September, 2023
The Fund was down 5.29% over the month of September. At the sector level, real estate was the largest detractor, followed by utilities and industrials. While at the stock level, Genesis Energy, Ingenia Communities Group and Meridian Group were positive contributors, it was more than offset by Scentre Group, Digital Realty Trust, Charter Hall and Stockland who where among the largest detractors in the Fund over the month of September.
Within the Fund, positives included US data centre REIT Digital Realty Trust rose on the back of tech company Nvidia’s strong second quarter earnings result, which beat expectations, and positive sentiment around AI. The AI boom is seeing increasing demand for Nvidia’s capabilities, and DLR is well-positioned to leverage opportunities in generative AI through its global data centre footprint. HealthCo Healthcare and Wellness REIT’s defensive attributes (low economic sensitivity and solid pricing power through its CPI rental linkages) came through this quarter, with the stock performing well in a higher rate environment. As mentioned above, New Zealand integrated utilities performed well due to their pricing power on the back of continued higher energy prices, with renewable energy utility Contact Energy a top contributor.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-21.pdfAugust, 2023
The Fund was down 2.91% over the month of August. At the sector level, utilities were the largest detractor, followed by real estate and infrastructure. While at the stock level, Digital Realty Trust, HomeCo Daily Needs REIT and Contact Energy were the largest positive contributors, while AGL Energy, Region Group and Chorus were the biggest detractors.
Within the Fund, positives included US data centre REIT Digital Realty Trust (DLR) rose on the back of tech company Nvidia’s strong second quarter earnings result, which beat expectations, and positive sentiment around AI. The AI boom is seeing increasing demand for Nvidia’s capabilities, and DLR is well-positioned to leverage opportunities in generative AI through its global data centre footprint. HomeCo Daily Needs REIT also released a relatively strong FY23 result, with lower debt costs driven by hedge restructuring and no capital outlay. On the other side, electricity and gas retailer AGL Energy gave back following strength in recent months despite releasing an FY23 result that hit the very top of guidance. Supermarket landlord Region Group also released an in-line FY23 result which showed strong headline gross rents; however, the result was dragged down by growing property expenses and higher debt costs, with the Group’s FY24 growth outlook also impacted.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-20.pdfJuly, 2023
The Fund was up 2.55% over the month of July. At the sector level, real estate was the largest positive contributor, followed by utilities, while infrastructure detracted.
At the stock level, positives within the Fund included electricity and gas retailer AGL Energy continuing its strong run post its earnings guidance upgrade in June, where management cited higher wholesale power prices and improved performance at its power plants since last year’s extended outages. US data centre REIT Digital Realty Trust released its better than expected second quarter result which showed improved leasing activity and higher leasing spreads.
On the other side, rail infrastructure group Aurizon Holdings drifted lower during July following its rally during the prior few months. During July Aurizon held an investor day where it provided earnings guidance in-line with our expectations and flagged the potential to increase capex on new opportunities around Land bridging container movements from Darwin into the major capital cities. TC Energy Corp (TRP) which operates pipelines, storage facilities and power-generation plants in Canada, the US and Mexico, was weak following the release of its result. While the result was in-line with expectations, TRP fell on the back of the sale of its stake in its US gas pipeline business which was transacted on a lowish multiple. Additionally, there is some uncertainty around TRP spinning out its oil pipeline assets.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-19.pdfJune, 2023
The Fund was up 0.78% over the month of June. At the sector level, Industrials and Utilities were the main contributors to performance in June. At the stock level, Utilities providers AGL Energy and Industrials company Aurizon Holdings were both additive to performance. While Real Estate REITs Digital Realty Trust and Abacus Property Group were also among the best performers over the month. On the other side, Real Estate REITs Region Group and Dexus Industrial REIT were all among the main detractors, over the month of June.
The Fund is now forecasted to provide a dividend yield of 6.18% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-18.pdfMay, 2023
The Fund was down 0.66% over the month of May. At the sector level, Industrials and Utilities were the main contributors to performance in May. At the stock level, Utilities providers AGL Energy and Contact Energy were additive to performance. While Industrials company Aurizon Holdings and Real Estate REITs Digital Realty Trust and Region Group were also among the best performers over the month. On the other side, Real Estate REITs Scentre Group, Stockland and Vicinity Centres were all among the main detractors, over the month of May.
The Fund is now forecasted to provide a dividend yield of 6.12% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-17.pdfApril, 2023
The Fund was up 3.62% over the month of April. At the sector level, Real Estate and Utilities were the main contributors to performance in April. At the stock level, Real Estate providers Stockland, Scentre Group and Centuria Capital Group, and Utilities provider National Grid were among the best performers over the month. On the other side, Utilities providers Guangdong Investments, Genesis Energy and Contact Energy were among the main detractors, over the month of April
The Fund is now forecasted to provide a dividend yield of 6.04% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
The Australian real asset universe outperformed the broader Australian equity market in April. The listed real estate market was up 5.2% in April (as measured by the S&P/ ASX 300 A-REIT Accumulation Index). Infrastructure was up 2.3% in April (as measured by the S&P/ASX Infrastructure Accumulation Index). Utilities were up 1.4% in April (as measured by the S&P/ASX 300 Utilities Accumulation Index). In comparison, the Australian equity market rose 1.8% in April (as measured by the S&P/ASX 200 Accumulation Index).
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-16.pdfMarch, 2023
The Fund was down 2.03% over the month of March. At the sector level, Real Estate and Industrials were the main detractors to performance in March. At the stock level, Utilities providers AGL Energy, National Grid and Contact Energy were among the best performers over the month, while communication services provider Chorus was also a contributor. On the other side, Real Estate companies Scentre Group and HomeCo, and Industrials company Atlas Arteria Group were among the main detractors, over the month of March.
The Fund is now forecasted to provide a dividend yield of 6.24% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-15.pdfFebruary, 2023
The Fund was down 1.54% over the month of February. At the sector level, Real Estate and Industrials were the main detractors to performance in February. At the stock level, Utilities providers National Grid and Emera, and Real Estate REITs National Storage were among the best performers over the month, while toll road operator Transurban Group was also a contributor. On the other side, Industrials provider Aurizon, Utilities provider AGL Energy and Real Estate REITs providers Ingenia Communities Group and Digital Realty Trust were among the main detractors, over the month of February.
The Fund is now forecasted to provide a dividend yield of 5.83% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-14.pdfJanuary, 2023
The Fund was up 3.00% over the month of January. At the sector level, Real Estate and Industrials led the way over the period, while Communications Services and Utilities were also mildly positive contributors in January. At the stock level, Real Estate REITs Scentre Group and Stockland were among the best performers over the month, while toll road operator Transurban Group was also a strong contributor. On the other side, Utilities providers AGL Energy and Contact Energy were among the main detractors, while Industrials company Aurizon was also a detractor over the month of January.
The Fund is now forecasted to provide a dividend yield of 5.99% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-13.pdfDecember, 2022
The Fund was down 1.20% over the month of December. At the sector level, Utilities and Communications Services were the positive contributors to performance over the period, while Real Estate and Industrials detracted from performance in December. At the stock level, Utilities providers Guangdong Investment and Contact Energy were among the best performers over the month, while Communication Services company Chorus was also among the positive contributors to positive performance in December.
On the other side, toll road operators Transurban Group and Atlas Arteria Group were among the main detractors, while property REIT Digital Realty Trust was also a detractor over the month of December.
The Fund is now forecasted to provide a dividend yield of 6.17% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-12.pdfNovember, 2022
The Fund was up 3.79% over the month of November. At the sector level, Industrials, Utilities and Real Estate were all positive contributors to performance over the period. At the stock level, toll road providers Atlas Arteria Group and Transurban Group were among the best performers over the month, while Utilities provider AGL Energy was also a strong contributor to positive performance in November. On the other side, property REITs National Storage REIT and Abacus Property Group were among the main detractors, while Utilities provider Genesis Energy was also a detractor over the month of November.
The Fund is now forecasted to provide a dividend yield of 5.97% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-11.pdfOctober, 2022
The Fund was up 7.8% over the month of October. At the sector level, all sectors were positive contributors with Real Estate the best performer followed by Industrials, Utilities and Communications Services which were also positive contributors to performance over the period. At the stock level, property REITs SCA Property Group, Scentre Group and National Storage REIT were among the best performers over the month. On the other side, Utilities providers Emera, Contact Energy and AGL Energy were among the main detractors over the month of October.
The Fund is now forecasted to provide a dividend yield of 6.3% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-10.pdfSeptember, 2022
The Fund was down 11.1% over the month of September. At the sector level, all sectors were negative contributors, with Real Estate the main detractor followed by Industrials and Utilities. At the stock level, Utilities provider Meridian Energy was the only positive contributor to performance. On the other side, Industrials company Altas Arteria Group and property REITs Scentre Group and SCA Property Group were the main detractors over the month of September.
The Fund is now forecasted to provide a dividend yield of 6.4% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-9.pdfAugust, 2022
The Fund was down 3.82% over the month of August. At the sector level, all sectors were negative contributors, with Real Estate the main detractor followed by Utilities and Industrials. At the stock level property REITs, Scentre Group, Atlas Arteria Group were the largest positive contributors to performance. On the other side, SCA Property Group, AGL Energy and Centuria Office REIT was the main detractors over the month of August. The Fund is now forecasted to provide a dividend yield of 5.66% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-8.pdfJuly, 2022
The Fund was up 7.40% in the month of July. At the sector level, all sectors were positive contributors, with Real Estate leading the way in July, followed by Utilities and Communication Services which were also accretive to positive performance. At the stock level property REITs, Scentre Group, Vicinity Centres, SCA Property Group and Charter Hall were the largest contributors to performance. On the other side, Industrials Atlas Arteria Group and property REITs Australian Unity Office Fund were slight detractors from performance.
The Fund is now forecasted to provide a dividend yield of 5.53% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-7.pdfJune, 2022
The Fund was down 5.28% in the month of June. At the sector level, Industrials led the way in June, while Utilities and Real estate were drags to the Funds performance. At the stock level, Industrials Atlas Arteria Group and Transurban Group were the largest contributors to performance, while Utility APA Group was also a notable positive contributor to performance. On the other side, Real estate companies Scentre Group, Centuria Industrial REIT and Charter Hall Retail RIET were all detractors from performance.
The Fund is now forecasted to provide a dividend yield of 5.92% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-6.pdfMay, 2022
The Fund was down 5.09% in the month of May. At the sector level, Industrials led the way in May, While Utilities, Communication Services and Real estate were all detractors to performance. At the stock level, Atlas Arteria Group and AGL Energy were the largest contributors to performance. On the other side, Centuria Capital Group, Abacus Property Group and Centuria Industrial REIT were notable detractors to performance.
The Fund is now forecasted to provide a dividend yield of 5.62% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-5.pdfApril, 2022
The Fund was up 1.67% in the month of April. At the sector level, Industrials led the way in April, followed by Utilities and Real estate which were also both accretive to positive performance. At the stock level, Utilities, AGL Energy and APA Group were the largest contributors to performance, while Industrials Transurban and Aurizon Holdings were also notable positive contributors to performance. On the other side, Real estate companies Stockland, Ingenia Communities Group and Scentre Group were all detractors from performance.
The Fund is now forecasted to provide a dividend yield of 5.34% (grossed up for franking credits) over the next 12 months on a forward-looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-4.pdfMarch, 2022
The Fund was up 2.48% in the month of March. At the sector level, Real estate was the largest contributor to positive performance, followed by Utilities, while Industrials was also a strong contributor to performance. At the stock level, Transurban Group, APA Group and Genesis Energy were the largest positive contributors, while HomeCo Daily Needs REIT, Abacus Property Group and Mirvac Group were the biggest detractors.
The Fund is now forecasted to provide a dividend yield of 5.37% (grossed up for franking credits) over the next 12 months on a forward looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-3.pdfFebruary, 2022
The Australian real asset universe slightly underperformed the broader Australian equity market in February. The listed real estate market was up 1.5% in February (as measured by the S&P/ASX 300 A-REIT Accumulation Index). Infrastructure was up 2.4% in February (as measured by the S&P/ASX Infrastructure Accumulation Index). Utilities were up 3.4% in February (as measured by the S&P/ASX 300 Utilities Accumulation Index). In comparison, the Australian equity market rose 2.1% in February (as measured by the S&P/ASX 200 Accumulation Index).
During the Australian company reporting season, the key themes for real assets were: The reopening theme, with high end shopping malls strongest on cashflow recovery outlook with strong leasing demand, daily needs retail seeing upgrades with rents following strong tenant sales up. Pricing power evident in suburban exposed names like storage, industrial and everyday needs retail where foot traffic and tenant demand are strongest. Rising energy prices and more corporate activity, e.g., AGL Energy strength and opportunistic corporate bid and APA Group’s strength with gas’s role in energy transition.
The Fund was up 3.0% in the month of February. At the sector level, real estate was the largest contributor to positive performance, followed by Utilities, while Industrials was also a marginal contributor to performance. At the stock level, Vicinity Centres, Scentre Group and HomeCo Daily Needs REIT were the largest positive contributors, while Genesis Energy, Irongate Group and Ingenia Communities Group were the biggest detractors. The Fund is now forecasted to provide a dividend yield of 5.43% (grossed up for franking credits) over the next 12 months on a forward looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-2.pdfJanuary, 2022
The Fund was down 5.89% in the month of January. At the sector level, real estate was the largest detractor, followed by infrastructure, while utilities were marginally negative. At the stock level, AGL Energy, Irongate Group and Genesis Energy were the largest positive contributors, while Centuria Capital Group, Scentre Group and Transurban Group were the biggest detractors. Electricity and gas retailer AGL Energy performed well as electricity spot and forward prices continue to increase, helped by rises in global energy prices as well as demand growth from recent hot weather and fewer COVID-19 social restrictions.
Suburban office and industrial owner Irongate Group rose at the end of January after receiving a bid from Charter Hall Group and Dutch pension fund manager PGGM. Centuria Capital Group was weaker despite upgrading FY22 OEPS guidance to14.5cps late in the month, with the upgrade representing a 20.8% increase above FY21 OEPS of 12.0cps and a 9.9% increase over the group’s initial FY22 OEPS forecast of 13.2cps. Shopping centre landlord Scentre Group was slightly softer than the wider REIT market, with a spike in local COVID-19 cases negatively impacting the discretionary shopping malls. While there was no Scentre specific news flow, we would note that lockdowns in the most populous States of Victoria and New South Wales were avoided and students returned to school as scheduled, which augers well for ongoing re-opening despite Omicron The Fund is now forecasted to provide a dividend yield of 5.58% (grossed up for franking credits) over the next 12 months on a forward looking basis.
File: https://commentary.quantreports.net/wp-content/uploads/2022/02/fund-commentary-mc-real-income-au-1.pdfDecember, 2021
The Australian real asset universe outperformed the broader Australian equity market in December. The listed real estate market was up 5.2% in December (as measured by the S&P/ASX 300 A-REIT Accumulation Index). Infrastructure was up 5.3% in December (as measured by the S&P/ASX Infrastructure Accumulation Index). Utilities were up 7.9% in December (as measured by the S&P/ASX 300 Utilities Accumulation Index). In comparison, the Australian equity market rose 2.7% in December (as measured by the S&P/ASX 200 Accumulation Index).
The Fund was up 5.26% in the month of December. At the sector level, Real Estate and utilities provided the main source of performance through the month, while industrials remained neutral. At the stock level utilities APA Group and SCA Property Group were standout performers. On the other side, Genesis Energy and Horizon Holdings were among the laggards. In terms of positioning, the Fund maintains a core weighting to REITs, followed by utilities and then industrials. The Fund has posted a solid return of 20.19% over the past 12 months, with REITs contributing the majority of absolute return over the period. The Fund is now forecasted to provide a dividend yield of 5.19% (grossed up for franking credits) over the next 12 months on a forward looking basis.
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