September, 2020
The Antares Elite Opportunities Fund delivered a return of -2.3% (net of fees) for the month of September 2020.1 Australian shares performed poorly in September. The Energy sector recorded the largest falls on falling oil prices and expectations for asset write-downs as anti-carbon sentiment increases. Following a strong run over recent months, the Information Technology sector declined in line with a more cautious global appetite. Financial sector shares were also weak with concerns over rising doubtful debts as the ‘Jobkeeper’ and ‘loan repayment deferral’ programs taper off. The only significant bright spot in September was a small gain for the healthcare sector. Performance was boosted by overweight holdings in James Hardie (JHX), Aristocrat Leisure (ALL) and Boral (BLD). The strength in US housing demand continues. Locally the home building sector has been resilient with share prices also supported by the anticipated stimulus measures in the Federal Government budget. These factors have been seen as beneficial to both JHX and BLD. Investor interest in sectors, including gaming, that will open up post coronavirus-related closures boosted ALL shares during September. Detracting from performance were overweight positions in Santos (STO), Oil Search (OSH) and Virgin Money UK (VUK). The oil price weakened over the month, reflecting the continuation of weak demand due to coronavirus restrictions as well as more commentary on the structural shift to electric vehicles. Both STO and OSH shares were weaker. Also out of favour were VUK shares which exited the S&P/ASX 100 during September. It was also a month in which the UK experienced a second wave of the coronavirus and accompanying disruption and uncertainty. Australia’s economic signals are mixed. On the plus side, the recent revival in employment continues, with August recording job gains of 111,000 and the unemployment rate edging down from 7.5% to 6.8%. Consumer sentiment also rebounded in September. Countering this is confirmation that the Australian economy is in a deep recession, with the economy contracting by 7% in the June quarter, the largest decline since quarterly data started in 1959. There was further bad news with retail spending falling 4.2% in August given Melbourne’s virus lockdown. Some state borders are opening up but the majority remain closed, with 1 November (after the Queensland election) flagged as the possible opening for QLD/NSW. Victoria remains isolated. In the US, it’s not just the presidential election result, but its validity and timing that is creating uncertainty. President Trump’s confirmation that he has coronavirus has added to confusion around how it will play out. While volatility appears to have diminished, uncertainty remains.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/fund-profiles-antares-elite-opportunities-fund.pdfticker: PPL0115AU
commentary_block: Array
factsheet_url:
asset_class: Domestic Equity
asset_category: Australia Large Blend - Core / Style Neutral
peer_benchmark: Domestic Equity - Large Cap Neutral Index
broad_market_index: ASX Index 200 Index
structure: Managed Fund