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%. Best performing sectors were Information Technology and Utilities, while weakest sectors were Healthcare and Materials. The largest positive contributors to index returns were Xero, James Hardie and Woodside. On the other hand, significant detractors were BHP, CSL and NAB.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q2-JUN-2023-1.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.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Monthly-Report-MAR-2023-2.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-V2-2.pdfSeptember, 2022
Australian shares were positive over the quarter 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%. The best performing sectors were Energy and Healthcare, while the weakest performing sectors were Utilities and Real Estate. The largest positive contributors to the return of the index were Pilbara Minerals, CSL and Whitehaven Coal. On the other hand, the most significant detractors from performance were BHP, Transurban and Macquarie Group.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q3-SEP-2022-3.pdfJune, 2022
During the second quarter of 2022, the fund underperformed the index by 0.5%. Australian equities declined across the board over the quarter, amid concerns over rising interest rates and downside risks to economic growth. The sudden hiking of interest rates by the RBA in light of rampaging inflation saw a widespread repricing of risk across asset classes. Sector allocation in the fund mostly had a neutral impact on excess returns with an overweight to financials and an under weight to resources being the most significant positive contributors while an underweight to industrials being the most significant detractor. Security selection had a negative impact over the quarter. Overweight holdings in QBE Insurance Group and Medibank Private were the most significant contributors while an underweight to Transurban Group and an overweight in Sims Ltd detracted from performance.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q2-Jun-2022.pdfMarch, 2022
During the quarter both stock selection and asset allocation detracted from performance. Underweight positions in Woodside Petroleum and Westpac, and an overweight position in Aristocrat Leisure were key drivers of underperformance. This was partially offset by overweight holdings in Santos and IGO which both contributed positively. From an asset allocation perspective, overweight exposure to consumer discretionary and communications services sectors detracted, while overweight exposure to the energy sector and underweight exposure to real estate contributed positively to performance.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-Q1-Mar-2022-1.pdfJune, 2021
During the quarter stock selection marginally detracted from performance, whilst asset allocation had a slight contribution to positive excess returns. Stock selection within both the industrial and materials sectors detracted from performance, driven by overweight allocations to Qantas and Oz Minerals. Stock selection within the healthcare sector was positive, driven by an overweight exposure to ResMed. The overweight allocation to communication services also contributed positively for the quarter, as did underweight allocations to utilities and materials.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Mercer-Funds-quarterly-report-Q2-2021.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.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: MIN0006AU
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 relevant fund
release_schedule: Quarterly
fund_features:
Mercer Australian Shares Fund aims to exceed the benchmark, before management costs, over the medium to long term. The Fund provides exposure to the Australian share market utilising an actively managed, multi-manager approach.
- Diversification is achieved at the manager, sector and stock levels, with a focus on operational efficiency and sustainability.
- ESG considerations, including labour standards, climate change, and principles of sustainable investment are incorporated throughout the Fund’s investment decision making and ownership practices.
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