September, 2023
As at 30 September 2023, the Fund is invested in 32 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 80.7% of assets and 19.3% of Fund assets were invested in cash deposits.
As at 30 September 2023, the Fund’s aggregate forward yield continued to look attractive at 5.1%, or 5.5% when “grossed - up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 4.10%. The RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” ended the month at 3.6%.
September 2023 saw 15 dividend payments and eight ex-dates.
Charter Hall Group (CHC) is a property funds management company with a solid track record of growing FUM across a range of diversified asset classes. As of 30 June 2023, CHC manages $71.9bn of property FUM, with a group FUM of $87.4bn, inclusive of $15.6bn from its PIM Partnership, generating earnings via co -investment income, property development and funds management fees. Despite recent weakness in the commercial property market, CHC managed to grow its property FUM by 10% in FY23. CHC has minimal net debt at the parent company level and in our view has substantial investment capacity for growth opportunities. The stock is currently trading on a 4.7% dividend yield, and FY24 guidance is for 6% yoy growth in distributions.
Looking ahead, we expect two dividend receipts in October 2023.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2023-09.pdfAugust, 2023
As at 31 August 2023, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 78.9% of assets and 21.1% of Fund assets were invested in cash deposits.
As at 31 August 2023, the Fund’s aggregate forward yield continued to look attractive at 4.8%, or 5.8% when “grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 4.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.90% and 3.20%, respectively.
August 2023 saw four dividend payments and eleven ex-dates.
Bapcor (BAP) is a leading auto aftermarket supplier in Australia and New Zealand. This market is generally less cyclical from a demand perspective and has a history of rational competitors’ behavior, both of which support cash flows and dividends. While BAP’s near-term dividend is modest with a net yield of just under 4%, our assessment of sustainable yield is much higher as we expect dividends to grow at a high-single digit rate over the next few years. We believe that this growth could be supplemented if the management’s cost and efficiency program, “Better Than Before’ is successful. Minimal success of this program is currently factored into BAP’s stock return and dividend expectations and in our view makes the company a candidate for an improved outlook.
Looking ahead, September 2023 will be busy with ten dividend receipts expected.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2023-08.pdfJuly, 2023
As at 31 July 2023, the Fund is invested in 30 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 74.7% of assets and 25.3% of Fund assets were invested in cash deposits.
As at 31 July 2023, the Fund’s aggregate forward yield continued to look attractive at 4.8%, or 6.0% when “grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 4.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.90% and 3.20%, respectively.
July 2023 saw two dividend payments and two ex-dates.
Collin’s Foods (CKF) reported their FY23 annual result in June 23 which modestly beat expectations due to robust top line growth. It appears the margin impact from cost inflation is peaking with lower costs to boost margins later in FY24 and into FY25. The company is executing well on scaling up the Netherlands business which may lead to higher margins over time in that business. The market responded positively to the solid top line growth in a challenging consumer environment and is beginning to appreciate the long-term growth potential in the European business. While the near-term dividend yield on offer is modest at approximately three percent, our assessment of the long -term sustainable yield is higher with a solid double-digit CAGR in dividends expected over the near term.
Looking ahead, Aug 2023 will see three dividend receipts.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2023-07.pdfJune, 2023
As at 30 June 2023, the Fund is invested in 28 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 72.3% of assets and 27.7% of Fund assets were invested in cash deposits.
As at 30 June 2023, the Fund’s aggregate forward yield continued to look attractive at 4.6%, or 5.8% when “grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 4.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.65% and 3.05%, respectively.
June 2023 saw two dividend payments and one ex-date.
Metcash (MTS) will go ex-dividend in July 2023 paying 11 cents per share after reporting FY23 results in late June, taking the full year dividend yield to 6% (8.5% including franking). Today, the business is roughly 40% Hardware, 40% Food Wholesale and 20% Liquor Distribution by profits. Metcash is coming off two years of strong profit growth and in our view is likely to see earnings and dividends stabilize going forward. The drivers of this moderation are the unwinding of the ‘shop local’ trend that was seen during COVID-19 and a moderation of the renovation boom over the same period. That said, we view the current dividend as sustainable and on a 12x P/E we believe the slower near-term earnings outlook is arguably priced into the shares. Longer term we believe there will be further growth primarily in the Hardware division which may grow earnings and dividends. We continue to hold MTS in the Fund.
Looking ahead, July 2023 will be a quiet month on the dividend front with two dividend receipts expected.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2023-06.pdfMay, 2023
As at 31 May 2023, the Fund is invested in 29 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 73.6% of assets and 26.4% of Fund assets were invested in cash deposits.
As at 31 May 2023, the Fund’s aggregate forward yield continued to look attractive at 4.8%, or 6.0% when “grossed-up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 3.85%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.45% and 2.90%, respectively.
May 2023 saw one dividend payment and four ex-dates.
Elders (ELD) is an Adelaide headquartered company which is engaged in providing financial, real estate services to rural, agricultural, and automotive businesses. ELD’s share price fell substantially in May 2023 as the company reported the profitability was retracing from cyclical high levels. Post the result, and at the current lower share price levels, we view ELD as attractively priced on more modest assumptions. We expect the company to pay a dividend yield of more than 5% from a modest payout ratio of 60%. While the company is cyclical, we are attracted to the underlying earnings growth from internal initiatives including network expansion, backward integration in chemicals, systems enhancement, and modernization as well as the new wool DC investment. As these projects come through, we expect both earnings and dividends to benefit.
Looking ahead, June 2023 will be a quiet month on the dividend front with two dividend receipts expected.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2023-05.pdfMarch, 2023
As at 31 March 2023, the Fund is invested in 28 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 75.0% of assets and 25.0% of Fund assets were invested in cash deposits.
As at 31 March 2023, the Fund’s aggregate forward yield continued to look attractive at 5.0%, or 6.5% when “grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 3.60%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.45% and 2.90%, respectively.
March 2022 saw eleven dividend payments and fifteen ex-dates.
Smartgroup (SIQ) outperformed the broader market over the quarter, its share price up ~26%. After a number of consecutively soft or disappointing updates, such as the loss of the DETVIC contract, SIQ reported a relatively uncontroversial CY22 result. Market expectations were low prior to the result, with SIQ trading on only 11x sustainable earnings. The concurrent announcement that CEO Tim Looi would be retiring is a signal that the Board is taking a proactive stance to improve the operational performance of the business. Whilst SIQ’s share price has re -rated, it still only trades on 13.5x sustainable earnings, an undemanding multiple for a highly cash-generative business with a strong balance sheet. Our thesis is centered on the normalization of vehicle supply driving a normalization in SIQ earnings. A positive long -term valuation driver that we have not yet factored in is Government legislation to encourage electric vehicle (EV) uptake via tax benefits through novated leases. The UK exhibited a strong increase in EV uptake when similar Government legislation were enacted, and this has benefited salary packaging and novated lease providers such as SIQ. We maintain the view that SIQ is an attractive investment proposition. The prospective dividend yield is 7.4%, fully franked, with typically a 100% payout of annual NPAT.
Looking ahead, April 2023 will be a busy month on the dividend front with nine dividend receipts expected.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2023-03.pdfFebruary, 2023
As at 28 February 2023, the Fund is invested in 29 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 70.0% of assets and 30.0% of Fund assets were invested in cash deposits.
As at 28 February 2023, the Fund’s aggregate forward yield continued to look attractive at 5.0%, or 6.5% when “grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 3.35%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.25% and 2.80%, respectively.
February 2022 saw one dividend payment and six ex-dates.
Suncorp (SUN) went ex-div in February 2023. The stock performed well in late 2022 and has continued into 2023 on the back of a strong H1’23 result. We are attracted to Suncorp’s solid 6% dividend yield which is predominately funded from the stable general insurance business. We believe that this stability gives us the confidence that the high dividend yield ca n be maintained. In our view, strong premium growth of more than 10% as reported in the H1’23 result means investors can also expect modest growth in dividends.
Looking ahead, March 2023 will be a busy month on the dividend front with six dividend receipts expected.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2023-02.pdfJanuary, 2023
As at 31 January 2023, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 75.9% of assets and 24.1% of Fund assets were invested in cash deposits.
As at 31 January 2023, the Fund’s aggregate forward yield continued to look attractive at 5.4%, or 6.7% when “grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 3.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.10% and 2.70%, respectively.
January 2022 saw one dividend payment and no ex-dates.Atlas Arteria (ALX) was added back to the portfolio recently. We sold the previous ALX positions in June 2022 for around A$8.1 per share in a corporate action. Since then, the share price has fallen due to a large equity raising to fund the acquisition of The Chicago Skyway and as a result of the increase in global interest rates. We repurchased our holding in ALX at A$6.8 in Dec 2022. ALX has economic stakes in five toll roads with APRR in France and Skyway responsible for most of its valuation and cash flows. As an owner of mature toll roads ALX offers a reliable ~6% dividend yield with reliable modest growth. We believe this yield is attractive in the current environment.
Looking ahead, February 2023 will be a quiet month on the dividend front with one dividend receipt expected.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2023-01.pdfDecember, 2022
As at 31 December 2022, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 75.9% of assets and 24.1% of Fund assets were invested in cash deposits.
As at 31 December 2022, the Fund’s aggregate forward yield continued to look attractive at 5.6%, or 7.3% when “grossedup” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 3.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.10% and 2.65%, respectively.
December 2022 saw three ex-dates and six dividend payments.
The Fund holds a position in Aristocrat Leisure (ALL). ALL was significantly de-rated early in the year with the share price falling from A$50 at the start 2022 to a low of A$30 in May 2022. The multiple has fallen with the growth selloff and some in the market were expecting a downgrade from the digital business which was backed by a strong COVID-19 induced performance. The actual FY22 results released in November were largely in line with market expectations, underpinned by a strong land-based gaming slot business in the US. Gaming (slot machine) revenue and earnings from the Americas region are up about 30% and 40% respectively, significantly above its pre-COVID-19 levels. This reflected in record market share in the US. Digital results were not as bad as market feared and revenue was largely flat from a record year in 2021, but still achieving a mid-single digit growth in earnings. At the group level about 75% of revenue is from recurring sources making the business less cyclical than was the case historically. ALL is trading on a dividend yield over 2% on a modest payout ratio and is likely to grow along with its earnings. Shareholder returns have also been topped up with a A$500m on market share buyback. The business is currently generating very strong cashflow and is in a strong net cash position. This cash position provides optionality to either grow the business or return more capital to shareholders.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/LazardDefensiveAustralianEquityFund_FactSheet_2022-12.pdfNovember, 2022
As at 30 November 2022, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 75.0% of assets and 25.0% of Fund assets were invested in cash deposits.
As at 30 November 2022, the Fund’s aggregate forward yield continued to look attractive at 4.9%, or 6.3% when “grossedup” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 2.85%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 2.10% and 2.65%, respectively. November 2022 saw five ex-dates and two dividend payments. Reliance Worldwide (RWC) is a leading manufacturer and supplier of water flow, control and monitoring products for the plumbing and heating industry. RWC’s core product is ‘behind the wall’ push-to-connect (PTC) plumbing fittings, with leading positions in the UK, North America and Australia. RWC was a pandemic beneficiary as a combination of lockdown restrictions and government stimulus provided a volume boost, especially in the US. With interest rates now racing up globally, and the recessionary impact that this may entails, RWC has already started to see a softening in volumes across key markets, albeit, off a high base. Cost inflation has also been a short-term adversary, though is expected to alleviate through the rest of this fiscal year. Importantly, RWC has a predominant exposure to the less discretionary repair and maintenance market. Whilst we are cognisant that short-term factors may be volatile in this environment, we believe RWC presents an attractive investment proposition on a ‘through the cycle’ basis. The prospective dividend yield is around 3.3%, with partial franking of 10-20% given its geographic exposure, with an intended payout range of 40-60% of annual NPAT. Looking ahead, December 2022 will be a busy month on the dividend front with five dividend receipts expected.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/193258222.pdfSeptember, 2022
As at 30 September 2022, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 79.5% of assets and 20.5% of Fund assets were invested in cash deposits.
As at 30 September 2022, the Fund’s aggregate forward yield continued to look attractive at 5.1%, or 6.7% when “grossed - up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 2.35%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 1.00% and 1.35%, respectively
September 2022 saw ten ex-dates and fifteen dividend payments.
Whitehaven Coal’s (WHC) share price continued to outperform the market during the Q3 2022, underpinned by elevated global coal prices and a record full year result. Benchmark Newcastle (NEWC NAR 6,000 kcal/kg) coal was average over US$420/t during the quarter, more than doubled compared to 12 months ago and was 15% higher compared to June quarter. There is typically a 6 to 9 months lag between spot price and the realised price achieved by WHC, meaning the high prices will likely continue to flow through into WHC’s earnings over the next 12 months. The backdrop for the global coal market continues to be very supportive in the short to medium term. Europe’s embargo of Russia coal imports commenced on August 10 and supply from the two largest seaborne exporters, Australia and Indonesia, remains very tight as ‘La Nina’ brought an extended period of rainfall which has impacted coal production and logistics. At current spot coal prices, the stock is trading on over 50% FCF yield and is sitting on a net cash position. Strong capital management is underway with management looking to finish the current A$550m buyback before the end of the year and will seek shareholder approval for further buyback of 25% of its outstanding shares. Our valuation captures the near-term strength in coal prices but remains anchored to our long-term coal price assumptions of US$85/t for NEWC 6,000kcal/kg. On this basis, WHC is still looking relatively attractive. We continue to believe shareholders will be increasingly rewarded with higher dividend payments and share buybacks in the near term. WHC is trading on a dividend yield of almost 9% based on latest market forecast. Shareholder returns have also been topped up with a on market share buyback of 10% of its total issued shares, which is expected to finish before its AGM later in the month. The board has put through an AGM resolution looking for shareholder approval to buyback another 25% of its remaining shares on issues. All these initiatives should, we believe, continue to support the share price and increase the dividend per share on remaining shares assuming stable earnings in the near-term.
Looking ahead, October 2022 will be a quiet month on the dividend front with three dividend receipts expected.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/192060461.pdfAugust, 2022
As at 31 August 2022, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 81.4% of assets and 18.6% of Fund assets were invested in cash deposits.
As at 31 August 2022, the Fund’s aggregate forward yield continued to look attractive at 4.9%, or 6.3% when “grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 1.85%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 0.80% and 1.20%, respectively.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/190873800.pdfJuly, 2022
As at 31 July 2022, the Fund is invested in 30 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 80.1% of assets and 19.9% of Fund assets were invested in cash deposits.
As at 31 July 2022, the Fund’s aggregate forward yield continued to look attractive at 4.8%, or 6.4% when “grossed-up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 1.35%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 0.80% and 1.15%, respectively.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/190038494.pdfMay, 2022
As of 31 May 2022, the Fund Invested In 32 companies that meet the criteria of a dividend yield above the cash rate, capital appreciation potential, and sustainability of the dividend. Given between 1 % and 3 % of Fund assets will be invested in each qualifying company at month end, listed hare s accounted for 8 1 .6 % of assets and 1 8.4% of Fund assets we reinvested in cash deposits.
As a t 31 May 2022, the Fund’s aggregate forward yield looked attractive at 4 .0%, or 5 .2% when “ grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate of 0 .35% at month end. The two RBA measurements of t e rm deposit rates in the Australian market the “ Average Rate (all terms)” and the “ Special Rate (all terms)”, ended the month at 0 .30 % and 0 .50 %, respectively.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/187900322.pdfApril, 2022
As at 30 April 2022, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 84.1% of assets and 15.9% of Fund assets were invested in cash deposits.
As at 30 April 2022, the Fund’s aggregate forward yield continued to look attractive at 4.0%, or 5.4% when “grossed -up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 0.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 0.15% and 0.20%, respectively.
This means the expected annual yield from the Fund is 3.9% above the month-end RBA cash rate and at a 5.3% premium on a “grossed-up” basis. The Fund’s expected excess yield over the RBA “Special Rate (all terms)” index is 3.8% and 5.2% on a “grossed-up” basis (with the Fund’s yield premium over the RBA “Average Rate” obviously higher).
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/186645380.pdfMarch, 2022
As at 31 March 2022, the Fund is invested in 31 companies that meet the criteria of a dividend yield above the cash rate, capital appreciation potential, and sustainability of the dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month-end, listed shares accounted for 82.9% of assets, and 17.1% of Fund assets were invested in cash deposits.
As at 31 March 2022, the Fund’s aggregate forward yield continued to look attractive at 4.4%, or 5.8% when “grossed up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 0.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 0.15% and 0.20%, respectively.
This means the expected annual yield from the Fund is 4.3% above the month-end RBA cash rate and at a 5.7% premium on a “grossed-up” basis. The Fund’s expected excess yield over the RBA “Special Rate (all terms)” index is 4.2% and 5.6% on a “grossed-up” basis (with the Fund’s yield premium over the RBA “Average Rate” obviously higher).
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/185997143.pdfFebruary, 2022
As at 28 February 2022, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 82.0% of assets and 18.0% of Fund assets were invested in cash deposits.
As at 28 February 2022, the Fund’s aggregate forward yield continued to look attractive at 4.0%, or 5.0% when “grossed-up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 0.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 0.15% and 0.20%, respectively.
This means the expected annual yield from the Fund is 3.9% above the month-end RBA cash rate and at a 4.9% premium on a “grossed-up” basis. The Fund’s expected excess yield over the RBA “Special Rate (all terms)” index is 3.85% and 4.80% on a “grossed-up” basis (with the Fund’s yield premium over the RBA “Average Rate” obviously higher).
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/185154576.pdfJanuary, 2022
As at 31 January 2022, the Fund is invested in 31 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualifying company at month end, listed shares accounted for 86.0% of assets and 14.0% of Fund assets were invested in cash deposits.
As at 31 January 2022, the Fund’s aggregate forward yield continued to look attractive at 3.9%, or 5.1% when “grossed-up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 0.10%. The two RBA measurements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 0.15% and 0.25%, respectively. This means the expected annual yield from the Fund is 3.8% above the month-end RBA cash rate and at a 5.0% premium on a “grossed-up” basis. The Fund’s expected excess yield over the RBA “Special Rate (all terms)” index is 3.65% and 4.85% on a “grossed-up” basis (with the Fund’s yield premium over the RBA “Average Rate” obviously higher).
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/183931661.pdfAugust, 2021
As of 31 August 2021 , the Fund has invested In 33 companies that meet the criteria of a dividend yield above the cash rate, capital appreciation potential, and sustainability of the dividend. Given between 1 % and 3 % of Fund asset s will be invested in each qualifying company at month-end, listed shares accounted for 90.5 % of asset s and 9.5% of Fund assets were invested in cash deposits.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/179260023.pdfMarch, 2021
As at 31 March 2021, the Fund is invested in 32 companies which meet the criteria of a dividend yield above the cash rate, capital appreciation potential and sustainability of dividend. Given between 1% and 3% of Fund assets will be invested in each qualif ying company at month end, listed shares accounted for 90.6% of assets and 9.4% of Fund assets were invested in cash deposits. As at 31 March 2021, the Fund’s aggregate forward yield continued to look attractive at 3.8%, or 4.5% when “grossed-up” for franking credits and tax deferral benefits*. This can be compared to the RBA annual cash rate at month end of 0.10%. The two RBA measu rements of term deposit rates in the Australian market, the “Average Rate (all terms)” and the “Special Rate (all terms)”, ended the month at 0.20% and 0.30%, respectively. This means the expected annual yield from the Fund is 3.7% above the month-end RBA cash rate and at a 4.4% premium on a “grossedup” basis. The Fund’s expected excess yield over the RBA “Special Rate (all terms)” index is 3.5% and 4.2% on a “grossed-up” basis (with the Fund’s yield premium over the RBA “Average Rate” obviously higher). March saw nine ex-dates and ten dividend payments. Reliance Worldwide (RWC) is a leading manufacturer of plumbing & heating products and technologies, with operations spanning across North America, the UK and Asia Pacific. RWC’s core products are its brass and plastic behind-the-wall push-to-connect plumbing fittings, manufactured in Australia, the US and the UK. RWC has been a ‘COVID-19 beneficiary’ over the past twelve months, particularly in the US, where home repair and maintenance activity has benefitted strongly from stay-at-home orders, travel restrictions, and Government stimulus. Whilst this short-term demand theme is not central to our investment thesis, it does support RWC’s non-discretionary defensive characteristics. RWC’s distribution partners in key markets have generally been considered ‘essential service’. As at 1H21, RWC has generated constant currency sales growth of 20%+ in the Americas, 10%+ in Asia Pacific, and 10%+ in EMEA. Meanwhile, we believe the harsh US winter freeze in January /February 2021 should further support demand for RWC’s products. Prior to the FY20 result release, consensus FY22 EPS was 18c and this has increased to 22c following a revision of sell-side analyst estimates. The P/E multiple on FY22 earnings, meanwhile, has expanded from ca. 15.5x to ca. 21.0x on the market’s higher level of confidence regarding RWC’s defensive characteristics and growth profile. RWC is projected to pay a full year dividend of 11.0cps (consensus average), which is within its target payout policy of 40-60% of NPAT. Looking ahead, April will be a busy month on the dividend front with six dividend receipts expected. The investment strategy of the Fund is to provide investors with access to companies listed on the Australian Securities Exch ange that Lazard believes offer sustainably high dividends and capital appreciation potential. The large economic impact from COVID -19 both in Australia and globally, will we believe, impact dividends of many companies in the shorter term, including some of those held in the Fund. In this environment, we will however continue to seek to invest in companies that we believe offer sustainably high div idends and capital appreciation potential over a full market cycle.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/170123005.pdfasset_class:
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manager_contact_details: Array
ticker: LAZ0022AU
release_schedule: Monthly
structure: Managed Fund
commentary_block: Array
factsheet_url:
fund_features:
The Fund seeks to achieve: • reduced exposure to S&P/ASX200 Accumulation Index drawdowns; • a total return that exceeds the Reserve Bank of Australia Cash Rate; and • an income return at a premium to the S&P/ASX200 Accumulation Index dividend yield. The investment strategy of the Fund is to provide investors with access to companies listed on the Australian Securities Exchange that Lazard believes offer sustainably high dividends and capital appreciation potential.
- The number of stocks will generally range from 0 to 50, which means Lazard makes active investment decisions as to which stocks the Fund holds.
- The Fund may reallocate capital from equities towards Cash investments, up to 100%, as cash yields rise and / or dividend yields fall or when in our opinion equities appear to be over-priced, so reducing the number of equities that qualify for inclusion in the Fund.
- The Fund may hold a position of generally up to 3% in any one company at the time of purchase (except in the event of a corporate action).
- Given the nature of the Fund, Lazard considers it important to avoid derivatives which will not be used in this Fund during the life of this PDS. The Fund may also invest in initial public offerings which are expected to be listed within 3 months from the date of purchase