September, 2023
• The Fund returned -1.91%, net of fees, in September 2023, compared with a return for the Benchmark of -3.77%, with the US Federal Reserve signalling the possibility of further interest rate increases and maintaining “high levels for longer”.
• Energy was the only sector to contribute to Benchmark performance for the month, with all other sectors detracting in unhedged terms. For the Fund, the largest relative sector contributors were holdings in Consumer Discretionary, such as eBay, and an overweight to the Health Care sector. Relative detractors included holdings in Financials, including AIA Group, and a lack of exposure to the energy sector.
• Takeda Pharmaceutical was among the top individual contributors to performance in September. The company has been supported by positive developments in its pipeline including positive topline results from a Phase 2b study for its treatment of active psoriatic arthritis. The share price was up modestly in local currency terms, which, against choppy equity markets, resulted in outperformance.
• NextEra Energy was among the top individual detractors from performance in September. Following the announcement of the sale of Florida City Gas to Chesapeake Utilities for $923 million (USD), NextEra Energy Partners, LP, a subsidiary of NextEra Energy, announced that it was lowering the limited partner distribution per unit growth rate to 5-8% through to 2026 versus previous guidance of 12-15%. The change was mainly driven by tight financial conditions that put pressure on the growth prospects of NextEra Energy Partners. Following the announcements, NextEra Energy’s stock price fell around 20% over 4 days. Mirova believe that the investment case of NextEra Energy is still valid in spite of the short-term challenges. NextEra Energy continues to be very well positioned to pursue the growth opportunities in both the unregulated renewable energy and regulated utility business in Florida. NextEra Energy has a strong track record on execution over more than a decade and a solid balance sheet. Its valuation has become very attractive after its recent selloff.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-2-1.pdfAugust, 2023
• The Fund returned -4.00%, net of fees, in August 2023, compared with a return for the Benchmark of -1.85%, with market activity remaining resilient in the US but softening in Europe and China, as a result of weak macroeconomic conditions.
• The IT, Health Care and Energy sectors made the largest contributions to a positive month for the index in unhedged terms. For the Fund, the largest relative sector detractors included holdings in Financials, such as Capital One Financial and Webster Financial, and holdings in Consumer Discretionary, including Canadian Tire, Sally Beauty Holdings and Crocs. Notable relative contributors included holdings in Energy, led by Marathon Petroleum.
• Horizon Therapeutics and Marathon Petroleum were among the top individual contributors in August. Shares in Horizon, which develops and commercialises orphan drugs, rose during the month after the US Federal Trade Commission (FTC) approved its acquisition by Amgen. During 2022, Amgen announced its intention to acquire Horizon for US$27.8 billion, but was subsequently blocked by the FTC over anti-competition fears. Last month the FTC and Amgen reached a deal allowing the acquisition to go through. With Horizon trading close to the acquisition price with limited upside potential, Polaris sold its position during the month. Marathon Petroleum reported earnings in early August, beating EPS estimates, with reported crude capacity utilisation at 93%, above guidance of 91%.
• Lundin Mining and Canadian Tire were among the top individual detractors in August. Shares in Lundin Mining fell following leadership departures that have interrupted the Toronto-based miner as it navigates a return to its Vancouver home territory. Three senior vice presidents on the executive leadership team are stepping down as the company approaches a September deadline to relocate its headquarters to Canada’s west coast. Canadian Tire's retail sales declined 0.1% in Q2 2023, impacted by softening consumer demand, particularly in Ontario, and a mix shift towards more essential and value offerings. Management withdrew its previous four-year (2022-2025) financial guidance, given the slowdown in retail.
• During the month, Polaris completed the final sales of Horizon Therapeutics, as noted above, and Carter’s Inc. Carter’s was sold on weaker infant population numbers and the shift in customer preferences regarding branded baby products.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-1-2.pdfJuly, 2023
• The Fund returned 4.39%, net of fees, in July 2023, compared with a return for the Benchmark of 2.84%, as value stocks outpaced their growth counterparts amid a rebound in Financials and Materials and relative slowdown in outsized technology sector gains.
• The Energy, Financials and Materials sectors led the market higher in July, amid a strong month for value investing. The largest relative sector contributors for the Fund included holdings in Financials, such as Webster Financial and Popular, and holdings in Materials, including Smurfit Kappa, Lundin Mining and Yara. Notable relative detractors included holdings in Communication Services, led by Interpublic Group.
• Webster Financial and Smurfit Kappa were among the top individual contributors in July. Despite seeing pressure on net interest margins and slight adjustments on guidance, Webster had robust growth in both loans and deposits. Investors were optimistic about the stock, positing even further improvement in the second half of 2023. Smurfit Kappa posted record first quarter earnings, driven by easing of input costs and resilient pricing levels, setting a positive outlook for the remainder of the year. The company is now setting its sights on wider expansion efforts in North Africa, after the launch of its first plant in Morocco. The market became bullish on Smurfit Kappa’s business cycle on the back of restocking demand projections over the next twelve months.
• Teleperformance and Interpublic Group were among the top individual detractors in July. Teleperformance scaled back guidance on top-line expectations for the second consecutive quarter. Margins held up, but the company noted a pullback in client spending, as focus rotated to leaner operations and lower fixed costs. Interpublic Group reversed full-year organic revenue guidance from 2-4% to 1-2%. The advertising holding companies saw spending drop among its notable technology and telecommunications clients, overshadowing net new business gains among other industry players.
• During the month, Polaris completed the final sale of Brookline Bancorp. Brookline had one of the highest loan-to-deposit ratios in the portfolio and, due to recent acquisitions, had more commercial real estate exposure than Polaris deemed appropriate. Polaris’ recent addition of Cullen Frost provided the opportunity to sell Brookline while maintaining the portfolio’s exposure to banks.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-21.pdfJune, 2023
• The Fund returned 5.00%, net of fees, in June 2023, compared with a return for the Benchmark of 5.59%, with growth stocks again dominating market returns and technology companies leading the charge as investors speculated on slowing inflation.
• The Consumer Discretionary, IT and Industrials sectors saw the largest gains in June, with Utilities and Communication Services lagging the wider market. For the Fund, the largest relative detractors were holdings in Consumer Discretionary, such as Bellway and Taylor Wimpey, and holdings in Health Care, including AbbVie and Jazz Pharmaceuticals. Relative contributors included holdings in Industrials, led by Marubeni and Allison Transmissions, and in Energy, such as Williams Companies.
• Marubeni and Allison Transmissions were among the top individual contributors in June. Marubeni continued to perform exceptionally well through the first half of the year, attributable to underlying business fundamentals and a boost from Berkshire Hathaway’s investment in five leading Japanese trading companies, of which Marubeni is one. Shares in Allison Transmissions rose after the ISM New Orders Index rose 7% in June. The ISM is one of the leading indicators of freight trends, which may bode well for Allison’s order volume in the coming months. The company also released its ESG report, which highlighted its outstanding electric vehicle technology innovation and propulsions solutions.
• Bellway, Taylor Wimpey and AbbVie were among the top individual detractors in June. Shares in UK homebuilders Bellway and Taylor Wimpey declined as questions swirled about home volumes in a stubbornly high interest rate environment. Bellway offered a trading statement in which management reiterated previous guidance; however, there was little communication around promotional strategies or margins. AbbVie will lose its monopoly on arthritis drug Humira as the first generic biosimilar is slated to hit the market in the second half of 2023. Investors sold down the name, but AbbVie has an impressive drug pipeline with three of four new drugs performing in line with expectations. AbbVie’s aesthetics division, Allergan, continued to gain ground through popular names like Botox, Juvederm, Kybella, SkinMedica, and CoolSculpting, amongst others.
• During the month, Polaris completed the final sale of Hyundai Mobis. The South Korean auto parts company was sold opportunistically following a strong stock price recovery.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-20.pdfMay, 2023
The Fund returned -3.26%, net of fees, in May 2023, compared with a return for the Benchmark of -0.22%, as investor enthusiasm for technology drove further disparity between growth and value performance year-to-date.
• The growth-oriented IT sector saw the only significant gains in May; most index sectors, led by Energy and Materials, moved lower. For the Fund, the largest relative detractors were an underweight to IT and holdings in Consumer Discretionary, such as Sally Beauty Holdings and Crocs. Relative contributors included underweights to Consumer Staples, Utilities and Real Estate.
• SK Hynix and MKS Instruments were among the top individual contributors in May. SK Hynix benefited from a number of tailwinds, including new investment powering the AI infrastructure buildout, troughing of the semiconductor cycle and market share leverage, as competitor Micron was banned as a supplier to the Chinese government. Despite a ransomware attack in February, MKS reported better than anticipated first quarter results with decent revenues from its electronics, packaging, and specialty industrial divisions. MKS also announced progress in the integration of Atotech, a chemical consumables company acquired in July 2021.
• Tyson Foods and Sally Beauty Holdings were among the top individual detractors in May. Tyson struggled with high input costs, primarily labour, that could not be fully offset with higher prices. While the company’s prepared foods business remained steady, its pork, chicken and beef businesses came under pressure. US beauty supply/hair colour retailer Sally Beauty reported modestly positive sales growth but lower margins, as wages increased for in-store employees. Sally Beauty’s high-touch sales expertise is a competitive differentiator making these investments necessary. Concerns about weakening consumer spending also weighed on shares.
• During the month, Polaris completed the initial purchases of Cullen/Frost Bankers, Tecnoglass, Teleperformance, and TotalEnergies. San Antonio-based Cullen/Frost is a leading independent bank in Texas. Founded in 1868, the bank has had 29 straight years of dividend increases. Its conservative culture is evidenced by its low loan-to-deposit ratio and ample liquidity, positioning itself for further profitable growth as peers pull back on lending. Tecnoglass is a US-listed Colombian architectural glass supplier for commercial and residential construction, primarily servicing the attractive US southeast market, including Florida and Texas. The company has a sizeable cost advantage on labour and energy, resulting in significant market share gains and sector-leading margins. Teleperformance is a global leader in customer interaction management, serving thousands of customers in 170 markets globally. Healthcare and financial services are their two largest verticals. TotalEnergies is adeptly navigating the transition from a traditional oil and gas company to an integrated energy company, comprising an upstream business that branches out into an LNG business with global reach and an enviable renewable energy portfolio. TotalEnergies recognised the opportunity to transition earlier than peers and is well positioned to serve the growing needs of the electric economy
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-19.pdfApril, 2023
• The Fund returned 0.02%, net of fees, in April 2023, compared with a return for the Benchmark of 1.61%, with a benign month for global markets reflecting an environment of countervailing forces, including persistent inflation, tightening liquidity, and ongoing geopolitical risks, alongside a resilient labour market and surprisingly good corporate earnings.
• A rising market tide lifted all sectors in April, with Health Care and Financials contributing most to index returns. For the Fund, the largest relative detractors were holdings in Energy, led by Marathon Petroleum, and holdings in Health Care, which lagged the rise of the broader sector. These results were partially offset by holdings in Consumer Discretionary, including Bellway and Taylor Wimpey.
• Sallie Mae (SLM), Bellway and Vinci were among the top individual contributors in April. SLM reported a strong first quarter, following a disappointing Q4 where weakening credit trends led to an outsized provision. Credit performance has improved, loan growth was 12% and the company’s floating rate assets resulted in margin expansion. The UK housing market has seen a slight improvement as the spring selling season has progressed with prices remaining relatively steady, and in this environment, Bellway confirmed guidance for the full year with the expectation of lower volumes, but within market expectations. While most of the attention for Vinci is focused on their toll road concession business, the strength of its construction and electrical contracting segments was a positive surprise in the first quarter.
• Marathon Petroleum and Northern Trust were among the top individual detractors in April. Marathon Petroleum is producing record earnings due to wide refining margins, but concern about weaker gasoline and diesel demand led to profit taking by investors. Results at Northern Trust were pressured by expense growth and the expectation that its net interest margin will be pressured by higher deposit costs.
• There were no initial purchases or final sales within the portfolio during the month.
File:March, 2023
• The Fund returned -1.93%, net of fees, in March 2023, compared with a return for the Benchmark of 2.52%, with the collapse of USbased Silicon Valley Bank and Signature Bank initially causing market jitters, before fears of a global banking crisis dissipated and global markets rebounded.
• In a weaker month for value investing, the IT, Communication Services and Health Care sectors outperformed, while Financials were a notable outlier. The largest relative detractors from the Fund were holdings in Financials, including Webster Financial, Popular, and M&T Bank, and an overweight to the sector, and holdings in IT, which lagged the rise of the broader sector, and an underweight to the sector. Holdings in Real Estate, namely Daito Trust Construction, and an underweight to the sector were the largest relative contributors.
• Microsoft and OpenText were among the top individual contributors in March. Microsoft hosted an event on the future of artificial intelligence, introducing Security Copilot as next-generation AI for cybersecurity. Market scepticism originally surrounded OpenText’s acquisition of UK-based Micro Focus, but by February 2023, the deal closed and OpenText announced robust quarterly earnings, with strong cloud bookings and revenue. With concerns assuaged, OpenText’s stock price has rebounded.
• Webster Financial and Popular were among the top individual detractors in March. Much, if not all, of the declines in the two US regional banks stemmed directly from the SVB/Credit Suisse failures and concerns about a broader banking crisis, which hasn’t come to pass. Most US banks are on solid footing, having shored up balance sheets and capital ratios after the Global Financial Crisis; SVB and Signature were outliers, heavily dependent on tech and cryptocurrency clients and overextended with longer-term maturity bonds.
• During the month, Polaris completed the initial purchase of Canadian Tire, and the final sale of Intel. With extensive capital expenditures and increased competition, US-based semiconductor chip manufacturer Intel’s cash flow profile has begun to deteriorate; a turnaround will likely be protracted. Canadian Tire is one of the oldest and largest general stores in Canada, and has a diversified business model, with ownership of their own real estate, credit card operations and other retail lines including Sport Chek, Mark's and Helly Hansen.
File:February, 2023
• The Fund returned -1.08%, net of fees, in February 2023, compared with a return for the Benchmark of -1.63%, as the US Federal Reserve signalled its intention to keep interest rates higher for longer.
• Cyclical sectors including IT, Industrials and Financials supported the market in February, while Real Estate, Energy and Utilities lagged. The largest relative contributors to the Fund were holdings in Industrials, including SKF and Allison Transmission, and in Communication Services, led by Publicis Groupe. Holdings in IT, such as Intel and Samsung Electronics, and an underweight to the sector were the largest relative detractors.
• Publicis Groupe and SKF were among the top individual contributors in February. French advertising company Publicis released fullyear earnings, highlighting 2022 organic growth backed by its productive Epsilon and Sapient divisions. Seemingly resistant to macroeconomic concerns, the company laid out upbeat full year 2023 organic growth guidance, pointing to continued client investment in non-traditional marketing venues, such as data, technology, and digital transformation. Swedish bearing and seal manufacturer SKF reported strong fourth quarter 2022 results, signalling that the company caught up on the cost curve and is set to benefit from organic growth on pricing, mix, and volume. The company noted solid industrial and auto sector demand, specifically highlighting their ball bearing applications in the burgeoning electric vehicle (EV) marketplace.
• Lundin Mining and SLM were among the top individual detractors in February. Lundin Mining declined in lockstep with the overall mining industry. The downward trend was further aggravated by news that the Canadian firm’s copper reserves decreased, excluding the recently acquired Josemaria Resources project. SLM, a provider of education loans, reported lacklustre earnings with higherthan-expected provisions, elevated net charge-offs and a weak 2023 outlook.
• There were no initial purchases or final sales within the portfolio during the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-18.pdfJanuary, 2023
Performance summary:
• The Fund returned 5.80%, net of fees, in January 2023, compared with a return for the Benchmark of 6.23%, with markets continuing to exhibit positive momentum following the easing of Covid restrictions in China and amid investor hopes that central banks are close to the end of their rate hiking cycle.
• The growth-oriented IT and Consumer Discretionary sectors drove the market higher in January, while defensive sectors including Health Care and Consumer Staples declined. For the Fund, the largest relative detractors were holdings in Financials, including DNB and Sparebank, and in Communication Services, including LG Uplus and KDDI. Holdings in Consumer Staples, such as Greencore Group and Tyson Foods, and an underweight to the sector were the largest relative contributors.
• Methanex and Capital One Financial were among the top individual contributors in January. Shares in Methanex performed exceptionally during January, with investors rotating back into the re-opening trade in China. There will be more demand from the Chinese market as the economy quickly returns to pre-pandemic activity. Capital One reported Q4 results that missed on key metrics, mainly stemming from higher provisions for loan losses and deposit betas. However, investors focused on future expectations; the assumption on the higher provision was using a 5% unemployment number, which investors believe to be very conservative.
• AbbVie and NextEra Energy were among the top individual detractors in January. AbbVie declined on a miss in earnings stemming from a decrease in its oncology segment. On the positive side, management affirmed expectations of top-line growth guidance in 2025 post the loss-of-exclusivity for Humira. NextEra Energy fell following the sudden retirement of the CEO of its subsidiary Florida Power & Light (FPL), with the departure largely resulting from a campaign financing complaint. After a full internal investigation, management concluded that neither FPL nor NextEra Energy committed any violations. Polaris are monitoring if this will lead to a further investigation by the Federal Election Commission or further reputational damage in Florida.
• There were no initial purchases or final sales within the portfolio during the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-17.pdfDecember, 2022
Performance summary:
• The Fund returned -3.08%, net of fees, in December 2022, compared with a return for the Benchmark of -5.19%, with geopolitical conflicts and inflation proving to be the most pressing economic risks during the month.
• Defensive sectors including Utilities and Consumer Staples outperformed in a month in which all market sectors moved lower. For the Fund, the largest relative contributors were holdings in Consumer Discretionary, including Crocs and Sally Beauty Holdings, and in IT, including OpenText and MKS Instruments, as well as an underweight to the latter. Holdings in Financials, led by Webster Financial, International Bancshares and M&T Bank, and an underweight to Utilities were the largest relative detractors.
• Horizon Therapeutics and Crocs were among the top individual contributors in December. Shares in Horizon gained after Amgen announced its intent to acquire the company. The deal is valued at US$27.8 billion, which represented a 48% premium to Horizon’s stock price closing on 29 November 2022. Shoe and sportswear retailers, including Crocs, benefitted from NIKE’s upbeat guidance referencing better inventory controls. Concerns about post-pandemic sales and higher shipping costs have weighed on Crocs’ share price in recent months, yet the company’s most recent earnings report outlined robust sales both domestically and abroad.
• Webster Financial, International Bancshares and M&T Bank were among the top individual detractors in December. Each company was among a handful of US banks that languished on lower-than-expected net interest margins and banking fees, while costs increased.
• During the month, Polaris completed the initial purchases of MKS Instruments and Northern Trust, and the final sale of Brother Industries. MKS Instruments is a semiconductor equipment manufacturer dominant in material and photonic solutions. Northern Trust is a US trust and custodian bank with a sizeable wealth and investment management business. Brother Industries, a Japanese print manufacturer, was sold following supply chain challenges and slower retail/home ink sales as professionals transitioned back to commercial offices.
November, 2022
• The Fund returned 7.85%, net of fees, in November 2022, compared with a return for the Benchmark of 5.43%, with investor risk appetite returning despite a weakening European economy and consumers across the world feeling the pinch of high inflation.
• Most market sectors, with the exception of Energy, moved higher in November. For the Fund, the largest relative contributors were holdings in Consumer Discretionary, such as Crocs and Next, and in Health Care, including United Therapeutics and newly purchased Horizon Therapeutics. Holdings in Financials, led by Capital One Financial, were the largest relative detractors, partially offset by an overweight to the sector.
• Crocs and Weichai Power were among the top individual contributors in November. Crocs recovered strongly following a significant de-rating due to concerns that pandemic tailwinds for their unique shoes had waned. While growth in core Crocs brand is slowing from its rapid pace, the recent acquisition of Hey Dude, a casual, lightweight shoe, is expected to drive the company’s next leg of growth. Chinese diesel engine manufacturer Weichai rallied after releasing its Q3 results and benefitted from investor expectations that orders for heavy duty trucks in China have reached a cyclical low.
• Brother Industries and Sally Beauty Holdings were among the top individual detractors in November. Shares in Japanese printer manufacturer Brother Industries were weaker as supply chain challenges impacted profits and demand for consumable ink fell. The weakness in ink demand can be attributed to the work-from-home phenomenon moderating to some extent. Quarterly same-store sales at haircare product retailer Sally Beauty were flat, with the company citing “inflationary pressures and supply chain headwinds”. The company plans to close about 10% of their Sally Beauty locations as they continue to shift to the omnichannel retail model.
• During the month, Polaris completed the initial purchases of Horizon Therapeutics and Interpublic Group. Global biotechnology company Horizon manufactures Tepezza, targeting thyroid eye disease, and Krystexxa for the treatment for gout. Tepezza is already a multi-billion-dollar product and Krystexxa has the potential to be meaningful as well. Interpublic, which provides advertising and marketing services, has historically been too expensive for Polaris’ value discipline, but recent significant share price falls presented a good entry point.
October, 2022
• The Fund returned 9.22%, net of fees, in October 2022, compared with a return for the Benchmark of 7.22%, as major economy central banks continued to either raise rates or guide to ongoing rate rises to combat inflation.
• Positive performance in all market sectors, led by Energy and Industrials, drove the index higher in October. The largest relative contributors for the Fund were holdings in Consumer Discretionary, such as Magna International and Inchcape, and in Financials, such as Webster Financial and JPMorgan Chase. Holdings in IT, which lagged the rise of the broader sector, and an underweight to Energy were notable relative detractors.
• NOV and Elevance Health were among the top individual contributors in October. NOV, the US based supplier of upstream energy equipment and services, reported decent results, with CEO Clay Williams noting that “the petroleum industry’s ability to ramp activity quickly to respond to the emerging energy shortage remains limited by, among other factors, availability of the technology and the equipment we provide.” US health insurer Elevance Health reported double-digit growth in revenues, operating earnings, and adjusted earnings per share driven by mid-single digit membership growth and premium increases.
• Kia Corporation and M&T Bank were among the top individual detractors in October. Volumes, sales and profits of South Korean auto maker Kia fell in the third quarter. Price increases could not offset higher costs and the company made extra provisions for recalls. While US-based M&T Bank announced decent gains in net operating income for the second quarter and year-on-year, the company missed estimates, with net interest income and fee income both below expectations and loan loss provisions higher than anticipated.
• During the month, Polaris completed the initial purchase of Ahold Delhaize and the final sales of Asahi Group, BASF, Cinemark, FedEx, HeidelbergCement, Solvay and Warner Bros. Discovery. Ahold Delhaize is the owner of the leading supermarket chains in Belgium and the Netherlands, and several chains in the US. It is a well-run company with industry leading margins and excellent capital allocation policy. Most of the proceeds from the sales were used to add to existing portfolio companies in which Polaris has greater conviction.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-14.pdfSeptember, 2022
• The Fund returned -9.41% in September 2022, compared with a return for the Benchmark of -8.91%, as central banks around the world pushed interest rates higher to fend off inflation. The US Federal Reserve, the Bank of Canada and European Central Bank all raised rates by 75 basis points, and the Bank of England and Reserve Bank of India raised rates by 50 basis points.
• Negative performance in all market sectors except Health Care led to index declines in September. The Fund’s largest relative detractors were holdings in Consumer Discretionary, such as LG Electronics and Kia, and in Industrials, such as FedEx and Weichai Power. Holdings in Financials, such as International Bancshares and Hannover Re, and in Communication Services, including Publicis Groupe and Ipsos, were notable relative contributors.
• Marathon Petroleum and International Bancshares were among the top individual contributors in September. Record high refining margins boosted profits for Marathon, which is also using excess cash for stock buybacks. A rising rate environment boosted US regional banks such as International Bancshares, which expanded net interest margins despite higher funding costs.
• FedEx and Weichai Power were among the top individual detractors in September. Global package delivery operator FedEx missed earnings expectations due to volume decline across all three divisions – Express, Ground, and Freight. In particular, operating income in the Express business declined materially. FedEx raised prices in all three divisions but profits disappointed on the back of declining volume and cost headwinds. Weichai Power declined as heavy-duty truck market sales fell, along with its profits, on the back of continued Covid lockdowns in China. Its overseas subsidiary, KION Group, also issued a profit warning.
• There were no initial purchases or final sales within the portfolio during the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-13.pdfAugust, 2022
The Fund returned -3.74% in August 2022, compared with a return for the Benchmark of -3.57%, as inflation expectations saw the Eurozone, UK, and South Korea push their key interest rates higher by 75, 50 and 25 basis points, respectively.
• Negative performance in all GICS sectors except Energy caused equity markets to fall in August. For the Fund, the largest relative detractors were holdings in Communication Services, in particular Cinemark, and in Consumer Discretionary, such as Bellway, Next and Taylor Wimpey. Holdings in Health Care, such as Gilead Sciences and CVS Health, and in Financials, including Munich Re and Hannover Re, were notable relative contributors.
• Marubeni and Marathon Petroleum were among the top individual contributors in August. Japanese trading and investment conglomerate Marubeni rose as it beat consensus earnings. Polaris’ conversations with management proved productive, as Marubeni detailed their guidance (pricing, divestments, capital expenditures), competitive positioning and strategy execution. A tighter oil market supported shares in Marathon Petroleum.
• OpenText and Cinemark were among the top individual detractors in August. Shares in OpenText declined after it announced the acquisition of Micro Focus for a relatively cheap valuation, with an eye towards migrating the company’s products to the cloud and improving renewal rates. An in-depth meeting with US cinema operator Cinemark offered reassurance of the company’s positive operating leverage despite posting a net loss during the second quarter. Polaris believe Cinemark’s management can execute on its strategy as it is among the top operators in this space.
• During the month, Polaris completed the initial purchase of Smurfit Kappa Group, and the final sales of Bunzl, Cineworld Group, and Fresenius. Paper packaging company Smurfit Kappa Group sits on the lower end of the cost curve thanks to its vertical integration and has proven its ability to raise prices in the current environment. Nearly 80% of its customers are fast-moving consumer goods, catering to a steady consumer staples end market. Bunzl was sold on concerns around its ability to sustainably improve upon its historical operating margins on the back of higher operating costs.
Cineworld was sold on concerns of potential shareholder dilution or bankruptcy, the latter of which came true in September. The company suffered from a high debt load, Cineplex lawsuit and sustained low UK cinema attendance in a post-pandemic world. Fresenius was sold amid the company’s lowered top- and bottom-line guidance, driven by shortterm headwinds from material, supply chain and energy costs, staff shortages in dialysis clinics, higher wages from Fresenius Medical Care and fewer catalysts in its biosimilar pipeline.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-12.pdfJune, 2022
The Fund returned -6.49% in June 2022, compared with a return for the Benchmark of -4.64%, with global equities impacted by the measures of central banks worldwide to raise interest rates in an effort to curb inflation. The US Federal Reserve lifted interest rates by 0.75%, the Bank of England also raised its key interest rate and the European Central Bank hinted it may do so in its July meeting. • Defensive market sectors, namely Health Care and Consumer Staples, were the sole contributors to index returns in June. The largest relative detractors for the Fund were holdings in Financials, including Bancolombia and Capital One Financial, an overweight to Materials, and holdings in Consumer Discretionary, such as Sally Beauty and Kia Corporation. Holdings in Industrials, such as FedEx, were the largest relative sector contributor.
• United Therapeutics, AbbVie and UnitedHealth Group were among the top individual contributors in June. The US health care sector broadly remained in positive territory across the month. Additionally, UnitedHealth’s UK division agreed to pay £1.24bn to acquire EMIS Group in an all-cash deal. EMIS provides healthcare software, IT, and other services in the UK.
• Bancolombia and Lundin Mining were among the top individual detractors in June. Shares in Bancolombia moved lower after leftist candidate Gustavo Petro won the Colombian presidential election on a platform to wean the country off its reliance on raw materials and increase taxes on the wealthy. Lundin was impacted by recession concerns that caused commodity prices including copper to drop sharply during the month. Lundin also completed the acquisition of Josemaria Resources, but shares dipped on projected capital expenditures
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Performance-Report-PRRP-PGEF-ANZ.pdfMay, 2022
The Fund returned 2.36% in May 2022, compared with a return for the Benchmark of -0.20%, with global markets stabilising across the month despite soaring energy prices and indications of further economic weakness.
• Most market sectors fell in May, led by IT and Consumer Discretionary, with Energy and Financials noteworthy contributors to index returns. For the Fund, holdings in IT, including Catcher Technology and Avnet, and an underweight to the sector, as well as overweight positioning and holdings in Financials, such as Bancolombia, were the largest relative contributors. An underweight to Energy was the largest relative sector detractor.
• United Therapeutics and Marathon Petroleum were among the top individual contributors in May. United Therapeutics received US FDA approval in May for Tyvaso DPI (dry powder inhaler) in treating pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease. This approval extends their existing franchise and creates a greater barrier against competitors. Marathon is benefitting from record refining margins as the shortage of Russian crude oil is tightening availability of gasoline and diesel on a global basis.
• Crocs and Publicis Groupe were among the top individual detractors in May. Although Crocs reported good earnings, the company’s valuation de-rating has not abated as investors remain bearish on consumer stocks. The retail environment has certainly slowed from the heady days of the stimulus-driven boom and many consumer companies are now priced for a significant recession. Publicis fell in sympathy with many of the advertising houses after Snap warned of a material slowdown in online advertising. The combination of a weaker consumer and changes in privacy and data access regulations is impacting the sector
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-11.pdfApril, 2022
The Fund returned -3.84% in April 2022, compared with a return for the Benchmark of -7.44%, as global trade contracted due to continued supply chain disruptions, higher commodity prices and an overall decline in equity markets as additional rate hikes were priced in to temper rising inflation.
• IT, Consumer Discretionary and Communication Services were among the largest detractors from index performance in April. For the Fund, these same sectors were the largest relative contributors owing to stock selection, with Kia of particular note. Consumer Staples were the largest relative detractor, due to both underweight positioning and stock selection, namely Nomad Foods. • Kia and Amcor were among the top individual contributors for the month. Kia, a South Korean automobile manufacturer, reported higher overseas car sales for March compared to 2021. Investors were also satisfied with the latest month-end earnings, noting the company’s ability to increase its average selling price for its small segment models, despite supply chain shortages. Amcor, a global consumer packaging company, announced it would purchase ExxonMobil’s Exxtend technology to increase the amount of recycled content in its packaging. The company also has the ability to recover input cost inflation via higher prices.
• Discovery and Nomad Foods were among the top individual detractors from performance in April. Discovery’s acquisition of Warner Media from AT&T closed at the beginning of April. The newly formed communication services company, Warner Bros Discover, was the top individual detractor, likely due to market selling post completion of the merger. Nomad Foods, a leading frozen foods company, declined as the market anticipated management may shift its input exposure, as it sources a portion of its fish from Russia. Although the company can continue sourcing from the region, input costs are likely to increase and this near-term distraction may damper Nomad’s future growth prospects into eastern Europe
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-10.pdfMarch, 2022
The Fund returned -1.02% in March 2022, compared with a return for the Benchmark of 2.88%, as inflation remained elevated, fuelled by fiscal spending, supply chain issues, and higher commodity prices caused by the conflict in Ukraine.
• Financials, Consumer Staples and Communication Services were among the largest detractors from index performance in March. The largest relative detractors for the Fund on a sector basis were holdings in Consumer Discretionary, including UK homebuilders Bellway and Taylor Wimpey, and holdings in Materials, such as BASF. Notable relative contributors included holdings in Health Care, including Jazz Pharmaceuticals and AbbVie.
• Marubeni and Bancolombia were among the top individual contributors to performance in March. Marubeni, a Japanese trading company, raised its full year guidance by ¥50 billion compared to previous forecasts, due to robust operations across its agriculture, energy, and metals and mining businesses. The company also raised dividends and announced a share buyback of up to ¥30 billion in 2022. Bancolombia reported strong earnings in late February with non-performing loans improving, net interest margins expanding, and digital banking Nequi reaching 10 million users.
• Alrosa and Capital One Financial were among the top individual detractors from performance in March. The Moscow Stock Exchange remained closed throughout March to avoid the impact of global sanctions following the Russian invasion of Ukraine. The Fund’s position in Alrosa, a Russian diamond miner, was revalued to nil during the month and the investment manager intends to divest the position when restrictions are lifted. The Responsible Entity continues to closely monitor the market situation to ensure an appropriate valuation is applied to this holding. Capital One Financial, a US-based credit card and auto financing company, was impacted by concerns around consumer confidence, a potential economic downturn, and stagflation. Although credit card and auto loan growth are increasing and delinquencies remain well below historical levels, there is growing concern over a worsening consumer credit cycle with stimulus checks and deferral programs ending.
• During the month, Polaris completed the initial purchases of NOV and OpenText, and the final sales of Andritz and Sumitomo Mitsui Trust. NOV is an oil equipment company that provides equipment and rigs for oil exploration and production. With high oil prices and many years of underinvestment in the oil and gas industry, NOV is well positioned to benefit from the current environment as a late cycle beneficiary. OpenText, a provider of enterprise information management software and solutions, commands 30-40% market share on its service offerings. Sumitomo Mitsui Trust and Andritz were sold to make room for these purchases.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-9.pdfFebruary, 2022
The Fund returned -1.02% in February 2022, compared with a return for the Benchmark of -2.75%, with the sector rotation from growth to value continuing in the face of expected increases in interest rates and higher inflation, the latter further fuelled by the conflict between Russia and Ukraine. • The Energy sector was the sole positive contributor for the index in February, with the growth-dominated IT and Consumer Discretionary sectors leading declines. For the Fund, the largest relative contributors on a sector basis were holdings in Financials, such as M&T Bank and flatexDEGIRO, and holdings in Communication Services, particularly Cinemark. Relative detractors included holdings in Health Care, including United Therapeutics, and holdings in Consumer Discretionary, such as Crocs and Michelin.
• Methanex and Lundin Mining were among the top individual contributors to performance in February. Methanol producer Methanex reported its strongest operational and financial performance in its history in the fourth quarter, as strong market conditions supported high methanol prices while cost pressures from higher natural gas and coal prices led to restrictions in methanol industry production. Lundin Mining took advantage of a favourable base metal price environment to set many all-time financial records in 2021. Production of all metals met or exceeded the company’s most recent annual production guidance.
• Alrosa and United Therapeutics were among the top individual detractors from performance in February. Russian diamond miner Alrosa fell during the month primarily due to the Russia-Ukraine conflict. As at the end of the month, shortly after the closure of the Russian stock exchange, the position in Alrosa represented 0.41% of the Fund and has since been revalued to zero. Alrosa is the only direct Russian exposure in the Fund. US-based biotechnology company United Therapeutics recently received an information request letter from the US Food and Drug Administration (FDA) requesting additional information regarding the pulmonary safety of its Tyvaso Dry Powder Inhaler. The company responded to the information request; however, the FDA has considered this response to be a major amendment to the NDA, extending the FDA’s review deadline to May 2022.
• During the month, Polaris completed the initial purchase of private education loan provider SLM Corporation. SLM is one of the least expensive financial companies on Polaris’ screens with a dominant market share in a very stable market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-8.pdfJanuary, 2022
The Fund returned -1.04% in January 2022, compared with a return for the Benchmark of -5.07%, with a market rotation out of growthdominated sectors in favour of value dragging on overall market performance.
• Traditional value sectors, led by Energy and Financials, moved higher in January, at the expense of the growth-dominated IT and Health Care sectors. For the Fund, the largest relative contributors on a sector basis were holdings in Financials, such as Popular, and an overweight to the sector, and holdings in Materials, including Methanex and BASF. Relative detractors included underweight positioning in Energy, and holdings in Utilities, namely NextEra Energy.
• Discovery and Marathon Petroleum were among the top individual contributors to performance in January. Discovery rose strongly after an analyst upgrade on the potential, following its merger with WarnerMedia, for the combined entity to create a “global media powerhouse” and “highly achievable” synergy target of $3 billion. Marathon gained on market sentiment surrounding capacity rationalisations, strong demand recovery, slow capacity addition, and low inventory among US refiners. The company also announced that refining margin had doubled from a year ago after the month end.
• Crocs and Bellway were among the top individual detractors from performance in January. Crocs announced it expects record 2021 revenue, with around 67% growth compared to 2020. However, after outperforming since the onset of the pandemic, the stock has come down sharply since hitting its peak last year. Shares in UK housebuilder Bellway declined following news that the UK government may ask the industry to pay an additional cost of £4 billion for the remediation of unsafe cladding
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-7.pdfDecember, 2021
The Fund returned 5.14% in December 2021, compared with a return for the Benchmark of 3.97%, with the market rally capping off a strong 2021 despite pandemic headwinds, supply chain challenges, and interest rate uncertainty. • Health Care was the largest contributor to index performance in December, while defensive sectors such as Consumer Staples and Utilities saw strong returns. For the Fund, the largest relative contributors on a sector basis were holdings in IT, such as SK Hynix, and in Consumer Discretionary, led by LG Electronics. Relative detractors included holdings in Materials, such as BASF and Alrosa, and in Industrials, namely SKF and Vinci.
• Coca-Cola Europacific Partners (CCEP) and United Therapeutics were among the top individual contributors to performance in December. CCEP, digesting the acquisition of Coca-Cola Amatil in Australia, gained 13% for the month as management provided proforma financial targets. While cash flow is expected to grow meaningfully in the next few years due to cost cutting, Polaris believe this is already discounted in the share price and used the strength as an opportunity to exit the position. United Therapeutics’ resubmission of its combination drug-device product Tyvaso DPI, used to treat pulmonary hypertension, for US Food and Drug Administration review was favourably received by the market, and is expected to be approved by mid-2022.
• Crocs was among the top individual detractors from performance in December. The company had a tough month as concerns that the brand was peaking were compounded by a fairly large, unexpected acquisition. The company is acquiring Hey Dudes, a casual footwear company that, like Crocs, has a loyal customer following. Management explained the deal as the combination of two high-growth, unique offerings on reasonable financial terms, although it is clear the market will need more evidence of the benefits of the combined entity
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-6.pdfNovember, 2021
The Fund returned -4.10% in November 2021, compared with a return for the Benchmark of -1.57%, as the emergence of the new Omicron COVID variant in southern Africa impacted overall equity market sentiment. • Information Technology was the largest contributor to index performance in November, while Financials and Energy detracted most. For the Fund, the largest relative detractors on a sector basis were holdings in IT, which lagged the rise of the broader sector, and an underweight to the sector, as well as holdings in Materials, including Methanex and HeidelbergCement. Positive relative contributors included holdings in Utilities, such as NextEra Energy. • SK Hynix was among the top individual contributors to performance in November. The semiconductor manufacturer benefited as the spot price of DRAM chips looked to have bottomed out in the month, which should lead to a firming of contract prices. While semiconductor companies in general have recently underperformed the broader market, the overall demand environment should improve share price returns.
• Cinemark and Asahi Group were among the top individual detractors from performance in November. Theatre operator Cinemark reported strong results in October with attendance back to 90% of 2019 numbers. November, however, did not fare so well, with films such as Marvels Studios’ Eternals and Disney’s Encanto failing to attract audiences at the same levels as in October. As a result, US domestic box office fell from US$622 million in October to US$516 million in November. Shares in Asahi Group fell over concerns surrounding the Omicron variant and persistent cost inflation in raw materials, labour, and freight impacting profitability levels. • During the month, Polaris completed the initial purchases of Allison Transmission and FlatexDegiro. Allison Transmission is the global leader in supplying fully automatic transmission within medium- to heavy-duty trucks, and is also investing in electrified propulsion and power management systems. FlatexDegiro is a pan-European online brokerage business with a dominant market share. The company is one of the fastest-growing online brokerage businesses in Europe, with more than 1.75 million customers, a wide range of products and competitive pricing.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-5.pdfOctober, 2021
The Fund returned -1.62% in October 2021, compared with a return for the Benchmark of 1.65%, as an elevated inflationary environment saw markets price in a higher probability of rising interest rates by the end of 2022.
• Increased consumer demand, as well as higher commodity and input costs, resulted in a continued inflationary environment in October. Most market sectors moved higher, with Communication Services and Consumer Staples the only exceptions. For the Fund, the largest relative detractors on a sector basis were holdings in IT, including Brother Industries and Intel, and an underweight to the sector, as well as holdings in Consumer Discretionary, such as Honda. Positive relative contributors included holdings in Materials, namely Lundin Mining, and in Health Care, such as Anthem and UnitedHealth Group.
• Lundin Mining and Crocs were among the top individual contributors to performance in October. The third-quarter earnings of Canadian materials company Lundin were bolstered by an increase in copper prices, resulting in higher year-to-date cash flow. Footwear company Crocs reported strong quarterly sales and operating margins, despite facing global supply chain disruptions.
• Brother Industries and Cineworld were among the top individual detractors from performance in October. Brother Industries fell as the positive work-from-home sentiment waned. Cineworld was impacted by lower market expectations for box office performance going forward, as well as an ongoing court case with Cineplex over its failed takeover bid, and increased short interest in the stock, all despite the company’s CEO stating it expects to return to pre-pandemic earnings in the fourth quarter of 2021
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Performance-Report-PRRP-PGEF-ANZ-1.pdfSeptember, 2021
The Fund returned -1.44% in September 2021, compared with a return for the Benchmark of -3.76%, as global equity markets moved lower on investor concerns around inflation and rising yields.
• With the exception of Energy, all sectors made a negative contribution to market returns in September. For the Fund, the largest relative sector contributors were holdings in Financials, led by Siam Commercial Bank, and an overweight to the sector, as well as holdings in Communication Services, namely Cinemark. These results were partially offset by holdings in Consumer Discretionary, including Taylor Wimpey.
• Cinemark and Methanex were among the top individual contributors to performance in September. US theatre operator Cinemark continued to perform well as US domestic cinema activity continued to gain traction amid declining new COVID cases, the ongoing vaccine rollout, and a strong line-up of film content. Canadian methanol producer Methanex is benefiting from strong methanol prices as a result of solid global demand, persistent supply interruptions and delays, and surging global feedstock costs. In addition, the company announced a 5% share repurchase program in September.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-1-1.pdfAugust, 2021
The Fund returned 2.14% in August 2021, compared with a return for the Benchmark of 2.68%, with global equity markets achieving a further consecutive month of gains.
• All GICS sectors with the exception of Energy moved higher in August. For the Fund, the largest sector detractors on a relative basis were holdings in IT, which lagged the rise of the broader sector, and an underweight to the sector, as well as holdings in Materials, including Lundin Mining and Lanxess, and an overweight to the sector. These results were partially offset by overweight positioning and holdings in Financials, such as Bancolombia.
• United Therapeutics and Babcock International were among the top individual contributors to performance in August. United Therapeutics beat analyst estimates for both revenue and earnings for the second quarter, and the company continued its expansion of Tyvaso into new applications beyond pulmonary arterial hypertension. Babcock International, which provides engineering support services to the UK defence sector, bounced back after reassuring the market in its annual results announcement that it does not need to raise equity, and is expecting improved sales growth.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-3.pdfJuly, 2021
The Fund returned -1.03% in July 2021, compared with a return for the Benchmark of 1.77%, as the growth-oriented technology and health care sectors saw further gains following on from the prior month.
• All market sectors moved higher in July with the exception of Energy. For the Fund, the largest relative sector detractors were holdings in Communication Services, namely Cinemark and Cineworld; holdings in Information Technology, including SK Hynix, and an underweight to the sector; and holdings in Financials, such as Webster Financial and International Bancshares. These results were partially offset by an overweight to Materials.
• Crocs and Inchcape were among the top individual contributors to performance in July. Crocs posted strong Q2 results that beat the highest estimates, and raised its full year forecast. Revenue growth was strong in all regions, especially Americas. Inchcape reported strong first half results and upgraded full year guidance due to good performance in all regions, higher margins, and the ongoing benefit of its overhead reduction program. The company also announced a £100 million share buyback program.
• Cinemark and SK Hynix were among the top individual detractors from performance in July. US-based theatre chain Cinemark suffered from reports that Disney’s “Black Widow” had netted $60 million from the Disney+ streaming service, indicating potential losses for theatre attendance. The COVID-19 Delta variant might also result in a slower recovery of theatre attendance. SK Hynix posted a strong Q2 result that beat analyst estimates, and also gave a bullish outlook for the rest of the year, expecting strong demand will continue into 2022. However, there were concerns that semiconductor companies may overshoot their production expansion, and memory chip cycle is passing its peak.
• During the month, Polaris completed the final sale of Verizon Communications, in favour of more attractive investment opportunities
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-2.pdfJune, 2021
The Fund returned -1.99% in June 2021, compared with a return for the Benchmark of 2.40%, as market fears of a sustained surge in inflation tempered, to the detriment of value stocks. • After several quarters of value outperforming growth, this trend reversed sharply in June. The primary driver was a shift in tone from the US Federal Reserve, which guided a path towards future monetary tightening, albeit still very accommodative by almost any measure. Most GICS sectors moved higher, led by IT, while Financials and Materials declined. For the Fund, the largest relative sector detractors were an underweight to IT and the absence of index heavyweights Apple and Nvidia from the portfolio, as well as an overweight to Financials. • Crocs and Microsoft were among the top individual contributors to performance in June. Crocs continues to exceed expectations as demand for their comfortable footwear is exceptionally strong. Working from home, outdoor living, children and medical professionals are all key drivers. Margins are robust, supporting accelerated investment in distribution centres, marketing and expansion in future key geographies such as China. For Microsoft, the secular trend of digital transformation and cloud adoption continues to be a persistent tailwind.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ-1.pdfMay, 2021
The Fund returned 1.82% in May 2021, compared with a return for the Benchmark of 0.99%, with investor enthusiasm around a strong global macroeconomic backdrop driving equity markets higher.
• The value component of the market continued to perform well in May, and cyclical GICS sectors, including Energy, Financials and Materials saw the largest gains. The largest relative sector contributors for the Fund were holdings in Consumer Discretionary, such as Kia Corporation and Next, and in Communication Services, including LG Uplus and Cinemark. Holdings in Materials, namely Antofagasta, and in Financials, such as Svenska Handelsbanken, were the largest relative detractors, partially offset by overweights to both sectors.
• Marathon Petroleum and Popular were among the top individual contributors to performance in May. Marathon finally announced intentions to buy back $10 billion in equity over the next 12 to 18 months, including $4 billion in a Dutch auct
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Polaris-Global-Equity-Fund-Hedged-Performance-Report-PRRP-PGEFH-ANZ.pdfMarch, 2021
The Fund returned 3.46% in March 2021, compared with a return for the Benchmark of 3.53%, as investor optimism around the level of fiscal and monetary stimulus drove global equities higher across the month. • All GICS sectors moved higher in March, with Financials, Industrials and Consumer Staples making the largest contributions to benchmark performance. Consumer Discretionary was again the top relative contributor for the Fund, owing to positive selection in German Consumer Discretionary and underweight positioning in Chinese Consumer Discretionary. Information Technology was the largest relative sector detractor for the Fund, as a result of stock selection and overweight positioning in US IT and overweight positioning in South Korean IT. • Key developed markets were positive for the month, led by the US, while Chinese equity markets declined.
For the Fund, the largest relative country contributor was China, driven by underweight positioning in Chinese Consumer Discretionary, as mentioned, and in Chinese Communication Services. Germany was also a positive relative contributor, due to positive selection in Germany Consumer Discretionary, as mentioned. The US was the largest relative detractor, primarily due to stock selection and overweight positioning in US IT, as mentioned, as well as underweight positioning in US Industrials. • Arrowstreet employs a quantitative benchmark-aware approach, dynamically taking overweight and underweight positions in countries, sectors, and individual stocks, with the aim of achieving long-term outperformance of the Benchmark. Arrowstreet’s core investment style seeks to outperform during a broad range of market environments, and its systematic quantitative approach allows Arrowstreet to react quickly through market volatility.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/170122469.pdfasset_class:
asset_category:
peer_benchmark:
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manager_contact_details: Array
ticker: MAQ2806AU
release_schedule: Monthly
structure: Managed Fund
commentary_block: Array
factsheet_url:
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fund_features:
Polaris Global Equity (Hedged) aims to achieve a long-term total return (before fees and expenses) that exceeds the MSCI World ex Australia Index, in $A hedged with net dividends reinvested (Benchmark).
- The Fund invests in the Polaris Global Equity Fund.
- The Fund aims to achieve a long-term total return (before fees and expenses) that exceeds the MSCI World ex Australia Index, in $A unhedged with net dividends reinvested.