaten Growth, outperforming by 13.2%, but lagged on a five-year basis by 0.1% p.a., providing a longer-term performance headwind.
The Australian share market finished the quarter lower due to declining investor confidence along with increasing macro headwinds. Inflation and the reserve bank’s policy response remained at the centre of investor concerns. The RBA raised the cash rate by 50bps to 1.35% in July, which followed 50bps in June and 25bps in May. The board argued monetary stimulus was no longer needed due to the strength of the economy and labour market coupled with inflationary pressures. During the quarter, we also saw a Labor Party win in the Australian Federal election, with Anthony Albanese elected into power. However, the market response to this has been negligible. The macro environment globally continued to be concerning with several head winds. The war in Ukraine sees no viable resolution and the continued surge in energy and commodities prices in the second quarter of this year has hampered sentiment. Moreover, we have not seen China’s zero-Covid policy change materially over the last couple of months, and this has continued to have an impact on global supply chains. Overall, we saw significant rise of inflation rates in developed markets and consequently aggressive cash rate hikes. Similar to Australia, the US labour market saw strength with low unemployment rates (steady at 3.6%) and strong hiring and wage growth. These factors suggest we are in late cycle.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-11.pdfJune, 2022
The Realindex Australian Small Companies Fund returned -17.01% (net of fees) during the June quarter, outperforming the S&P/ASX Small Ordinaries benchmark which returned -20.39%.
Value stocks outperformed Growth stocks by 6.5% over the quarter (S&P Australia Small Cap Value -16.6% vs. Growth -23.2%). Over the past year, Value has beaten Growth, outperforming by 13.2%, but lagged on a five-year basis by 0.1% p.a., providing a longer-term performance headwind.
The Australian shared market finished the quarter lower due to declining investor confidence along with increasing macro headwinds. Inflation and the reserve bank’s policy response remained at the centre of investor concerns. The RBA raised the cash rate by 50bps to 1.35% in July, which followed 50bps in June and 25bps in May. The board argued monetary stimulus was no longer needed due to the strength of the economy and labour market coupled with inflationary pressures. During the quarter, we also saw a Labor Party win in the Australian Federal election, with Anthony Albanese elected into power. However, the market response to this has been negligible. The macro environment globally continued to be concerning with several headwinds. The war in Ukraine sees no viable resolution and the continued surge in energy and commodities prices in the second quarter of this year has hampered sentiment. Moreover, we have not seen China’s zero-covid policy change materially over the last couple of months, and this has continued to have an impact on global supply chains. Overall, we saw significant rise of inflation rates in developed markets and consequently aggressive cash rate hikes. Similar to Australia, the US labour market saw strength with low unemployment rates (steady at 3.6%) and strong hiring and wage growth. These factors suggest we are in late cycle.
Overall, Australian small capitalization stocks fared worse than large capitalization names. However, the portfolio’s natural tilt towards value has been helpful in alleviating some of that pain during the quarter. Over the quarter, within Small Ordinaries, we saw high book and earnings yield stocks perform well on a relative basis. Similarly, momentum and low volatility also showed strong factor performance, whilst Growth and high beta names underperformed. Materials (-31.7%) and IT (-27.9%) performed poorly over the quarter while Consumer Staples (-4.7%) and Energy (+1.9%) were the best performers. Overall, in a late cycle environment, we are seeing stability, earnings certainty and value being preferred over Growth.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Quarterly.pdfMay, 2022
The Realindex Australian Small Companies Fund returned -5.10% (net of fees) during May, outperforming the S&P/ASX Small Ordinaries benchmark which returned -7.01%. Value stocks outperformed Growth stocks by 4.7% over the month (S&P Australia Small Cap Value +1.2% vs. Growth -3.5%). Over the past year, Value has beaten Growth, outperforming by 11.9%, but lagged on a five-year basis by 0.6% p.a., providing a longer-term performance headwind. April saw the continuation of major themes exhibited in March. Overall, global markets traded lower on the back of greater uncertainty. The Australian market followed suit, trading lower over the month. Key themes driving market uncertainty were: i) persistent inflationary pressures, particularly in the US and Europe; ii) subsequent central bank monetary tightening along with market expectations of an aggressive rate hike trajectory; and iii) supply chain disruptions from both the Ukraine War and Chinese lockdowns.
Australian CPI rose 2.1% quarter on quarter (QoQ) and 5.1% year on year (YoY) in Q1. Whilst this was lower than inflation prints in the US, it still surprised the local market being well above expectations. Price increases for non-discretionary items such as food and petrol contributed to unexpected inflation, as did new dwelling purchases prices and childcare costs. The RBA rate hike at the May Board meeting was largely anticipated by investors in April, with expectations of further hikes later this year. There are some concerns that rates hikes will have an outsized effect versus history given higher household debt levels.
In small caps, the inflation trade dominated markets with Energy stocks continuing to outperform. The S&P Australian Small Cap Energy posted 8.0% for the month while S&P Australian Small Cap Consumer Staples also strongly performed posting 6.7% for the month. Technology stocks led the losses (S&P Australian Small Cap IT: -10.7%) along with Communication Services (S&P Australian Small Cap Comm Services: -2.7%) further highlighting the weakness of growth stocks in the market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Individual-Flyer.pdfApril, 2022
The Realindex Australian Small Companies Fund returned -0.24% (net of fees) during April, outperforming the S&P/ASX Small Ordinaries benchmark which returned -1.50%.
Value stocks outperformed Growth stocks by 4.7% over the month (S&P Australia Small Cap Value +1.2% vs. Growth -3.5%). Over the past year, Value has beaten Growth, outperforming by 11.9%, but lagged on a five-year basis by 0.6% p.a., providing a longer-term performance headwind.
April saw the continuation of major themes exhibited in March. Overall, global markets traded lower on the back of greater uncertainty. The Australian marketfollowed suit, trading lower over the month. Key themes driving market uncertainty were: i) persistent inflationary pressures, particularly in the US and Europe;
ii) subsequent central bank monetary tightening along with market expectations of an aggressive rate hike trajectory; and iii) supply chain disruptions from both the Ukraine War and Chinese lockdowns. Australian CPI rose 2.1% QoQ and 5.1% YoY in Q1. Whilst this was lower than inflation prints in the US, it still surprised the local market being well above expectations. Price increases for non-discretionary items such as food and petrol contributed to unexpected inflation, as did new dwelling purchases prices and childcare costs. The RBA rate hike at the May Board meeting was largely anticipated by investors in April, with expectations of further hikes later this year.
There are some concerns that rates hikes will have an outsized effect versus history given higher household debt levels. In small caps, the inflation trade dominated markets with Energy stocks continuing to outperform. The S&P Australian Small Cap Energy posted 8.0% for the month while S&P Australian Small Cap Consumer Staples also strongly performed posting 6.7% for the month. Technology stocks led the losses (S&P Australian Small Cap IT: -10.7%) along with Communication Services (S&P Australian Small Cap Comm Services: -2.7%) further highlighting the weakness ofgrowth stocks in the market.
From a sector perspective, the largest contributor was the underweight to Information Technology and the largest detractor was the underweight to Consumer Discretionary. The largest stock level contributor was the overweight to Grange Resources Limited and the largest stock level detractor was the underweight to Whitehaven Coal Limited. Moreover, our overall value tilt paid off in April. The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (30.7% discount), price-to-cashflow (22.8% discount), and price-to-book (20.5% discount), as well as a dividend yield higher than the benchmark (57.1% premium)
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-10.pdfFebruary, 2022
The Realindex Australian Small Companies Fund returned +3.19% (net of fees) during February, outperforming the S&P/ASX Small Ordinaries benchmark which returned -0.01%. Value stocks outperformed Growth stocks by 6.6% over the month (S&P Australia SmallCap Value +3.2% vs. Growth -3.4%). Over the past year, Value has beaten Growth, outperforming by 6.4%, but lagged on a five-year basis by 1.9% p.a., providing a significant longer-term performance headwind. Multiple themes affected markets and investors in February and the year more broadly.
With inflationary pressures continuing, there was a clear shift by central banks positioning themselves towards controlling inflation and away from economic stimulus. The direction of future policy however has been made more uncertain by Russia’s recent invasion of Ukraine.
The economic sanctions governments around the world have imposed on Russia, including a freeze of the global payments system into and out of Russia, have increased the risk of an economic downturn. A flattening yield curve and an emerging crisis over oil and gas supplies have heightened fears of a global recession. The result of these events was a sell-off in global equities and a spike in equity volatility. The Australian equity market was one of the few markets to post positive returns when global markets (MSCI ACWI) sold off over 5% in AUD terms.
of an economic downturn gave way to managing the risks of a spike in energy and commodity prices more broadly, the cyclically oriented Value sectors outperformed Growth-oriented sectors. The resources sector was the main leader in the market with Energy posting over 9.8% (S&P Australia Small Cap Energy) and Materials (S&P Australia Small Cap Materials +5.7%) also a strong performer. The Information Technology (-11.8%) and Health Care (-10.2%) sectors were the main underperformers.
Information Technology was the largest contributor for the month driven by the portfolio’s underweight to that sector and stock selection in IT services. The underweight to Novonix (-32.9%) was a key contributor. All sectors except Energy contributed to performance mainly driven by stock selection effects. The underweight to Energy was a key detractor. Underweight to Whitehaven Coal (+22.8%) was one of the largest stock detractors to the portfolio. From a style perspective, relative value, as well as momentum, were rewarded in the market; Growth and Quality were shunned by investors. The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (29.3% discount), price-to-cashflow (17.3% discount), and price-to-book (20.4% discount), as well as a dividend yield higher than the benchmark (31.7% premium).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-9.pdfJanuary, 2022
The Realindex Australian Small Companies Fund returned -6.79% (net of fees) during January, outperforming the S&P/ASX Small Ordinaries benchmark which returned -9.00%.
Value stocks outperformed Growth stocks by 4.1% over the month (S&P Australia SmallCap Value -7.3% vs. Growth -11.5%). Over the past year, Value has beaten Growth, outperforming by 2.0%, but lagged on a five-year basis by 3.5% p.a., providing a significant longer-term performance headwind. Global equity markets braced for a volatile start in 2022 driven by concerns around tighter Central Bank policy in the US. The growing tensions between Russia and Ukraine and disappointing earnings calls from major US firms also added to global market uncertainty. The result was a large sell off in equity markets that the Australian market was not immune from. Resource rich economies befitted from the prevailing environment; Australian resources were one of the few pockets of the market which performed during this period.
The S&P Australia Small Cap Energy index 1.6% while IT, Health Care and the consumer sectors all significantly underperformed. Small Caps also underperformed larger companies as investors sought refuge in lower risk, value oriented names; the ASX 100 posting a 6.1% loss for the month versus the ASX Small Ordinaries with posted a 9.0% loss for the month. Stock selection within Materials was the largest sector level contributor. This largely came from stocks not held in Metals and Mining segments including Chalice (-19.6%), Liontown Resources (-14.5%) and Australian Strategic Materials (-21.6%). Positioning within the Financials sector was also positive for performance led by underweights to Asset Managers Australian Ethical (-32.7%) and Pinnacle (-27.7%). The underweight to the outperforming Energy sector was the most meaningful detractor to performance along with stock selection in Communication Services and the significant underweight to TPG (+0.2%). From a style perspective, relative value was rewarded in the market, but so too, low risk stocks as measured by their historical price volatility. Most other styles including momentum and other dimensions of firm quality were shunned by investors in small caps.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-8.pdfNovember, 2021
The Realindex Australian Small Companies Fund returned -1.72% (net of fees) during November, versus the S&P/ASX Small Ordinaries benchmark which returned -0.31%. Value stocks significantly underperformed Growth stocks by 2.6% over the month (S&P Australia SmallCap Value -0.2% vs. Growth +2.4%). Over the past year, Value has done better than Growth, outperforming by 2.0%, but lagged on a five year basis by 3.3% p.a., providing a longer-term performance headwind.
The portfolio’s positioning in coal stocks resulted in both the largest stock detractor and largest stock contributor this month. The largest detractor was an overweight to New Hope (-13.6%) which fell after very strong performance over the past 6 months. This was almost entirely offset by the largest contributor Whitehaven Coal (-19.2%) which is not held by the portfolio as it is considered a large company under the portfolio’s accounting weighted methodology.
At the sector level, Materials was a large detractor coming largely from the portfolio’s positioning in gold stocks. Whilst gold rose +1.5% over the month, underperformance was driven by stock selection as the portfolio’s holding is inline with the benchmark. Overweights to Mt Gibson (-12.5%) and Champion Iron (-8.9%) also detracted as iron ore fell another -9.5% (taking its three month collapse to over -50%). Overweights to media companies HT&E (+17.7%) and Seven West (+12.4%) were positive for performance - their contributions were magnified as neither stock is in the benchmark. Other contributors were generally stock specific and included not holding Points Bet (-19.1%), and large underweights to EML Payments (-24.2%) and Zip Co. (-7.9%). The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (34.4% discount), price-to-cashflow (24.7% discount), and price-to-book (21.7% discount), as well as a dividend yield higher than the benchmark (46.8% premium). Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 30 November 2021 unless otherwise noted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-7.pdfOctober, 2021
The Realindex Australian Small Companies Fund returned +0.87% (net of fees) during October, versus the S&P/ASX Small Ordinaries benchmark which returned +0.92%.Value stocks significantly underperformed Growth stocks by 2.6% over the month (S&P Australia SmallCap Value -0.2% vs. Growth +2.4%). Over the pastyear, Value has done better than Growth, outperforming by 2.0%, but lagged on a five year basis by 3.3% p.a., providing a longer-term performance headwind.
The portfolio’s positioning in coal stocks resulted in both the largest stock detractor and largest stock contributor this month. The largest detractor was an overweight to New Hope (-13.6%) which fell after very strong performance over the past 6 months. This was almost entirely offset by the largest contributor Whitehaven Coal (-19.2%) which is not held by the portfolio as it is considered a large company under the portfolio’s accounting weighted methodology. At the sector level, Materials was a large detractor coming largely from the portfolio’s positioning in gold stocks. Although gold rose +1.5% over the month, underperformance was driven by stock selection as the portfolio’s holding is inline with the benchmark. Overweights to Mt Gibson (-12.5%) and Champion Iron (-8.9%) also detracted as iron ore fell another -9.5% (taking its three month collapse to over -50%).
Overweights to media companies HT&E (+17.7%) and Seven West (+12.4%) were positive for performance - their contributions were magnified as neither stock is in the benchmark. Other contributors were generally stock specific and included not holding Points Bet (-19.1%), and large underweights to EML Payments (-24.2%) and Zip Co. (-7.9%).The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (32.9% discount), price-to-cashflow (23.0% discount),and price-to-book (31.4% discount), as well as a dividend yield higher than the benchmark (48.8% premium)
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-6.pdfAugust, 2021
The Realindex Australian Small Companies Fund returned +3.19% (net of fees) during August, versus the S&P/ASX Small Ordinaries benchmark which returned +4.98%.
Value stocks performed in line with Growth stocks over the month (S&P Australia SmallCap Value +4.3% vs. Growth +4.3%). Over the past year, Value has outperformed Growth by 6.7%, but on a five year basis, underperformed by 2.6% p.a., providing a longer-term performance headwind. The largest detractor was stock selection in Materials. This largely came from the portfolio’s positioning in lithium companies (large underweight) and iron stocks (large overweight, the base commodity slumped 31.7%), which combined accounted for almost two thirds of the portfolio’s underperformance. The continued strong momentum of lithium stocks can be seen in the market cap benchmark as the two largest companies in the Small Ordinaries are miners in this industry (Orocobre and Pilbara Mines).
Stock selection within the Healthcare sector also detracted. This was driven by an underweight to strong performing growth stocks including Clinuval (+37.7%) and Nanosonics (+24.9%), in addition to an overweight to Australian Pharmaceutical (-4.6%) which was fell after rejecting the takeover proposal made by Wesfarmers in July
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-5.pdfJuly, 2021
The Realindex Australian Small Companies Fund returned +2.05% (net of fees) during July, outperforming the S&P/ASX Small Ordinaries benchmark which returned +0.68%.
Value stocks underperformed Growth stocks by 0.5% over the month (S&P Australia SmallCap Value +1.6% vs. Growth +2.2%). Despite this headwind the portfolio outperformed driven by stock specifics and differences between the portfolio and its value benchmark. Stock selection within Healthcare was the largest contributor mostly driven by Australian Pharmaceutical Industries (+26.5%), one of the largest overweight positions, which was the recipient of a takeover offer. Also adding value were not holding growth stocks Polynovo (-18.8%) or Clinuvel (-9.3%). Iron ore stocks continued to perform strongly despite the base commodity falling from all time highs in the second half of the month. Grange Resources (+42.0%) was the largest stock level contributor – the portfolio holds a sizeable position whilst it is not in the Small Ordinaries benchmark. An overweight to Champion Iron (+19.1%) also added value.
Mining stocks with Lithium exposure continued to soar. Underweights to Pilbara Mine (+22.1%, the largest stock level detractor), Galaxy Resources (+27.0%) and Orocobre (+27.5%) detracted from performance. The portfolio did benefit from positions in IGO Group (+22.0%) and Lynas (+28.6%), both of which have been promoted to the S&P/ASX 100 this year.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (31.5% discount), price-to-cashflow (24.2% discount), and price-to-book (19.4% discount), as well as a dividend yield higher than the benchmark (40.4% premium). Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 31 July 2021 unless otherwise noted
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-4.pdfMay, 2021
The Realindex Australian Small Companies Fund returned +0.43% (net of fees) during May, outperforming the S&P/ASX Small Ordinaries benchmark which returned +0.27%.Value stocks outperformed Growth stocks by 0.4% over the month (S&P Australia SmallCap Value +0.7% vs. Growth +0.3%). Over the past year, Value has outperformed Growth by 4.3%, and on a five year basis underperformed by 1.0% p.a..The portfolio’s underweight allocation to the weak Information Technology sector was by far the largest contributor to performance. This came largely from stocks the portfolio is very underweight including EML Payments (-41.9%) and Nuix (-33.1%).
The portfolio benefitted from not holding several companies that are in the Small Ordinaries benchmark but are considered a ‘large’ company according to their accounting measures that define our portfolio construction. This includes Flight Centre (-9.1%), Nufarm (-7.3%) and Seven Group (-7.0%).Stock selection within Materials was the biggest sector detractor driven largely by the net underweight exposure to gold stocks (after the commodity gained over 8% over the month).
Overweights to poor performing mining services companies, including Perenti (-38.5%) and OM Holdings (-18.9%) also detracted from relative performance.At the stock level an overweight to New Hope (+24.9%) was one of the largest contributors and more than able to offset not holding fellow coal company Whitehaven (+23.1%, unheld as similar to the names above it is also a large company under our methodology). The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (24.0% discount), price-to-cashflow (18.4% discount), and price-to-book (16.0% discount), as well as a dividend yield higher than the benchmark (35.3% premium)
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-3.pdfFebruary, 2021
The Realindex Australian Small Companies Fund returned +0.72% (net of fees) during February, versus the S&P/ASX Small Ordinaries benchmark which returned +1.55%.
Value stocks significantly outperformed Growth stocks by 2.6% over the month (S&P Australia SmallCap Value +3.0% vs. Growth +0.4%), however over the past year Value still lags Growth by 5.8%. Financials was the largest sector level detractor to relative performance however this was almost entirely driven by two stocks not held by the portfolio: Afterpay competitor Zip (+43.1%) and Virgin Money (+39.5%). They were the two best performers in the S&P/ASX 300 and the two largest detractors at the portfolio level.
Despite the Information Technology sector being sold off globally the sector outperformed within small caps. This detracted from performance although it was driven by stock selection rather than the portfolio’s underweight position. This included not holding EML Payments (+29.6%) or Tyro Payments (+19.4%) and overweights to Data#3 (-10.8%) and Dicker Data (-8.4%).
The portfolio was also hurt by not holding several companies that are in the Small Ordinaries benchmark but are considered a ‘large’ company according to their accounting measures that define our portfolio construction. This includes Flight Centre (+18.0%), Iluka (+15.0%) and Sims Metal (+10.1%). February was reporting season in the Australian market and whilst some portfolio performance was more affected by global equity market moves there were many stock specific influences. An overweight to the long suffering Pact Group (+38.3%) was a large contributor at the stock level whilst overweights to mining services firms Macmahon (-17.0%) and Perenti (-12.3%) detracted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-2.pdfJanuary, 2021
The Realindex Australian Small Companies Fund returned -0.25% (net of fees) during January, versus the S&P/ASX Small Ordinaries benchmark which returned -0.25%. Smalls lagged S&P/ASX 200’s gain of 0.31%. After a recent strong period the Small Resources Index closed the month down 1.9% while the Small Industrials Index was up 0.2%.
From a sector perspective, stock selection within Healthcare was a significant value add to relative performance. This largely came from not holding growth stocks PolyNovo (-32.2%) and Nanosonics (-14.8%). In addition overweights to value names Sigma (+7.3%), Japara (+20.2%) and Virtus (+7.9%) added to performance. Similarly the IT sector was also positive driven by not holding Tyro Payment (-21.0%), Audinate (-9.3%) or Megaport (-5.4%). The portfolio benefitted from not holding several companies that are in the Small Ordinaries benchmark but are considered a ‘large’ company according to their accounting measures that define our portfolio construction. This includes IOOF (-11.4%), Flight Centre (-11.2%) and Sims Metal (-9.1%). By far the largest detractor came from not holding Afterpay rival ZipPay (+37.4%). On valuations on the stocks in this ‘buy now, pay later’ space continue to look more extreme as these companies are not expected to make a profit for at least the next 3 years.
Other detractors included not holding Australian Ethical (+39.2%, the best performer in the S&P/ASX 300), Points Bet (+31.5%, given an extra boost by its promotion to the S&P/ASX 200) and an underweight to Bingo (+32.4%, surging after receiving a takeover offer). The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (26.1% discount), price-to-cashflow (6.0% discount), and price-to-book (16.7% discount), as well as a dividend yield higher than the benchmark (32.7% premium).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer-1.pdfJanuary, 2021
File:December, 2020
The Realindex Australian Small Companies Fund returned +13.20% (net of fees) during the December quarter, versus the S&P/ASX Small Ordinaries benchmark which returned +13.83%. Whilst the market returns were positive in each of the three months nearly all the return came in November. Within this strong market was a prominent rotation into Value and domestic cyclical stocks. As a result Value stocks strongly outperformed Growth stocks by 8.3% over the quarter (S&P Australia BMI Value +18.8% vs. Growth +10.4%).
Given the value bias of accounting weighted portfolios it seems unusual that the portfolio has underperformed. However this instance can be attributed to the portfolio’s construction versus the benchmark index. Specifically the portfolio does not hold benchmark stocks that are considered ‘large’ companies according to their accounting measures and most of these Value stocks bounced strongly including Unibail (+110.7%), Fletcher Building (+52.8%), Whitehaven Coal (+57.4%) and Seven Group (+30.3%). Whilst not holding these names hurt performance over the quarter, the absence of these names in the portfolio has seen the portfolio hold up relatively well during the prior strong growth market.
Materials was the largest sector detractor, which came from large rises in smaller metal explorers, consistent with the risk-on market conditions. Given their speculative nature and poor quality of these companies (low/lack of reported earnings and cashflow), the portfolio is very underweight these names including not holding Pilbara Mines (+187.4%) or ioneer (+133.3%) and large underweights to Orocobre (+80.2%) and Galaxy Resources (+98.5%) and Lynas (+71.6%). On the positive side, the portfolio benefited from a large bounce in beaten up value stocks in the aged care industry: Japara (+59.0%), Regis Healthcare (+81.7%) and Estia (+21.7%). Also within healthcare a large underweight to Mesoblast (-55.7%) also contributed to relative performance. Additionally, also benefitting the portfolio were WPP (+98.6%) and Asaleo Care (+34.3%) after both companies experienced takeover offers. Neither stock is in the Small Ordinaries benchmark thus increasing the magnitude of the value add.
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (27.7% discount), price-to-cashflow (13.0% discount), and price-to-book (18.2% discount), as well as a dividend yield higher than the benchmark (33.2% premium).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Individual-Quarterly.pdfNovember, 2020
The Realindex Australian Small Companies Fund returned +9.03% (net of fees) during November, versus the S&P/ASX Small Ordinaries benchmark which returned +10.27%.
The broader Australian market delivered its best month in over 30 years with a prominent rotation into value and domestic cyclical stocks. As a result Value significantly outperformed Growth by 4.4% over the month (S&P Australia SmallCap Value +11.6% vs. Growth +7.2%) however this was far less than the broader market where value beat growth by 8.3%.
Given the value bias of accounting weighted portfolios it seems unusual that the fund underperformed. However this instance can be attributed to the portfolio’s construction versus the benchmark index. Specifically the fund doesn’t hold benchmark stocks that are considered a ‘large’ company according to their accounting measures and most of these Value stocks bounced strongly including Unibail (+75.1%), Fletcher Building (+39.5%), IOOF (+27.4%) and Cimic (+18.9%).
Materials was the largest sector detractor, which came from large rises in smaller metal explorers which was consistent with the risk-on market conditions. Given their speculative nature and low/lack of reported earnings and cashflow the portfolio is very underweight these names including not holding Pilbara Mines (+60.1%) or Ioneer (+54.3%) and large underweights to Orocobre (+61.3%) and Galaxy Resources (+56.4%).
Also detracting was Consumer Discretionary which was especially sensitive to the vaccine news. Performance was lost from overweights to ‘stay at home’ retail stocks including Super Retail (-11.7%) and Adairs (-16.1%) – the two biggest stock level detractors. In addition large underweights to travel related stocks Webjet (+65.3%) and Corporate Travel (+37.0%) also detracted.
On the positive side the portfolio benefited from a large bounce in beaten up value stocks in the aged care industry: Japara (+94.8%), Regis (+69.4%) and Estia (+27.8%).
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (26.0% discount), price-to-cashflow (8.5% discount), and price-to-book (17.1% discount), as well as a dividend yield higher than the benchmark (36.2% premium).
Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 30 November 2020 unless otherwise noted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Realindex-Australian-Small-Companies-Fund-Class-A-Adviser-Flyer.pdfticker: FSF0978AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://www.firstsentierinvestors.com.au/au/en/adviser/our-funds/realindex-investments.html
Realindex Australian Small Companies Dropdown -> Documents -> Monthly Flyer
fund_features:
The portfolio invests in smaller Australian companies by selecting and weighting companies based on fundamental measures of company size.
- Realindex forms a universe of smaller Australian companies based on accounting measures.
- Factors such as quality, near-term value and momentum are applied to form a final portfolio of companies.
- The resulting portfolio has a value tilt relative to the benchmark and provides the benefits of being lower in cost, lower turnover and highly diversified compared to traditional active investment strategies.
- The investment objective is to provide capital and income growth by investing in smaller Australian companies and outperforming the S&P/ASX Small Ordinaries Accumulation Index over rolling five-year periods before fees and taxes.
manager_contact_details: Array
asset_class: Domestic Equity
asset_category: Australian Small Cap
peer_benchmark: Domestic Equity - Small Cap Index
broad_market_index: ASX Index Small Ordinaries Index
structure: Managed Fund