September, 2023
Australian equities fell through September 2023, as investors took a cautious stance during a period where the Australian 10 - year bond yields reached the strongest levels since Oct-2011. The S&P/ASX 200 outperformed the Developed World performance, with a fall of -2.8% in September, while the S&P 500 also fell -4.8% in local currency terms. For the quarter ending September 2023, the S&P/ASX 200 ended down -0.8%. On a sector basis, Energy, Financials, and Consumer Staples outperformed in Australia, and Health Care, IT, and REITs sectors were the relative worst performers during the month. During the quarter ended September 2023, the Lazard Select Australian Equity Fund returned 2.5% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which declined -0.8%.
Contributors to Performance
• Monadelphous (MND) was a contributor to portfolio performance over the current quarter. The company announced several major construction contract awards in the lithium and iron ore segment, bringing the value of secured contracts since the start of FY23 to nearly A$1bn with over half of this post balance date. Monadelphous Managing Director, Zoran Bebic, stated that these contracts represented the first in a new wave of major construction projects to come to market. We continue to remain shareholders in MND, with the view that the medium-term earnings power of the company is higher than its current share price valuations.
• Costa Group’s (CGC) shares performed strongly during Q3 2023, rising around 15% after the board entered a Scheme of Arrangement with Paine Partners for the sale of the company at a price of A$3.20 per share. This price was disappointingly lower than the A$3.50 level discussed few months earlier before CGC’s most recent earnings downgrade.
Detractors from Performance
• Aurizon (AZJ) underperformed in the September quarter after issuing FY24 guidance below market consensus at an Investor Day in July 2023. This was primarily due to AZJ ‘brining forward’ debt refinancing to coincide with the regulatory return reset on the rail network which increased interest expense. The company also faced headwinds form higher bond yields later in the quarter with ‘yield stocks’ generally impacted. We believe that the key driver for the business going forward will be demonstrating growth in the Bulk division, especially on the company owned Central Australian Rail Network. In Q3, the company also signed a short duration iron haulage contract.
• Mayne Pharma (MYX) underperformed in the September quarter after releasing FY23 results that showed that the company had to discount its new oral contraceptive more than anticipated in 2H23. We believe it is a temporary headwind and with a new commercially minded management team, the company may be able to reach its projected net sales estimate for this drug. We are more conservative in our estimates and still believe there is value in MYX at these levels.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-09.pdfAugust, 2023
The S&P/ASX 200 outperformed the Developed World markets performance, falling -0.7% in August 2023. Weakness in Australian equities was mainly on the back of dull guidance from companies through the earnings season. The Australian 10 - year bond yields sold off by 2bps to 4.03%, trading relatively unchanged as the Reserve Bank of Australia (RBA) remained unmoved on the cash rate, however still retained a tightening bias. On a sector basis, Consumer Discretionary, REITs, and Energy outperformed, while Utilities and Consumer Staples sectors were the relative worst performers.
During the month ended August 2023, the Lazard Select Australian Equity Fund returned -1.0% (net of W Class fees), slightly underperforming the S&P/ASX 200 Accumulation Index which returned -0.7%.
Contributors to Performance
• AMP’s share price rose 12% over the month of August 2023, while the index closed lower. This out-performance was driven by a well-received result and the expected expense reduction plans foreshadowed in April 2023. AMP earned 4.2cps in 1H23, disclosed NTA of $1.33ps, has excess capital of $840m and a plan to reduce group costs by a net $120m by the end of 2024. Offsetting these positives, tough mortgage competition is expected to cut the net interest margin (NIM) at AMP Bank over 2H23. Critical future drivers of the value of the group are AMP’s ability to continue to buy back shares at below NTA, the execution of the expense reductions across head office and Master Trusts, returning Wealth to top -line growth and dealing with various legacy legal issues. Over the last three quarters, consensus EPS for AMP has risen 25% relative to ASX200 consensus expectations, but our valuation – based on a sum-of-parts analysis - has not changed much. By end of August, the discount to NAT had narrowed to 5%. We believe that, AMP remains a relatively attractive investment, but is no longer within the top 30 most undervalued opportunities within our Value Rank.
• Bapcor (BAP) announced their results on August 16, 2023 which were in-line with expectations. BAP shares rose 6% over the month, outperforming the ASX200 which declined in August as the market had concerns that BAP may be impacted by the slowing consumer demand in Australia. The largest value driver for BAP remains the ‘Better Than Before’ program, for which management has announced aggressive cost saving targets. If these are mostly realized, we believe there might be a meaningful upside for BAP shares. We remain attracted to BAP’s resilient top line and rational competitive dynamics in key markets with minimal ‘Better Than Before’ upside included in our valuation. We continue to hold BAP shares.
Detractors from Performance
• South32 (S32) underperformed the market in August 2023 as concerns about a slower than expected Chinese economic recovery continued to weigh on sentiment. S32 reported its FY23 result during the month, and while it was broadly in line with consensus, we believe the guidance for FY24 was disappointing. Costs guidance was significantly higher than expected and production growth guidance was also soft. While S32 is investing in growth, these benefits won’t be seen until post FY25. S32 continues to transform its portfolio with 71% of FY23 revenue related to base metals, up from 45% when the business was demerged from BHP almost 10 years ago. In our view, S32 is well positioned to benefit from the significant energy transition demand for base metals in the medium to long term. Despite some near-term headwinds we continue to see S32 as attractively priced.
• WPR moderately underperformed the broader market, falling 5% in August when it reported 1H23 results which were in - line with expectations for modest earnings decline, primarily because of well-timed non-core asset sales. The company remains well-positioned, with full-year FY23 earnings guidance unchanged being flat versus the prior year, with ~3% rent growth offset by the full-year impact of prior asset sales and higher cost of debt. The balance sheet remains strong with gearing at the low end of the 30-40% target range and 93% hedging for FY24, providing significant headroom. We are currently awaiting the competition regulator ACCC’s adjudication of main tenant Viva Energy’s (VEA) acquisition of On the Run (OTR), expected 21 September 2023. This will determine VEA’s rollout of the OTR format across the store network, which could be partially funded by WPR and provide redevelopment returns. WPR currently trades at a 6.6% dividend yield and 15% discount to net tangible assets, providing a good valuation support.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-08.pdfJuly, 2023
Australian equities gained ground in July 2023, lifted by a rally in energy stocks on the back of rising oil prices with the S&P/ASX 200 closing +2.9% for the month. Australian 10-year bond yields sold off by 3bps to 4.05%, trading relatively unchanged as Reserve Bank of Australia's (RBA) July meeting saw the cash rate paused at 4.10%. On a sector basis, Energy was the strongest performer, while Financials and Information Technology also outperformed. The Materials, Consumer Staples, and Health Care sectors were the relative worst performers.
During the month ended July 2023, the Lazard Select Australian Equity Fund returned 4.2% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 2.9%.
Contributors to Performance
• Costa Group’s (CGC) shares performed strongly in July as a non-binding, indicative offer to acquire the company was made public. The approach made by previous owner Paine Partners was at $3.50 per share, a 29% premium to the share price prior to the offer. We believe the corporate interest confirms our view that Costa’s assets have an underlying earnings power materially higher than what has been witnessed in recent reporting periods. While we do not know if a takeover offer will move to a binding arrangement, in our view, the interest from a knowledgeable buyer supports our thesis. We continue to hold CGC shares.
• Monadelphous (MND) was a contributor to portfolio performance over the month. The company announced two major construction contract awards: the supply and construction of an overland conveyor and transfer station at Fortescue’s Christmas Creek mine and works associated with the expansion of Albemarle’s Kemerton Lithium Hydroxide Processing Plant. Monadelphous Managing Director, Zoran Bebic, stated that these contracts represented “the first in a new wave of major construction projects to come to market.” We continue to remain shareholders in MND, with the view that the medium-term earnings power of the company is significantly higher than its share price is currently capitalizing.
Detractors from Performance
• Healius (HLS) was subject to a conditional non-binding offer from another pathology services operator to acquire the company in March 2023, which offered some support to the shares in recent months. However, the stock underperformed the market in July in anticipation and later release of the ACCC’s preliminary finding that the acquisition would likely substantially lessen competition in Australian pathology services. This likely highlighted that the proposed offer might need to be revised before it is considered again. At current levels, we believe there is still value in the stock as the mark et is not yet fully appreciating the recovery in diagnostics volumes and the company’s refocusing initiatives.
• Sky City Entertainment’s (SKC) stock price underperformed the market during the month despite no material news that we were aware of. The company is now looking more attractive and is trading at close to its book value. The last time that SKC was trading at book value was in March 2020, the height of the COVID-19 “bear” market. We suspect the continued weak price performance was due to a recent regulatory inquiry into its Australian competitors Star Entertainment and Crown Resort. This regulatory enquiry unveiled some questionable industry behaviour primarily in the international business. In early July 2022, the South Australian gaming regulator notified SKC that they intend to undertake an independent review of Adelaide operations. We believe casinos are a relatively defensive businesses and we have observed that casinos globally are performing strongly. We continue to be mindful of the regulation risk for SKC, testing potential negative scenarios whilst acknowledging these outcomes cannot be predicted.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-04-3.pdfJune, 2023
Australian equities rallied in June 2023 and closing Q2 2023 in positive territory up by +1% as investors shrugged off recession fears amid a local retail spending rebound and easing of inflation. The S&P/ASX 200 rose +1.8% in June, underperforming the Developed Market World during the month, on softening rate hike expectations. Australian 10 - year bond yields sold off by 0.42bps to 4.02%, as the Reserve Bank of Australia's (RBA) June meeting saw the cash rate hike by 25bps, to 4.10%. On a sector basis, Materials was the strongest performer, while Information Technology, and Financials also outperformed for the month. The Health Care and Communication Services sectors were the relative worst performers.
During the quarter ended June 2023, the Lazard Select Australian Equity Fund returned 3.2% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 1.0%.
Contributors to Performance
• SmartGroup’s (SIQ) share price rose by more than 20% over the quarter. In early April 2023, SIQ announced that former The Star Sydney CEO Scott Wharton would be succeeding outgoing CEO Tim Looi. The company then presented at the Macquarie Conference in May and a provided a positive trading update. There was growth across novated leasing leads, orders, settlements, and yields. In mid-June 23, Eagers Automotive (APE) announced that it had acquired an economic interest of above 5% in McMillan Shakespeare (MMS), the key competitor to SIQ in the salary packaging and novated lease sector. The market has subsequently viewed APE’s strategic investment in MMS as a vote of confidence in the potential growth of the novated lease sector, following recent legislation that provides fringe benefit tax (FBT) exemption to novated leases of electric vehicles below ~A$85,000. SmartGroup (SIQ) may be a key beneficiary of this Government legislation, and we remain shareholders.
Detractors from Performance
• Monadelphous (MND) underperformed the index over the current quarter. Whilst there was no attributable company announcement, a combination of global recession fears, weakening commodity prices, and lack of major contract wins weighed on the share price. We remain shareholders in MND, as we believe its shares are attractively priced. The medium - term backdrop remains positive for MND with strong capex growth projected across various commodities. However, tight labour availability in the industry is proving a short-term headwind to meaningful engineering construction contract wins. Nonetheless, as this normalises, we believe that MND’s earnings power is significantly higher than the current base. MND currently trades on <8x our assessment of normalised EBIT, with is undemanding relative to its long-run average of 10.0x, with upside risk to our earnings forecast. Moreover, the company holds nearly A$200m in net cash.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-04-2.pdfMay, 2023
Australian equities fell through May 2023 with the S&P ASX 200 index closing down -2.5% for the month, on continued rate hike expectations from central banks and concerns around US law makers intentions on the country's debt ceiling. Australian 10-year bond yields sold off by 0.26bps to 3.60%, on the resumption of rate hikes by the Reserve Bank of Australia to 3.85% in the May 2023 meeting. On a sector basis, Information Technology was the strongest performer, while Utilities and Energy also outperformed. The Consumer Staples and Consumer Discretionary sectors were the relative worst performers.
During the month ended May 2023, the Lazard Select Australian Equity Fund returned -2.2% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which declined -2.5%.
Contributors to Performance
• Aurizon’s (AZJ) shares rose 3% during the month outperforming a declining market. Early in the month the company presented at the Macquarie Conference where earnings guidance for the 2023 financial year was confirmed. With an increasing number of earnings downgrades in the market due to an apparent slowing in consumer spending, these earnings were welcomed by the market. We continue to favor Aurizon’s defensive earnings profile, cash generation ability as well as the growth supplement from the Bulk division. We believe the market continues to price the company on very modest expectations, as we continue to hold our positions.
Detractors from Performance
• Mayne Pharma (MYX) underperformed the market in May. Earlier during the month, the company released a Market Update to 3Q’FY23 and announced an on-market share-buyback of up to 10% of the issued share capital. The trading update confirmed the net cash balance and highlighted that all the businesses were now delivering positive EBITDA. Within Women’s Health, Nextstellis is expected to reach breakeven during 1HFY24. Despite the recent share price underperformance in May, the trading update provided comfort to our thesis that MYX is significantly undervalued.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-04-1.pdfApril, 2023
Australian equities rallied over April 2023, as a slowing inflation rate (Q1 -23 headline 7.0% y/y vs 7.8% previously) prompted a reassessment on the need for any further rate hikes from the RBA at that time. The S&P/ASX 200 Index rose +1.9% during the month outperforming the DM World Index, on the back off with strong Australian consumer sentiment underpinned by an RBA interest rate hike pause to 3.60% in April. Australian 10-year bond yields tracked sideways as the cash rate remained unchanged, rallying 4bps to 3.34%. On a sector basis, REITs were the strongest performer, while Information Technology, and Industrials sectors also outperformed on a relative basis. The Energy, Utilities and Materials sectors were the relative worst performing sectors.
During the month ended April 2023, the Lazard Select Australian Equity Fund returned 1.4% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 1.8%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-04.pdfMarch, 2023
The S&P/ASX 200 fell -0.2% during the month of March 2023 and closed Q1 2023 returning 3.5% for the quarter on the back of slowing earnings momentum and continued rate hikes by the Reserve Bank of Australia, raising another +0.25bps to 3.60% during the month of March. Australian 10-year bond yields moved in reaction to slowing inflation, rallying 56bps to 3.30%. During the month, the Materials was the strongest performer, while Communication Services and Consumer Discretionary sectors also outperformed in Australia. The Energy, Financials and REITs sectors were the relative worst performers.
During the quarter ended March 2023, the Lazard Select Australian Equity Fund returned 1.1% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 3.5%.
Contributors to Performance
• Collin’s Foods (CKF) had a strong quarter as the stock rose around 15% in Q1 2023. The strong share market bounce has been led by companies that fell the most in 2022. While we believe CKF is undervalued and expect good returns in the years ahead, the near-term bounce in the CKF share price seems to be consistent with this broader market dynamic.
Detractors from Performance
• Costa’s (CGC) share price fell during the Q1 2023 while the market posted modest gains. The company reported a weak CY22 profit result, in line with expectations. The largest driver of the soft profit result was a lower quality citrus crop which achieved significantly reduced prices. While recovery to normal conditions may result in a significant profit boost the market remains wary after several years of volatile earnings. CGC is also due to appoint a new CEO, adding to the ‘wait and see’ attitude. We note that previous owner Paine Partners bought more shares on market during the quarter which confirms strategic interest in the assets. We continue to believe the earnings power of CGC’s assets is much higher than what we see today and hence continue to hold our positions.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-03.pdfFebruary, 2023
February was a weak month for equities, as company results illustrated waning earnings momentum. The S&P/ASX 200 declined -2.4% during February 2023, as the RBA’s 25bps rate hike to 3.35% placed pressure on the already decelerating economy. Australian 10-year bond yields moved in reaction to tightening monetary policy, selling off 30bps to 3.86%. Commodity prices fell across the board. In Australia, Utilities was the strongest performer, while Information Technology and Industrials also outperformed. The Energy, Financials and Materials sectors were the relative worst performers.
During the month ended February 2023, the Lazard Select Australian Equity Fund returned -2.5% (net of W Class fees), modestly underperforming the S&P/ASX 200 Accumulation Index which declined -2.4%.
Contributors to Performance
• Eagers Automotive (APE) shares rose 20% during February on the back of a strong CY22 result. The key driver of the positive share price response was the above consensus turnover guidance for CY23. With conservative assumptions, APE expect to earn A$9.5-10 bil of turnover which was 4-10% above prior consensus expectations. Management further detailed their expectations that margins will be ‘stronger for longer’ resulting in much larger increases in profit forecasts than the increase in turnover. Beyond 2023, we believe APE is well positioned to prosper in the transition to EVs and the company has a balance sheet that provides flexibility to capitalize on opportunities.
Detractors from Performance
• Monadelphous (MND) underperformed the benchmark in February. At the announcement of its 1H23 result, management flagged that the award of resource construction contracts continues to be delayed due to labour capacity constraints. However, the pipeline of work available remains robust and the resource capex cycle provides a positive medium-term backdrop for MND. In FY23, we forecast that MND will generate the lowest level of revenue in its E&C segment since preFY07. At the current share price of just over A$12, albeit a net cash balance amounting to ~A$2 per share, MND trades on 22 times forecast FY23 earnings. However, we think earnings could nearly double in the medium-term, as along with its maintenance division, which has been a quiet achiever with compound revenue growth of 15% per annum since 2004, MND will grow earnings strongly off this low base once awards are eventually worked through.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-02.pdfJanuary, 2023
Equities rallied over January 2023 off the back of stabilising recessionary expectations and easing rate hike fears after a soft US GDP print. The S&P/ ASX 200 performed strongly rising +6.2% over January, as investors improved their outlook. This was also reflected in bond markets, as the Australian 10-year yield fell by 50bps to 3.55%. On a sector basis, Consumer Discretionary was the strongest performer, while Materials and REITs also outperformed in Australia. The Utilities, Energy an d Health Care sectors were the relative underperformers.
During the month ended January 2023, the Lazard Select Australian Equity Fund returned 3.8% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 6.2%.
Contributors to Performance
• Collin’s Foods (CKF) had a strong January as the share price rose approximately 11.5%. The strong share market bounce has been led by companies that fell the most in 2022. While we believe CKF is undervalued and expect good returns in the years ahead, the near-term bounce in the CKF share price seems to be consistent with this broader market dynamic.
• ANZ Group (ANZ) outperformed over the month of January, despite no material company news. ANZ was the worst performing major bank over 2022, and the rise in January may have been part of the general reversal of prices during the month, which saw the prices of many stocks that had fallen the most of 2022 recover. Some improvement in the perceptions of the economic outlook may also have assisted the upward price movement.
Detractors from Performance
• AMP underperformed during the strong market upside over January 2023, after significant price gains over 2022. AMP announced that Chinese regulatory approval for the transfer of their stake in China Life from Collimate (sold to Dexus) to AMP has been delayed beyond 28 January 2023 and the company thus loses AU$25m (0.8cps) payment from Dexus. AMP is now instead transferring the Collimate assets to Dexus and will retain the legal entity that owns China Life, thus avoiding the need for regulatory approval from China. The company also announced a non-cash (non-NTA) write-down of AU$68m to be taken at the full year 2022 result.
• Aurizon’s (AZJ) share price closed modestly negative in January while the S&P ASX 200 index rose strongly during the month. There was no company specific news during the month, and we look forward to the H1 result in February 2023 to further assess the company’s growth plan for the recently acquitted One Rail asset.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2023-01.pdfDecember, 2022
December 2022 saw equity market decline across the world, as a stronger than expected US GDP print caused investor concerns that central bank interest rates could potentially remain higher longer than expected. The S&P/ASX 200 declined - 3.4% during the month, in response to the RBA's 25bps hike to 3.10%, which was slightly higher than what the markets were pricing in. The S&P/ASX 200 closed the year 2022 with a decline of -1.1%. On a sector basis, Materials was the strongest performer, while Utilities, and Consumer Staples also outperformed in Australia. The Consumer Discretionary, Information Technology and Industrial sectors were the relative worst performers during the month.
During the quarter ended December 2022, the Lazard Select Australian Equity Fund returned 10.4% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 9.4%.
Contributors to Performance
• Rio Tinto’s (RIO) share price rebounded strongly in Q422 as the Chinese government’s push for a reopening of the economy gathers pace. This expectation has helped boost sentiment in the market which boosted commodity prices recently. Iron ore was up more than 15% and the aluminum price recovered more than 5% during the quarter. Consumer confidence in China, however, is still very low and property data continues to be very weak; these are what we view as the key fundamental demand drivers of commodities in China. Fear of recession in the rest of the world will likely also continue to weigh on the broader demand for metals in the near-term. For our RIO valuation we are factoring some headwinds for near-term recession risk. In the medium to long -term, we have a conservative view on iron ore and look to capitalise earnings on our long-term price of US$60/t which is lower than the spot price of over US$110/t. In contrast, we have a more bullish view on RIO’s aluminum business. We see this business as structurally more profitable in the medium to long-term as demand accelerates, driven by the global energy transition, and combined with an underinvestment in supply. RIO is one of the lowest cost aluminum producers with the lowest CO2 intensity globally. Despite near-term earnings headwinds, we see RIO’s current share price as relatively attractive.
Detractors from Performance
• Collins Food Limited’s (CKF) share price fell approximately 18% during Q4 22 post the release of the H1’23 financial results which was announced in November 22. While the profit for the first half of the year broadly met expectations, CKF’s downgraded margin expectations for the full year. Australian margin expectations were downgraded to 15-16% from 16- 17% and European margins are now expected to decline by 2-3% compared to the 1-2% decline initially expected. CKF also expects a slower recovery in margins from current low levels. There was also an impairment of the emergent Taco Bell store network which, while disappointing, is immaterial for the valuation. While this near-term earnings downgrade is disappointing, we note it is solely due to cost pressures and that the top line of the business, indicative of demand, remains robust. Cost pressures should, we believe, ease in time and with pricing initiatives expected to support margins. Crucially, management has not altered their long-term profitability expectations for the business. We remain attracted to CKF’s long term growth profile through store expansion and have increased our position in the company during the quarter.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-12.pdfNovember, 2022
Equities had a strong month in November 2022 following on from a strong performance in October, as Federal Reserve Chair Powell's comments on potentially slowing rate hikes "as soon as December" provided relief to markets. The S&P/ASX 200 outperformed the developed market indices, rising over +6% during November, as investors responded to a more dovish than expected RBA 25bps hike to 2.85% during the month. This was reflected in Australian bond markets, as the Australian 10 -year yield moved down by 23bps to 3.53%. On a sector basis, Utilities was the strongest performer, while Materials, and Health Care also outperformed in Australia. The Communication Services, Financials and Energy sectors were the relative worst performers.
During the month ended November 2022, the Lazard Select Australian Equity Fund returned 4.8% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 6.6%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-11.pdfOctober, 2022
Equities had a strong month during October 2022 on the speculation that central banks are nearing the peak of policy tightening which lifted sentiment in share markets. The MSCI Developed Markets (DM) Index rose 7.5%, and the S&P 500 gained 8.1% in local currency terms. The S&P/ASX 200 gained 6.0% during the month as investors responded to a more dovish than expected RBA’s 25bps hike in the cash rate to 2.60%. This was reflected in Australian bond markets, as the Australian 10 - year yield moved down by 13bps to 3.76%. Meanwhile US yields continued their upward trend, rising 28bps to 4.07%, however speculation of a potential pivot in the Fed's policy path supported risk sentiment. On a sector basis, Financials was the strongest performer, while REITs and Energy sectors also outperformed in Australia. The Consumer, Materials and Health Care sectors were the worst performers.
During the month ended October 2022, the Lazard Select Australian Equity Fund returned 7.1% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 6.0%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-10.pdfSeptember, 2022
The S&P ASX 200 fell -6.2% in September 2022 as investors priced in one of the most aggressive rate hiking cycles since the 1990s from the RBA. Global Equities also struggled on the back of global recession fears and an increasingly hawkish US Federal Reserve (‘the Fed’), with the S&P 500 closing the month down -9.2% in local currency terms. Bond markets also reflected a hawkish outlook, as the Australian 10-year yield sold-off by 29bps to 3.89% following the widely expected RBA's 50bps hike to 2.35% on 7 September 2022. On a sector basis, Materials was the strongest performer, while Energy, and Health Care also outperformed in Australia. The Utilities, REITs and Information Technology sectors were the worst performers.
During the quarter ended September 2022, the Lazard Select Australian Equity Fund returned 4.0% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 0.4%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-09.pdfAugust, 2022
The S&P/ASX 200 closed higher by +1.2% in August 2022 driven by a resilient reporting season where results impressed in a tough environment and outperformed the Developed Markets. Global Equities struggled in August, as hawkish commentary from the Federal Reserve's annual Jackson Hole symposium softened investor sentiment. The S&P 500 lost ground with a fall of -4.1% in local currency terms. Locally, following the RBA's 50bps hike to 1.85% on 3 August 2022, bond markets showed investors pricing a more hawkish outlook, as the Australian 10-year yield sold-off by 54bps to 3.60%. On a sector basis, Energy was the strongest performer, while Materials and Communication Services also outperformed in Australia. The REITs, Consumer Staples and Information Technology sectors were the worst performers.
During the month ended August 2022, the Lazard Select Australian Equity Fund returned 5.0% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 1.2%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-08.pdfJuly, 2022
Global equities rebounded in July 2022, driven by a positive US reporting season and US GDP contraction which softened investor expectations of the steepness of future rate hikes. The MSCI Developed Markets Index rose (+8.0%), driven by a strong month for the S&P 500 which gained (+9.2%) in local currency terms. The S&P/ASX 200 gained +5.7% over July, benefiting from the expectations of a less hawkish Federal Reserve and rising Mining and Energy stocks. On a sector basis, Information Technology was the strongest performer, while REITs, and Financials also outperformed in Australia.
The Materials, Energy and Utilities sectors were the worst performers. The RBA's July meeting hiked the cash rate by 50bps to 1.35%, which was widely expected. This came after larger and earlier than expected hikes of 50bps in June, and 25bps in May. Hence, rates are now further above their pre-COVID peak (0.75%), and the highest level since 2019. During the month ended July 2022, the Lazard Select Australian Equity Fund returned 4.0% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 5.7%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-07.pdfJune, 2022
Following a brief rally in May 2022, global equity markets continued to fall in June as concerns over rising inflation levels, fuelled by higher oil and commodity prices, labour shortages, and ongoing supply chain disruptions weighed on investor sentiment. Australian shares also lost ground in June, with the S&P/ASX 200 falling -8.8% over the month and finishing the 2022 financial year at a loss for only the third time in the last ten years. Central banks have broadly acted in a coordinated fashion to fight inflation, with 45 banks raising rates thus far in 2022, including a 50 basis point rate hike to 0.85% by the Reserve Bank of Australia (RBA). This tightening of monetary policy saw Australian 10-year yields selling off to 3.66%. Against this backdrop, the Utilities and Energy sectors were the strongest performers in Australia over the quarter, whilst the IT, Real Estate and Materials sectors were the worst performers.
During the quarter ended June 2022, the Lazard Select Australian Equity Fund returned -5.2% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which declined -11.9%
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardAustralianEquityFund_FactSheet_2022-06-1.pdfMay, 2022
Global equities had mixed results in May 2022, as the willingness of central banks to shift monetary policy weighed on investor sentiment, while the RBA's first-rate hike since 2010 saw the ASX lose ground. The S&P/ASX 200 relatively underperformed global markets, falling -by 2.6% over May, as investors reacted to the RBA hiking the cash rate by 25bps to 0.35%. Australian 10-year yields also moved in reaction to the tightening monetary policy, selling 22bps to 3.34%. Commodity prices saw mixed trends. Supply chain pressures saw Brent Oil climb US$12 to US$122/bbl. On a sector basis, Materials was the strongest performer, while Utilities and Industrials sectors also outperformed in Australia. The REITs, Information Technology, and Consumer Staples sectors relatively underperformed.
During the month ended Ma y 2 0 22, t h e Lazard Select Australian Equity Fund returned -1 .9 % (n e t of W Class fees), out performing the S& P/ASX 2 00 Accumulation In d ex wh ic h d e cl in ed -2 .6 %.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-05.pdfApril, 2022
April 2022 proved a weak month for global equities, as rising inflation fears fueled concerns of a slowdown in economic growth. The S&P/ ASX 200 declined -0.9% relatively outperforming the developed markets and the S&P 500 which fell (-8.7%) in local currency terms over the month. Bond markets saw material moves as Australian 10-year yields sold-off 30bps to 3.12% as investors priced in aggressive rate hikes beginning at the RBA's May 2022 meeting. On a sector basis, Utilities was the strongest performer while Industrials and Consumer Staples also outperformed in Australia. The Information Technology, Materials and Consumer Discretionary sectors relatively underperformed. During the month ended April 2022, the Lazard Select Australian Equity Fund returned 2.8% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which declined -0.9%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-04.pdfMarch, 2022
The ASX 200 gained +6.9% in March 2022, marking a strong month for Australian equities which was driven by a rally in IT and Energy stocks, as global markets, rose on news of peace talks between Russia and Ukraine. On a sector basis, Information Technology was the strongest performer, while Energy and Materials also outperformed in Australia. The REITs sector relatively underperformed along with the Health Care and Consumer Discretionary sectors. The Australian Federal budget for 2022-23 announced on 29 March 2022 continued the trend of several recent updates which showed a virtuous cycle of very large fiscal stimulus, which reflected the upward momentum seen in both the economy and labor market. Strengthening rate hike outlooks saw material bond selloffs, with Australian 10-year yields surging 69bps to 2.83%. Brent Oil moved up the US $7 to US$108/bbl on continuing geopolitical tensions restricting supply. Iron Ore climbed to US$153/Mt as markets expect robust restocking demand post-COVID-19.
During the quarter ended March 2022, the Lazard Select Australian Equity Fund returned 15.8% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 2.2%
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-03.pdfFebruary, 2022
Global markets struggled in February 2022, as geopolitical tensions saw investors reposition for an uncertain outlook. The S&P/ASX 200 however remained resilient to the global environment, rising 2.1% in February 2022, off the back of a largely positive reporting season. On a sector basis, Energy was the strongest performer, while Consumer Staples, and Materials also outperformed in Australia. While the Technology sector underperformed the most, the Consumer Discretionary and Communication Services sectors also relatively underperformed. Commodity prices saw strong upward moves, particularly in Gold which lifted US$115 to US$1,910/oz as investors repositioned into safe-haven asset classes. Brent Oil also edged higher by US$10 to US $110/bbl as markets reacted to the impacts of sanctions on oil and gas exports.
During the month ended February 2022, the Lazard Select Australian Equity Fund returned 8.5% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 2.1%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-02.pdfJanuary, 2022
After starting the year on the front foot, the ASX 200 lost ground over January 2022, falling a significant -6.4% in AUD terms as rapid bond yields prompted rapid rotations. Global equities fell sharply through January 2022 as investors braced themselves for tighter monetary policy from central banks. The ASX 200 also underperformed against the S&P 500 which dropped -5.2% during the month. On a sector basis, Energy was the strongest performer, while Utilities and Materials also outperformed. The IT sector underperformed the most, Health Care and Consumer Staples also relatively underperformed. During the month, the Lazard Select Australian Equity Fund returned -0.9% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned -6.4%
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2022-01.pdfDecember, 2021
The ASX 200 rose 2.7% in December 2021 and ended the calendar year 2021 with a gain of 17.5%. Materials, Communication Services and Consumer Staples outperformed in Australia during December 2021 and the sectors which underperformed the most were the Energy, Financials and Information Technology. Another year has passed in which COVID-19 has monopolised headlines, with the new ‘Omicron’ variant spreading across the world since early December 2021. Despite the new highs in Australia’s COVID-19 case count, the prevalence of the less severe ‘Omicron’ variant compared to previous strains, is so far proving to be smaller economic drag. Markets, however, displayed persistent immunity to rising case rates, lockdowns, gummed up supply chains, inflation surprises and hawkish pivots from multiple central banks. Despite recent signs of a decline in consumer spending and activity data due to ‘Omicron’, global growth is expected to remain resilient and above potential.
During the quarter ended December 2021, the Lazard Select Australian Equity Fund returned -3.32% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 2.09%
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-12.pdfNovember, 2021
Global equity markets retreated in November 2021 as the emergence of a new COVID-19 variant, ‘Omicron’, and hawkish comments from U.S. Federal Reserve Chair Jerome Powell offset a very strong corporate earnings season. Volatility surged with the uncertainty over the severity and transmissibility of the mutated virus and the efficacy of current vaccines. Inflationary pressures continued, as did labor shortages, supply chain disruptions, and commodity price increases, sending interest rates higher.
The Lazard Global Equity Franchise Fund returned 2.45% (net of fees) during the month of November 2021, underperforming the MSCI World Index which returned 3.61%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-11.pdfOctober, 2021
October 2021 showed general optimism for global equity markets, particularly the developed markets. The S&P 500 climbed 7.0% off the back of a strong U.S. earnings season and relatively low volatility. In comparison, the ASX 200 declined -0.1%, materially underperforming the global developed markets, as the Australian market lags in its pricing of higher-than-expected inflation and tighter monetary policy. This lag was significantly reflected in Australian 10-year bond yields rising 59bps to 2.08%, compared to U.S. 10-year bonds normalising after lifting 24bps in September 2021 to be flat across October 2021. Gold prices held off inflationary concerns and rose US$26 to US$1,769/oz, and Oil also climbed US$6 to US$84/bbl. Iron Ore dipped US$3 to US$108/Mt as China's industrial production growth moderated due to power shortages and production regulations.
During the month, the Lazard Select Australian Equity Fund returned -2.67% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned -0.10%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-10_en.pdfJuly, 2021
Global markets had a mixed result in July 2021, as the Delta strain of COVID-19 spread globally. The ASX 200 rose 1 .1% during the month of July 2021. Rio Tinto (RIO) marked the start of the August 20 21 reporting season by announcing The largest half-year dividend In Australian corporate history at US$9.1bn. Ne w South Wales and Victoria were locked down during July 2021
As the Delta strain continued to spread. Global b on d yields retraced as central bank commentary became dovish on the back of falling inflation expectations. The Materials (+7.1%), Industrials (+4.2%), and Utilities (+1.6%) sectors outperformed in Australia. The sectors which underperformed the most were the IT sector (-6.9%), and Energy (-2.5%). COVID-19 cases globally passed 196 million In July 2021; a material increase from the 181 million accumulative cases that had been registered in June. As the Delta strain continued to spread, NSW extended lockdown by 4 weeks after an already protected stay-at-home order Until 28 August 2021.
During the month, the Lazard Select Australian Equity Fund returned 1 .7% (n e t of W Class fees), outperforming the S& P/ASX 200 Accumulation Index which returned 1 .1%
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-07_en.pdfJune, 2021
Global markets rose in June 2021, including the ASX 200 which rose 2 .3%. The ASX 200 rose 24% this financial year, the strongest in the 1980s. Des pit e strong economic performance, there was a Growth rally in June 2021, assisted by a pullback in Gl oba l & Australia n 10Y bond yields. In Australia, the Information Technology (+1 3.4%), Communication service (+5 .5%), a d REITs (+5.5%) sectors outperformed the most. The Financials (-0 .2%), Materials (+0.3%), and Health Care (+2 .2%) sectors underperformed d the most. Overall global COVID-19 cases passed 181 million in June 2021. The spread of the significantly more contagious Delta variant in countries such as India, Indonesia, the US, and Australia among others has been a matter of concern this month. Mos t parts of Australia had and have been placed under lockdown as the COVID-1 9 Del ta strain continues to spread. Parts of Victoria, Queen's land, New South Wales, and the Northern Territory have bee n place d u n d e r lockdown and state governments attempt to stop the spread of the Delta variant. D u ri n g the quarter, the Lazard Select Australian Equity Fund returned 2 . 5% (net of W Class fees), under performing the S& P /ASX 2 0 0 Ac c umul ation In dex wh ic h re t urned 8 .3%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-06_en-1.pdfMay, 2021
The ASX 200 rose by 2.3% in May 2021, led by the Financials (+5.7%), Consumer Discretionary (+3.5%), and Healthcare (+3.5%) sectors in Australia. The Information Technology (-9.9%), Utilities (- 6.6%), and Energy (-1.76%) sectors underperformed the most. The Australian Federal Budget on 11 May 2021 was materially positive for equities, as the announcement of AU$96 billion in stimulus over 5 years was significantly more than expected. The large injection of money into the economy should see a positive flow through to companies via more consumer spending and business investment. In fact, the biggest item in the Budget, at AU$20.7bn, was for tax breaks that benefit business. COVID-19 re-emerged in Victoria during the latter stages of May 2021. In response to the growing COVID-19 cluster, the Victorian government announced a "seven-day circuit breaker lockdown,” from 27 May 2021 to 3 June 2021. The Victorian government announced a AU$250 million business support package to offset the negative impact of the lockdown on small businesses and casual workers. Overall global cases passed 170 million in May 2021, driven by the continuing COVID-19 situation in India.
During the month, the Lazard Select Australian Equity Fund returned 3.6% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 2.3%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-05_en.pdfApril, 2021
The S&P/ASX 200 Index rose by 3.5% in April 2021 and after a positive close for Q1 2021. The Information Technology (+9.7%), Materials (+6.8%), and Industrials (+4.3%) sectors outperformed, while Energy (-4.9%), Consumer Staples (-2.5%), and Utilities (-1.2%) sectors underperformed the most. Markets rose on the back of better than expected employment data and rising commodity prices. Vaccine rollout and positive commentary around the upcoming budget saw investors anticipate both a stronger economy and a better fiscal position for the government. Despite a COVID scare in Perth which has since subsided, COVID remained relatively under control in Australia. Overall global cases passed 150 million in April, driven by a rapid surge in cases in India. On 27 April, Australia closed all passenger air travel with India at least until 15 May. This was in response to India registering six million new cases in April. The global vaccine supply chain has also been put under pressure due to the rise of COVID cases in India.
During the month, the Lazard Select Australian Equity Fund returned -3.4% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 3.5%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-04_en.pdfMarch, 2021
The S&P/ASX 200 Index rose by 2.4% in March 2021 and returned 4.3% in Q1 2021. The Consumer Discretionary (+7.0%), Utilities (+6.8%), and REITs (+6.6%) sectors outperformed and the sectors which underperformed the most were the Materials (-3.0%) and IT (-2.9%) sectors. On 31 March 2021, it was announced that Greater Brisbane will go into a three-day snap lockdown. The lockdown was in response to Queensland recording ten new cases of COVID-19, four of which were from community transmission. Despite recent cases, Australia wide COVID-19 remained relatively in control in March 2021. Australia's vaccination rate sits well behind many other nations due to vaccine delays, which has seen the federal government revise their predictions. Ever Given, a ship blocking the Suez Canal since 22 February was set free on 31 March 2021. The blocking of the Suez Canal reduced global trade by almost US$9 billion a day (12% of daily global trade). Experts believe at least 60 days will be required for supply chains which have already been struggling with COVID 19 related shortages to completely normalise. During the quarter, the Lazard Select Australian Equity Fund returned 6.4% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 4.3%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-03_en.pdfFebruary, 2021
The S&P/ASX 200 Accumulation Index rose 1.5% in February 2021. The Materials (+7.3%), Financials (+5.2%), and Energy (+2.4%) sectors outperformed and as expected in this rising yield environment, the longer duration Tech sector underperformed the most (-8.9%). The Utilities (-8.0%) and Consumer Staples (-4.6%) sectors also underperformed. The ASX 200 in February 2021 was a tale of two halves. In the first two weeks the focus was on results beats & misses. The market was rewarding stocks that beat due to COVID-19 tailwinds and punished stocks that missed due to COVID-19 headwinds. In the second half of February 2021, the focus was on the impact of rising bond yields on stocks. As a consequence, despite a strong reporting season, the ASX 200 underperformed and was dragged down by the sectors aforementioned sectors. Australian 10- year bond yields rose to 1.88% despite the RBA's commitment to yield curve control and forecast of no cash rate hikes until at least 2024. COVID-19 related restrictions ease throughout Australia, on the back of lower-case counts. Most recently, South Australia removed border restrictions towards Melbourne following the state’s ‘circuit breaker lockdown’, in response to a hotel quarantine related outbreak.
During the month, the Lazard Select Australian Equity Fund returned 3.5% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 1.5%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2021-02_en.pdfJanuary, 2021
The S&P/ASX 200 Accumulation Index rose by 0.3% during the month. Consumer Discretionary (+4.7%), Communication Services (+2.7%), and Financials (+2.2%) outperformed, whilst REITs (-4.1%), Industrials (-3.0%) and Healthcare (-1.8%) underperformed. COVID-19 news continued to dominate investor behaviour as global COVID-19 cases passed 100 million in January 2021. A slow rollout of the new vaccines coupled with the emergence of several new, more infectious strains added to anxiety and locked down the United Kingdom. On 31 January 2021, NSW marked its second week of zero locally acquired COVID-19 cases. Contrastingly, Western Australia announced a fiveday period of emergency mobility restrictions after the reported detection of one case of the UK variant in the community. The United States saw a transition in Presidency as Joe Biden was sworn in as the 46th President of the United States on 20 January 2021, but only after a riot, and a second impeachment of former President Trump highlighted the sharp divide in the country.
During the month, the Lazard Select Australian Equity Fund returned -1.7% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 0.3%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardAustralianEquityFund_FactSheet_2021-01_en-1.pdfDecember, 2020
The S&P/ASX 200 Accumulation Index rose 1.2% in December 2020 and leading global peers for the quarter. The Materials sector was the clear top contributor in December 2020 (+1.7%), followed by Info Tech (+0.4%). Health Care (-0.6%) detracted the most from performance during the months. The ASX 200 rose in 2020, closing 1.4% higher at 6587 pts. Materials sector was the top contributing sector in 2020, followed by Info Tech. CY20 has been like no other, a year dominated by crisis and response.
The ASX 200 fell 36% peak to trough (and bounced ~50%) as containment measures and social distancing effectively stalled activity. Victoria's second-wave virus experience, in hindsight, marked the inflection of Australia's cycle response and recovery path. Durability was extended to crisis support, while growth stimulus was given a multi-period extension window. The introduction of two more vaccines to inoculate against COVID-19 provided increasing hope that the end of the global pandemic was in sight, despite the challenges in administration and a sharp increase in worldwide cases. During the quarter, the Lazard Select Australian Equity Fund returned 20.6% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 13.7%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2020-12_en.pdfNovember, 2020
The S&P/ASX 200 Accumulation Index rose 10.2% in November 2020 led by cyclicals, recording its best month in 32 years. Markets rose on COVID-19 vaccine news, US election results on 3 November 2020 in which Biden was declared the 46th president elect of the United States and the Reserve Bank of Australia’s quantitative easing (QE)/rate cut related optimism.
On 3 November 2020, the RBA announced its new A$100bn QE program that over the next 6 months, they will buy $100bn worth of government bonds with maturities of 'around 5 to 10 years.' Alongside the QE program, the RBA also announced a rate cut, as they reduced the cash rate from 25bps to 10bps. In Australia, the value sectors, Energy (+28.5%), Financials (+16.1%) and Communication Services (+13.6%) outperformed, while the defensive Consumer Staples (-0.7%), Utilities (1.5%) and Healthcare (2.7%) underperformed.
During the month, the Lazard Select Australian Equity Fund returned 17.2% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which returned 10.2%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardSelectAustralianEquityFund_FactSheet_2020-11_en.pdfOctober, 2020
The S&P/ASX 200 Accumulation Index rose 1.9% in October 2020 likely driven by Federal Budget related optimism. Information Technology, Financials and Consumer Staples sectors outperformed, while Industrials, Utilities and Materials sectors underperformed. The 2020 Federal Budget delivered a much larger than expected fiscal stimulus. The 2020-21 budget balance was downgraded to a record A$214bn (or 11% of GDP, the largest deficit since WWII). The combined fiscal stimulus (including State Governments) is now up to circa A$343bn or 17% of annual GDP over 4 years. This is among the world’s largest and compares with global stimulus totaling to circa 5% of global GDP in 2020. Global markets retreated through October 2020, driven by fading stimulus expectations, weak US tech results and rising COVID-19 cases. On 27 October 2020, Victorian Premier Daniel Andrews announced the reopening of Victoria from 112 days of lockdown. There are now no restrictions on Victorians for leaving their homes. Downward trend of COVID cases in Australia has led to reduction in border restrictions.
During the month, the Lazard Select Australian Equity Fund returned 1.0% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 1.9%.
ticker: LAZ0013AU
commentary_block: Array
factsheet_url:
release_schedule: Monthly
fund_features:
Lazard Select Australian Equity Fund is a highly concentrated portfolio that will hold between 12 and 30 companies. It is a high conviction portfolio with high active share and low beta characteristics over time. The Fund’s objective is to achieve total returns (including income and capital appreciation and before the deduction of fees and taxes) that exceed those of the S&P/ASX 200 Accumulation Index by 5% per annum over rolling five-year periods.
- Asset allocation: Australian securities (95% – 100% ), the Fund may also invest up to 10% in the equities of companies listed on the New Zealand Stock Exchange, Cash( (0% – 5%).
- If these securities are denominated or pay dividends in a currency other than Australian dollars, the Fund will not generally hedge the currency exposure back to Australian dollars.
- High risk/return level.
manager_contact_details: Array
asset_class: Domestic Equity
asset_category: Australia Large Value
peer_benchmark: Domestic Equity - Large Value Index
broad_market_index: ASX Index 200 Index
structure: Managed Fund