September, 2023
After fees and expenses, the Portfolio declined by 4.14% during the month, underperforming its benchmark by 11 bps.
The largest positive contributors were Generation Development Group, Monash IVF and Leo Lithium (not held). Generation Development Group jumped on speculation that the business may be a takeover target given recent consolidation in the funds management industry. Monash IVF traded higher after the release of Medicare statistics for August which showed total cycle growth of 20.3% on the prior corresponding period. Leo Lithium (not held) was suspended from listing pending correspondence from the Mali government in relation to their Goulamina Lithium project.
The largest negative contributors were Botanix Pharmaceuticals, Paladin Energy (not held) and XRF Scientific. Botanix Pharmaceuticals traded lower as FDA approval for their novel drug Sofpironium Bromide was delayed pending additional information regarding patient use instructions. Paladin Energy (not held) traded higher on the back of a stronger underlying Uranium price. Lastly XRF Scientific was sold off despite no stock specific news.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-2-1.pdfAugust, 2023
After fees and expenses, the Portfolio increased by 1.70% during the month, outperforming its benchmark by 301 bps.
The largest positive contributors were Botanix Pharmaceuticals, Energy One and Laserbond. Botanix Pharmaceuticals traded higher as the targeted FDA approval date for their novel drug Sofpironium Bromide was reaffirmed for end of September 2023. Energy One received a non-binding indicative offer for their business at $5.85/share being a 44% premium to its last traded price. Laserbond provided a strong FY23 result with revenue up 25.7% on pcp and net profit after tax up 31.1%.
The largest negative contributors were NextEd, XRF Scientific and PeopleIn. Tertiary education provider NextEd traded lower following a trading update highlighting the negative implications of the temporary COVID-19, 408 Visa on their business which has since ceased. XRF scientific traded lower after reaching all time highs. PeopleIn was sold off after missing their pre-announced EBITDA guidance range of $62m-$66m for FY23, generating $60.9m.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-1-1.pdfJuly, 2023
After fees and expenses, the Portfolio increased by 2.23% during the month, underperforming its benchmark by 131 bps.
The largest positive contributors were Energy One, XRF Scientific and Murray Cod Australia. Energy One confirmed FY23 guidance will be met, with total revenue expected to be $44.5m and EBITDA of $12.3m. XRF Scientific reached new all-time highs, driven by strength in the mining and industrial sectors. Murray Cod Australia rallied after reiterating growth plan to achieve 10k tonnes of fish in 2030 and the successful recapture of escapee fish despite a provision of $2.6m previously made.
The largest negative contributors were NextEd, Lycopodium and Smartpay. Tertiary education provider NextEd updated the market with FY23 guidance which was slightly below expectations. The miss was largely a result of growing pains, where short-term classroom leases were booked as operating expenditure rather than being amortised. Lycopodium traded lower despite no stock specific news. Payment solution provider SmartPay reached all-time highs during the month but finished lower on fears of slower transacting volumes in the more challenging economic environment.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-9.pdfJune, 2023
After fees and expenses, the Portfolio increased by 2.19% during the month, outperforming its benchmark by 216 bps.
The largest positive contributors were Botanix Pharmaceuticals, Fleetwood and Lycopodium. Botanix Pharmaceuticals provided an update regarding their activities leading up to FDA approval date, initiating label negotiations and accelerating commercial activities ready for launch of its novel drug Sofpironium Bromide. Building solutions provider Fleetwood entered an accommodation agreement with Rio Tinto to supply 250 rooms, expected to generate a further $100-$120m in revenue over the period to April 2027. Engineering services provider Lycopodium was selected by Barrick Gold Corporation to complete the feasibility study and basic engineering scope for its Reko Diq Copper-Gold Project in Pakistan, valued around $55m.
The largest negative contributors were PeopleIN, Alliance Aviation Services and Paladin Energy (not held). Talent solutions business PeopleIN traded lower after concluding a strategic review announced in November 2022 which provided no new insights. Alliance Aviation Services continued to be sold off following the ACCC’s rejection of the takeover approach from Qantas Group. Uranium company Paladin Energy (not held) rallied on the back of the Namibian government confirming there are no imminent legislative changes that would impact its ownership of the Langer Heinrich Mine.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-8.pdfMay, 2023
After fees and expenses, the Portfolio decreased by 1.40% during the month, outperforming its benchmark by 186 bps.
The largest positive contributors were MaxiPARTS, SmartPay and Supply Network. MaxiPARTS announced and completed the acquisition of 80% of workshop consumables distributor Forch Australia which is expected to provide immediate incremental improvement to profit margins. Payment solution provider SmartPay outperformed after announcing its FY23 result which highlighted a 62% increase in revenue and 81% increase in EBITDA. Supply Network upgraded its FY23 guidance during May, highlighting that industry conditions remain very supportive.
The largest negative contributors were Lunnon Metals, Top Shelf International and XRF Scientific. Lunnon Metals traded lower, levered to the underlying Nickel price which traded around $20,430 USD/T down from monthly highs of over $24,950 USD/T. Top Shelf International fell after announcing it seeks to raise $40m at a 19% discount to the 10-day volume weighted average price. The funds will be used to reduce debt while supporting the launch of their agave spirit.
XRF Scientific retraced after reaching all-time highs, driven by strength in mining and industrial sectors.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-7.pdfApril, 2023
After fees and expenses, the Portfolio increased by 4.20% during the month, outperforming its benchmark by 142 bps. The largest positive contributors were XRF Scientific, Lycopodium and SmartPay. XRF Scientific continued to outperform, driven by strength in its mining and industrial sectors. Sales revenue was up 45% in the March quarter to $40.5m, with NPAT up 39% to $8.2m. Lycopodium provided a strong update, increasing full year NPAT guidance to $45m (previously $40m).
Payment solutions provider SmartPay highlighted terminal fleet growth of 62% and transaction revenue increasing 76% (y/y) in Australia. Additionally, they announced a strategic review of its New Zealand business to unlock greater value. The largest negative contributors were Alliance Aviation Services, Botanix Pharmaceuticals and Top Shelf International.
Alliance Aviation Services traded lower on the back of a negative ACCC decision which opposed Qantas’ proposed acquisition at $4.75/share. Botanix Pharmaceuticals conducted a $10m capital raise at a 10% discount to the last traded price to prepare for FDA approval and commercial launch of their novel drug Sofpironium Bromide. Top Shelf International continued to trade lower after a small capital raise to help fund the completion of their agave distillery, which was conducted at a 13% discount to the last traded price.
File:March, 2023
After fees and expenses, the Portfolio declined by 2.25% during the month, underperforming its benchmark by 153 bps.
The largest positive contributors were Monash IVF, NextEd Group and Mincor Resources. Reproductive and fertility services group Monash IVF traded higher on no stock specific news. Education business NextEd Group reached all-time highs as the market digested their stella 1H23 result, with record revenues of $43.6m (up 239% on pcp) and EBITDA of $6.6m (up 403% on pcp). Mincor Resources was subject to an on-market takeover bid from Andrew Forrest’s Wyloo Metals at $1.40/share representing a 35% premium to the last closing price of $1.04.
The largest negative contributors were Liontown Resources (not held), Janison Education and GR Engineering Services. Liontown Resources (not held) received a non-binding indicative proposal from Albemarle Corporation at $2.50/share. Janison Education was removed from the AllOrdinaries index which saw selling by passive index funds, further weighing on the share price. GR Engineering Services traded lower after paying a $0.09 dividend for the half year.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-6.pdfFebruary, 2023
After fees and expenses, the Portfolio increased by 0.76% during the month, outperforming its benchmark by 446 bps.
The largest positive contributors were Lycopodium, Ridley Corporation and XRF Scientific. Lycopodium provided a strong 1H23 update, increasing full year guidance across both revenue and NPAT reflecting a robust portfolio of projects and studies currently in delivery. Importantly, the business continues to be awarded new projects given high demand for base metal projects in support of the energy transition. Ridley Corporation posted a strong result, with EBITDA up 13% (y/y) to and NPAT up 20% (y/y). Management highlighted that despite challenging conditions they expect earnings growth in all business segments and improved asset utilisation. XRF Scientific continued to perform, driven by strength in the mining and industrial sectors. Sales revenue was up 46% on the pcp and NPAT was up 34%.
The largest negative contributors were Pacific Smiles, Mincor Resources, and Top Shelf International. Pacific Smiles traded lower after updating guidance to be at the bottom end of the previously advised range. Mincor Resources was sold off on the back of a weaker underlying Nickel price, in addition to a poor 1H23 result which flagged a slow ramp up of the Kambalda operation. Top Shelf International completed a capital raise to help fund the completion of their agave distillery, conducted at a 13% discount to the last traded price.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-5.pdfJanuary, 2023
After fees and expenses, the Portfolio increased by 1.92% during the month, underperforming its benchmark by 464 bps. The largest positive contributors were Smartpay, Codan and New Hope (Not Held). SmartPay provided an impressive trading update, confirming that total consolidated revenue had increased by 60% (y/y), with total transactions processed up 76%. Codan rallied on the back of a trading update which highlighted expectations of revenue hitting the top end of guidance, with NPAT likely to beat guidance at $31m for 1H23.
New Hope traded lower on the back of a weaker underlying coal price, which fell to recent lows of ~US$260/t during the month. The largest negative contributors were RPM Global, Ridley Corporation and Praemium. RPM Global traded lower on no new company specific news. Similarly, Ridley Corporation was modestly sold off after hitting all-time highs in recent months. Lastly, Praemium provided their 1H23 update confirming net flows of $1,016m which was 53% below the prior corresponding period, highlighting challenging market conditions and putting them on course to be well below FY23 guidance (~$2.9bn).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-4.pdfDecember, 2022
After fees and expenses, the Portfolio declined by 1.51% during the month, outperforming its benchmark by 222 bps.
The largest positive contributors were Liontown Resources (not held) fell on the back of a softer underlying lithium price following new concerns around the longer-term demand outlook, with weaker than expected electric vehicle sales in China. XRF Scientific traded higher despite no new company specific news post their positive Investor update in August. Lunnon Metals provided impressive drilling results at their Warren site, hitting their best intercept yet of 7.48m @ 4.46% Ni.
The discovery was significant given it opens up a new exploration region that was not historically considered prospective. The largest negative contributors were Calidus Resources, Champion Iron (not Held) and Chalice Mining (not held). Calidus Resources was sold off following after suboptimal blasting and mining practices caused lower mill throughput and temporary water shortages. Champion Iron rallied on the back of a stronger underling iron ore price. Chalice Mining rose after announcing a delay to its scoping study until they had released an updated mineral resource estimate following new metallurgical testing relating to the Julimar deposit.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-3.pdfNovember, 2022
After fees and expenses, the Portfolio increased by 2.42% during the month, underperforming its benchmark by 251 bps. The largest positive contributors were Supply Network, SmartPay and Janison Education. Supply Network rallied on the back of a trading update highlighting 1H23 revenue guidance of $116-$118m and NPAT of $12-$12.5m. SmartPay provided an impressive update confirming that over the prior six months, terminal market share had grown 1.1% from 3.9% to 5.0%. Janison Education continued to trade higher on the back of media speculation regarding possible corporate activity, appointing E&P Corporate Advisory to assist with evaluating approaches from third parties. The largest negative contributors were Ridley Corporation, GR Engineering and RPM Global. Ridley Corporation was sold off despite the company reaffirming its outlook, with 1H23 EBITDA expected to improve on the prior corresponding period. GR Engineering disappointed the market, providing a revenue forecast of $500-$530m for FY23, a significant reduction on FY22 revenue of $652m. Finally, RPM Global traded lower after rallying on reaffirmed guidance in the prior month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-2.pdfOctober, 2022
After fees and expenses, the Portfolio increased by 0.25% during the month, underperforming its benchmark by 621 bps. The largest positive contributors were RPM Global, XRF Scientific and Praemium. RPM Global rallied as the company continued with its share-buyback program, confirming the board’s view that the company’s shares remain undervalued, and after reaffirming revenue and earnings guidance for FY23 at its AGM. XRF Scientific released its quarterly update, highlighting 32% revenue growth and 45% growth in profit before tax, driven by a strong mining sector and buoyant demand for capital equipment products. Praemium continued to rerate after reporting higher than expected net flows in 1Q23, taking total funds under administration (FUA) to $41.4 billion. In addition, the market responded positively to the company’s higher than expected cash holdings, which provide strong support to revenue margins. The largest negative contributors were Calidus Resources, Mincor Resources and Codan. Calidus Resources released an operational update which disappointed the market, with mill head grade gold of 0.78g/t far below expectations for 1.01g/t. Mincor Resources underperformed after reporting a 1Q23 result which was far weaker than expectations, with the slow ramp up of operations driving soft production guidance and higher all-in sustaining costs. Codan was sold off on a significant deterioration in metal detection sales into Africa, reflecting geopolitical unrest and product oversupply in market. Guidance for 1H23 was also underwhelming, down 42-45% on the prior corresponding period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap-1.pdfSeptember, 2022
After fees and expenses, the Portfolio declined by 7.71% during the month, outperforming its benchmark by 349 bps. The largest positive contributors were AVZ Minerals (not held), Lycopodium, and iCollege. AVZ Minerals was suspended from listing pending an announcement regarding their mining and exploration rights at their pre-production Lithium mine in the DRC (Congo). Lycopodium continued to deliver, awarded the services contract for Endeavour Gold Corporation’s SabodalaMasawa Expansion Project. Lycopodium was initially awarded the early works and will now receive the total contract value of over $26m highlighting their ability to execute and capitalise on this long standing relationship. iCollege was a new addition to the portfolio leveraged to the reopening of Australia, benefiting from the influx of international students attending our universities. The business expects to continue to execute on their growth strategy given the tail-winds emerging in student markets. The largest negative contributors were New Hope (not held), EnviroSuite and Mincor Resources. New Hope (not held) continued to trade higher on the back of a strong underlying coal price making operations extremely profitable. EnviroSuite traded lower despite no company specific news. Mincor resources was sold off on the back of a lower underlying Nickel price as the possibility of an economic recession, which would significantly hinder the near-term demand outlook for the commodity.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/ubs_microcap.pdfJuly, 2022
After fees and expenses, the Portfolio increased by 9.22% during the month, underperforming its benchmark by 221 bps. The largest positive contributors were Praemium, Jayride and Monash IVF. Praemium bounced off recent lows following the release of their quarterly update highlighting net inflows for the financial year of $2.9bn up 92% on the prior corresponding period. Jayride reached the key milestone of a positive free cash flow quarter with a record 136,000 trips booked, well above pre-pandemic levels.
Monash IVF announced the acquisition of ART Associates Queensland providing a strategic expansion to the existing Brisbane business. The acquisition included 6 fertility specialists who are anticipated to transition patients over to Monash IVF, increasing group earnings per share of between 5-10%. The largest negative contributors were Ridley Corporation, Alliance Aviation and RPM Global. Ridley Corporation fell on no company specific news however the outbreak of foot and mouth disease in neighbouring Indonesia was a cause for concern. Alliance Aviation traded lower as the ACCC ruling on the proposed takeover from Qantas at $4.75/share neared. RPM Global ended the month lower despite providing a positive update on software subscriptions which increased by $5.6m to $55.9m in the final four days before the end of financial year.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/189860777.pdfMay, 2022
After fees and expenses, the Portfolio decreased by 7.45% during the month, underperforming its benchmark by 44 bps. The largest positive contributors were Alliance Aviation, Ridley Corporation and Infomedia. Alliance Aviation rallied on the back of news that an agreement had been reached with Qantas to fully acquire the company in a deal worth $4.75 per share, subject to ACCC approval. Ridley Corporation also traded higher after providing further detail on their growth plans, which are anticipated to deliver total shareholder returns of 15% p.a. over the next two financial years. Infomedia received competing takeover proposals during the period. Private equity firm TA Associates lobbed the first bid at $1.70 per share, a 33% premium to its last traded price, before Batter Ventures subsequently proposed an improved offer of $1.75 per share.
The largest negative contributors were Atomos, Pacific Smiles and Calidus Resources. Atomos traded lower after reducing revenue guidance from $95m to between $80-$90m and its EBITDA margin from 12-15% to 6-8%. Pacific Smiles was sold off on the back of an April trading update confirming patient fees declined 8.2% YoY, highlighting the business continues to be disrupted by COVID-19 resulting in poor patient attendance and practitioner availability. Calidus Resources traded lower following a weakened underlying gold price despite reaching the milestone of its first Gold pour.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/188132401.pdfJanuary, 2022
After fees and expenses, the Portfolio declined by 5.88% during the month, outperforming its benchmark by 312 bps. The largest positive contributions were Lunnon Metals, Calidus Resources and PTB Group. Lunnon Metals provided multiple updates on the progress of their exploration programme at Baker shoot. The drilling results confirm the high grade, near surface resource with intercepts of 7.0m @ 9.22 Ni and 10m @6.82 Ni far exceeding the 1% Ni cut-off grade. Calidus resources announced a 50/50 joint venture in new Pilbara Lithium exploration company Pirra Lithium, providing optionality and potentially additional value to shareholders. This will have no bearing on their core asset at Warrawoona, which has its first gold pour scheduled for this quarter. PTB Group provided its preliminary half-year results, highlighting strong trading conditions in the USA and Asia pacific regions resulting in a 44% increase in revenue (y/y).
The largest negative contributors were Brainchip (not held), RightCrowd and Champion Iron (not held). Brainchip jumped higher after announcing full commercialistion of a new AI processor. RightCrowd released their FY22 Q2 quarterly results, generating $4.2m of revenue which was 5% below the prior corresponding period. Nonetheless, ARR has achieved 50% growth on the prior year. Champion Iron was stronger on the backdrop of improving iron ore prices following continued strong demand from China which is using monetary policy tools to spur the economy, brightening the outlook for iron ore and raw materials more broadly.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/184034438.pdfDecember, 2021
After fees and expenses, the Portfolio increased by 1.83% during the month, outperforming its benchmark by 42 bps. Positive contributors for December included Mincor Resources, Monash IVF and Novonix (not held). Mincor was stronger after moving nearer a production restart. First development ore has been intersected earlier than planned and we remain positive on the long-term price outlook and the potential for industry consolidation in the WA nickel sector. Monash IVF rose on the back of a bid for listed peer Virtus from private equity firm BGH Capital. The implied valuation and corporate interest in the sector are supportive of our MVF position. Novonix (not held) rose as Electric Vehicle exposed stocks continued to perform strongly through December.
Negative contributors included Urbanise, Jayride and Janison Education. Urbanise was weaker following the surprise announcement of a change in CEO. The change reflected the board’s disappointment with the rate of revenue growth following increased investment in sales and marketing, implementation and product development. Jayride was weaker following uncertainty around the omicron variant and the potential impact on global travel. Janison Education was weaker following a recent period of strong outperformance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/182696223-1.pdfNovember, 2021
Positive contributors in November included Janison Education, Supply Network and Praemium. Janison Education was higher following a positive broker initiation. The company also announced the acquisition of Academic Assessment Services, a leader in educational tests and testing services to over 200 of the top 1,200 Australian independent schools. While the stock has performed well, we believe significant market opportunity exists as assessments across education bodies, governments and corporations seek scalable, secure digital solutions
We expect the Australian economy to continue to rebound in the short-term, following a better-than-expected contraction in 1Q21 amid COVID-related lockdowns in Melbourne and Sydney.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/181853386.pdfNovember, 2021
After fees and expenses, the Portfolio rose by 4.48% during the month, outperforming its benchmark by 356 bps. The largest positive contributors were Intega, Class and Envirosuite. Intega has entered into a scheme implementation deed with Kiwa, a Netherlands based quality assurance business. The offer, priced at $0.90, represents a 58% premium to the pre-bid price and has been supported by major shareholder Crescent Capital. Class also saw an approach from listed peer Hub24, with the scrip and cashbased offer priced at a significant implied premium. Envirosuite delivered a solid quarterly update, with new sales of over $4m in the quarter and Annualized Recurring Revenue (ARR) increasing 42%
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/181199679.pdfSeptember, 2021
After fees and expenses, the Portfolio decreased by 0.48% during the month, outperforming its benchmark by 166 bps. The largest contributors were XRF Scientific, Janison Education and PTB Group. XRF provides capital equipment and consumables to laboratories used in the preparation of samples. Strength in the mining industry is leading to strong demand, and the acquisition of 50% of Orbis Mining provides opportunity to cross sell to the existing client base in addition to opening up new market opportunities. Janison Education also continued to perform well post the release of their annual results. The continued shift toward digitization of assessments and the likely increased testing requirements as students return from lockdown provide a supportive backdrop. PTB group, which provides maintenance to turbo prop aircraft engines, has used the pandemic to acquire a foothold in the US market. With an increased market presence and a likely beneficiary of re-opening economies and borders, PTB remains well placed for solid medium-term growth.
After completing 1H2021 with strong momentum, renewed Covid-related lockdowns in Melbourne and Sydney will see the Australian economy contract in 3Q21, albeit it has been notable how well both business surveys and employment indicators have held up in Q3, suggesting a modest contraction than might have been expected several months ago.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/179975980.pdfJuly, 2021
Australian shares rose modestly in July despite ongoing lockdowns across the east coast of the country.
The S&P/ASX Small Ordinaries Accumulation Index returned 0.7% for the month, taking its 12-month return to 32.3%. However, the market lagged overseas indices, with the S&P500 returning 2.4% during the month amid an upbeat US corporate earnings season.
Metals & Mining ex-Gold (+10.2%) was the top contributor to the index, supported in most part by miners leveraged to the electric vehicle theme, including Pilbara Minerals (PLS, +22.1%), Orocobre (ORE, +27.5%) and Galaxy Resources (GXY, +27.0%).
Corporate activity increased across the broader market during the period. Within the Small Ords, Australian Pharmaceutical Industries (API, +26.5%) received a takeover bid from Wesfarmers (WES) at $1.38 per share (all-cash), a 21% premium to its last-traded share price prior to the announcement.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/176026690.pdfJune, 2021
After fees and expenses, the Portfolio increased by 3.07% during the month, underperforming its benchmark by 1 bp. The largest contributors were RPM Global, Praemium and Intega. RPM Global provided a positive update on software sales for the Financial year with momentum building in what we believe is a very large market opportunity. The company also announced the purchase of ESG services provider Nitro Solutions. The creation of a focused ESG division within RPM combined with their software capability makes strategic sense as the global mining industry evolves. Praemium continued to rally with market speculation around possible corporate appeal following the announced strategic review of the international business and departure of the CEO.
Intega also announced a strategic review with the board aiming to maximize shareholder value including exploring ownership options. M&A in the Microcap sector continues to increase and we believe this will be an ongoing theme through the 2H of 2021.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/174806788.pdfMay, 2021
The recovery in the Australian economy continues to exceed consensus expectations. The Australian economy contracted 2.5% in calendar 2020, however strong sequential growth in 2H2020 and positive momentum in early 2021 will see economic activity in 1Q2021 exceed pre-COVID levels.
The strength of the economic recovery is particularly evident via record levels for business conditions, business confidence and the strength in employment growth. The level of employment already exceeds pre-COVID levels, and after peaking at 7.5% in July 2020 the unemployment rate has declined sharply to 5.6% in March 2021.
Although wage rates remain subdued, the recovery in labour market income has been sufficient to offset the gradual withdrawal of temporary fiscal support.
Moreover, the accumulation of $125bn in excess household saving, in concert with strong asset price gains, leaves the consumer uniquely positioned to underpin economic growth in 2021- 2022. Dwelling investment is set to provide solid support for economic growth over the next 18 months following a surge in demand for new housing construction, partly in response to the Government’s Homebuilder subsidy. We expect the global economy to expand 6.5% and the Australian economy to expand 6% in 2021.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/173295743.pdfApril, 2021
After fees and expenses, the Portfolio increased by 8.86% during the month, outperforming its benchmark by +388 bps. The largest positive contributors for the Month of April included Mainstream, Pentanet and ERoad.
Following an initial bid in March for Mainstream from Vistra priced at $1.13, April saw US-based SS&C Technologies launch an offer at $2.00 per share. Further interest in the business saw Apex Group enter the fray, with the current bid now at $2.60 and both Apex and SS&C continuing to battle for control. Pentanet, an emerging Perth Internet Service Provider, was successful in securing a 15-year license for high band 5G spectrum covering Greater Perth. This will allow the company to accelerate the deployment of their network. A quarterly update was also provided during the month, with net new subscribers increasing 21% (q/q) and a strong initial uptake on the GeForce NOW offering, a premier cloud based streaming service. ERoad was higher following the signing of a new Australian enterprise customer and a pleasing 3Q update.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/172013733.pdfNovember, 2020
After fees and expenses, the portfolio increased by 6.86% over the month, underperforming its benchmark by 341bps. Positive contributors were Envirosuite, EML Payments and Monash IVF. Envirosuite provided a positive AGM update, with its pipeline continuing to grow and continued customer conversion across all key segments.
EML Payments was higher as COVID vaccine news provided confidence in the outlook for malls and the gift card segment. Monash IVF provided a positive AGM update highlighting strong growth and an improved market share. Negative contributors were Supply Network, Codan and NEXTDC. Despite a strong AGM update, Supply Network underperformed following recent strong outperformance. Q1 revenues have increased 12% (y/y) and the company has pulled forward its FY22 revenue target to FY21.
Codan was sold down on its perceived leverage to the gold price (which sold off). While NEXTDC was lower on rotation from growth to value during the month, the long term demand driver of digitization remains very much in place.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/162518989.pdfticker: UBS0057AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://www.ubs.com/content/dam/static/asset_management/australia/factsheets/ubs_microcap.pdf
asset_class: Domestic Equity
asset_category: Australian Small Cap
peer_benchmark: Domestic Equity - Small Cap Index
broad_market_index: ASX Index Small Ordinaries Index
structure: Managed Fund
manager_contact_details: Array
fund_features:
UBS Microcap Fund aims to provide investors with capital growth over the long term from a portfolio of micro company shares that we believe are being undervalued by the market, based on our assessment of the companies’ future cash flows.
- The Fund is actively managed and invests primarily in a portfolio of 35-65 stocks with a market capitalization of generally less than $250m.
- Eligible investments of the Fund comprise listed Australian and New Zealand securities, unlisted investments with the intention to float within six months.
- The Fund may invest in financial derivatives to gain exposure to the Australian and New Zealand sharemarket or to manage investment risk.