June, 2023
Australian shares were positive over Q2 2023 as the S&P/ASX 300 Index returned 1.0% for the period. The S&P/ASX Mid 50 Accumulation Index was the strongest segment of the market, returning 4.6% over the quarter. On the flipside, the S&P/ASX Small Ordinaries was the weakest of the local indices at -0.5%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q2-JUN-2023-1-1.pdfMarch, 2023
Risk asset returns were mixed over March, whilst defensive assets delivered gains as markets digested financial sector developments in the US and Europe.
Financial distress at a California-based regional bank culminated in the second biggest US bank failure in history. Two other regional banks also went into administration. Outside the US, investors digested UBS’s takeover of Credit Suisse and subsequent turmoil in bond markets. Swiss authorities let Credit Suisse’s riskiest bonds be wiped out, while equity holders received a small amount of equity in UBS as part of the transaction. While these issues were seen as idiosyncratic and largely driven by poor management of individual banks, there is a pattern of weaker businesses struggling amid high interest rates and declining market liquidity.
Employment and activity data continued to be resilient in the US with signs of recovery emerging from the UK and Europe. Inflation in the US continued to trend down. However, inflation fell by less than expected in the Eurozone and rose in the UK. Central banks consequently hiked rates by 25 bps in the US / Eurozone and 50 bps in the UK.
Over March, Hedged Developed Markets Overseas Shares returned 2.5%, most sectors posted positive returns, although financials sold off strongly amid the banking turmoil. Cyclical areas of the market such as small-caps and energy also struggled.
Emerging Market Shares (UH) marginally underperformed unhedged Overseas Shares in March. China, Taiwan and Korea had modestly positive returns in USD terms, whilst Brazil experienced slightly negative returns.
Hedged Overseas Government Bonds returned 2.6% over the month as bond yields fell sharply across the developed world. In the US, 10-year and 30-year bond yields fell 44bps and 26bps, respectively. In developed markets outside the US, 10-year yields fell by 20–50 bps. US inflation expectations, as measured by the 10-year inflation breakeven rate, fell from 2.4% to 2.3%. Australian Bonds also produced a positive return of 3.5% over the month as yields decreased.
Since the demise of Silicon Valley Bank and emergency merger of Credit Suisse and UBS, liquidity in fixed income markets has diminished and fundraising has slowed with limited corporate bond issuance or IPO activity.
Australian Shares returned -0.2%, underperforming their overseas counterparts in March. Materials (5.6%) and Communication Services (3.3%) were the strongest sectors, meanwhile Property (-6.9%), and Financials (-4.9%) were the largest detractors.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Monthly-Report-MAR-2023-2-1.pdfDecember, 2022
The fund underperformed the benchmark over the quarter by 1.0% as both stock selection and asset allocation had a negative contribution. Overweight positions in James Hardie and ResMed alongside an underweight to Fortescue Metals were the major detractors from performance. This was partially offset by overweights to Origin Energy, Fisher & Paykel, and Qantas, which contributed to performance over the quarter. From an asset allocation perspective, an overweight to health care and an underweight to financials detracted from performance, while an underweights to consumer staples and an overweight to energy contributed.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q4-DEC-2022-V2-1.pdfSeptember, 2022
Australian shares were positive over Q3 2022 as the S&P/ASX 300 Index returned 0.5% for the period. The S&P/ASX Mid 50 Accumulation Index was the strongest performer for the quarter returning 5.2%, while the S&P/ASX Small Ordinaries was the weakest performer, returning -0.5%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q3-SEP-2022-2.pdfJune, 2022
Australian shares were negative over Q2 2022 as the S&P/ASX 300 Index returned -12.2% for the period. The S&P/ASX 50 Accumulation Index was the strongest performer for the quarter returning - 10.6%, while the S&P/ASX Small Ordinaries was the weakest performer, returning -20.4%. The best performing sectors were Energy and Utilities, while the weakest performing sectors were IT and Real Estate.
The largest positive contributors to the return of the index were CSL, BHP and Transurban. On the other hand, the most significant detractors from performance were Westpac, ANZ and Macquarie.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q2-Jun-2022-2.pdfMarch, 2022
Australian shares were positive over Q1 2022 as the S&P/ASX 300 Index returned 2.1% for the period. The S&P/ASX 50 Accumulation Index was the best performer for the quarter returning 4.0%, while the worst performer was the S&P/ASX Small Ordinaries returning -4.2%.
During the first quarter of 2022, both stock selection and asset allocation drove underperformance with stock selection being the most significant. An underweight exposure to Wesfarmers and an overweight exposure to Sims Ltd provided the largest positive contribution to performance while an overweight to James Hardie Industries Plc was one a key driver of underperformance. From a sector perspective, an overweight allocation to health care and underweights to energy and materials were the main detractors while an underweight allocation to consumer discretionary was the most positive contributor..
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q1-Mar-2022-2.pdfJune, 2021
Absolute fund performance was strong over the quarter (9.3%), outperforming the S&P ASX Small Ordinary index by 0.8% Stock selections and sector positioning added value over the quarter. At the sector level, overweight allocations to the industrials and consumer discretionary sectors, and underweight allocations to consumer discretionary sectors, and underweight allocations to consumer staples contributed strongly to outperformance.
The Broad MSCI World ex Australia (NR) increased 7.6% in hedged terms and increased 9.3% in unhedged terms over the quarter. Over the June quarter The NASDAQ increased 9,5% the S&P 500 Composite index increase 8.5% and the DOW Jones Industrial Average increased 5.1% all in USD terms
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-quarterly-report-Q2-2021-3.pdfDecember, 2020
During the quarter stock selection contributed towards positive performance, whilst asset allocation detracted. Utilities (UW) and industrials (OW) were the key drivers of outperformance over the quarter, however an underweight position in consumer discretionary and information technology names were the key detractors for the quarter as growth names outperformed. Overweight holdings of both Qantas and Virgin Money were the key drivers of positive performance along with an underweight position in ASX Limited. Despite this and underweight allocation to Afterpay Limited did detract overall.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/MMF-quarterly-report_Q4-2020-1.pdfSeptember, 2020
Manager performance
Over the quarter, asset allocation and stock selection contributed positively to performance. Consumer Discretionary (OW), Financials (UW) and Materials (OW) were all positive from an asset allocation perspective. Cash holding, IT (UW) and Real Estate (UW) detracted from performance. At a stock selection level positive contributions came from Charter Hall (OW), OZ Minerals (OW), A2 Milk (UW) and Westpac Banking Corp (UW) while AfterPay (UW) and Telstra Corp (OW) were the key detractors.
ticker: MIN0020AU
commentary_block: Array
factsheet_url:
https://www.multimanager.mercer.com.au/fund-facts/single-sector-funds.html Go to quarterly reports, then Manager Performance select Australian Shares section
release_schedule: Quarterly
fund_features:
Mercer Australian Shares Plus Fund provides exposure to the Australian share market utilising an actively managed, multi-manager approach. The investment managers appointed use a range of complimentary higher return seeking investment styles. Diversification is achieved at the manager, sector and stock levels, with a focus on operational efficiency and sustainability.
- It aims to exceed the benchmark (S&P /ASX 300 Accumulation Index), before management costs, over the medium to long term.
- The investment managers appointed use a range of complimentary higher return seeking investment styles.
- Suitable for investors who focus on higher return – seeking investment strategies.
manager_contact_details: Array
asset_class: Domestic Equity
asset_category: Australian Multi-Manager
peer_benchmark: Domestic Equity - Multi-Manager Index
broad_market_index: ASX Index 200 Index
structure: Managed Fund