September, 2023
As at 30 September 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.2% p.a.2 (after fees) and a yield of 9.8% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 10.5% p.a.2 and a yield of 5.7% p.a.2 The Fund delivered a cash distribution of 2.23cpu with 0.96cpu of franking credits attached at the end of September, bringing the 12mth gross income to 8.7%.
The Australian market fell 2.6% (including franking credits) in September as 10yr bond yield rose from 4.03% to 4.49%, impacting equity valuations. This rise in bond yields occurred due to a mix of higher oil prices and the perceived need for Central Banks to keep interest rates higher for longer to contain inflation. The best performing sectors were Energy (+2.2%) and Financials (-1.6%), which are sectors that tend to hold up better in a higher inflation, higher interest rate environment. In contrast, sectors that are more exposed to a rise in bond yields such as Property (-8.5%), Technology (-7.7%) and Healthcare (-6.4%) underperformed.
The largest positive contributors to the Fund’s performance during the month were overweight positions in BHP, QBE Insurance and New Hope as well as underweight positions in Xero and James Hardie. However, an overweight position in CSL as well as underweight positions in Fortescue, Rio Tinto, Paladin and Treasury Wines detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-15.pdfAugust, 2023
As at 31 August 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.5% p.a.2 (after fees) and a yield of 9.6% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 10.8% p.a.2 and a yield of 5.6% p.a.2
The Australian market fell 0.5% in August after the fall in sentiment towards Chinese economic growth provided a headwind for Australian mining stocks. The best performing sector of Australia’s August reporting season was consumer discretionary (+5.8%) whose results were generally more resilient than the low expectations that were built into stock prices. Real Estate (1.6%) also outperformed after a strong result from Goodman Group in which it reported that the strong demand for data centres would be a focus for its developments going forward. In contrast, the normally defensive Utilities (- 3.8%) and Consumer Staples (-3.1%) underperformed after generally posting disappointing results in part due to higher interest costs.
The largest positive contributors to the Fund’s performance during the month were overweight positions in Wesfarmers and Carsales which both had strong results as well as underweight positions in Transurban, Wisetech and South32.
However, overweight positions in Telstra, QBE Insurance, Suncorp and Graincorp as well as an underweight position in James Hardie detracted from relative performance. The Fund remains actively positioned to seek superior income than the benchmark.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-14.pdfJuly, 2023
As at 31 July 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.6% p.a.2 (after fees) and a yield of 9.7% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 10.9% p.a.2 and a yield of 5.6% p.a.2
The Australian market rose 2.9% in July after lower than expected inflation prints in the U.S. and Australia reduced the risk of further rate hikes. The cyclical sectors of Energy (+8.4%) and Banks (+6.5%) outperformed on increased hopes of a soft landing or even a “no landing” where inflation can return to central bank targets without requiring a recession. In contrast, Healthcare (-1.5%) continued its underperformance as Ansell issued disappointing guidance and Consumer Staples (-1.0%) also lagged.
The largest positive contributors to the Fund’s performance during the month was overweight positions in Suncorp, Computershare and Ampol as well as underweight positions in Allkem and Endeavour. However, overweight positions in Telstra, Woolworths, CSL and Independence Group as well as an underweight position in Evolution Mining detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-13.pdfJune, 2023
As at 30 June 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.4% p.a.2 (after fees) and a yield of 9.8% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 10.8% p.a.2 and a yield of 5.7% p.a.2 The Fund delivered a cash distribution of 1.51cpu with 0.69cpu of franking credits attached at the end of June, bringing the 12mth gross income to 8.9%.
The Australian market rose 1.8% in June, even after a surprise hike from the RBA and an increase in hawkish rhetoric resulting in an increase of 42bps in the 10yr bond yield to above 4%. Economic data announced during the month was strong with 76k jobs created and the unemployment rate dropping to 3.6%.
Official retail sales also rose by a strong 0.7% in May despite a number of consumer discretionary companies announcing profit warnings during the month. This is a sector where investors need to be careful in the current market environment. Materials (+4.8%) stocks outperformed as once again Chinese officials hinted at more stimulus. Technology (+3.5%) also performed well following the lead of A.I. themed US Technology stocks despite the rally in bond yields. In contrast, Healthcare (-6.6%) underperformed after CSL reset analyst expectations lower for their growth prospects in FY24.
The largest positive contributors to the Fund’s performance during the month was overweight positions in Whitehaven Coal, QBE Insurance, Macquarie and Collins Food as well as an underweight position in ASX. However, overweight positions in CSL and Telstra as well as underweight positions in Xero, AGL Energy and Wisetech detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-12.pdfMay, 2023
As at 31 May 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.3% p.a.2 (after fees) and a yield of 9.7% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 10.7% p.a.2 and a yield of 5.7% p.a.2
The Australian market fell 2.5% in May, as signs emerged of a slowdown in consumer spending from stocks such as Wesfarmers. As a result, the Consumer Discretionary (-6.2%) and Consumer Staples (-4.5%) sectors underperformed along with Materials (-4.4%) after a 9.4% fall in the iron ore price. In contrast, Technology (+10.4%) outperformed after strong earnings forecasts from U.S. stock Nvidia, which is benefiting from the increased popularity of artificial intelligence. After pausing in April, the RBA surprised the market by returning to its hiking cycle in May, resulting in a 27bp increase in the Australian 10yr bond yield.
The largest positive contributors to the Fund’s performance during the month was an overweight position in Graincorp as well as underweight positions in Fortescue, Wesfarmers, Treasury Wines and IDP Education. However, an overweight position in Whitehaven Coal as well as underweight positions in Xero, Allkem, James Hardie and Wisetech detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark. After a very strong annual yield in FY22, we expect the gross income produced by the Fund in FY23 to return to a more normal level of 9%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-11.pdfApril, 2023
As at 30 April 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.7% p.a.2 and a yield of 9.7% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.0% p.a.2 and a yield of 5.7% p.a.2
The Australian market rose 1.9% in April, led by the strong returns in property stocks Mirvac (+16%) and Stockland (+12%) which were likely supported by the second straight monthly rise in Australian house prices. Technology and Industrials sectors also performed well in contrast to Materials, which was the only sector to have a negative return during the month. Iron ore fell 8.5% during April after concerns over Chinese growth prospects increased, putting pressure on iron ore producers. After 10 interest rate hikes in a row, the RBA paused in April but then surprised the market by returning to its hiking cycle in May.
Headline inflation looks to have peaked but services inflation, particularly rent, education and health remained stubbornly high in the Q1 inflation report. The recent increase in interest rates has not reduced the appetite for takeovers with Japanese firm, Kirin, launching a takeover bid for Blackmores at $95 per share.
The largest positive contributors to the Fund’s performance during the month were overweight positions in Macquarie, QBE Insurance, Telstra and CSL as well as an underweight position in Fortescue. However, overweight positions in Rio Tinto and Mineral Resources as well as underweight positions in Mirvac, Stockland and Telix Pharmaceuticals detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark. After a very strong annual yield in FY22, we expect the gross income produced by the Fund in FY23 to return to a more normal level of 9%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-10.pdfMarch, 2023
As at 31 March 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.7% p.a.2 (after fees) and a yield of 9.8% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 10.9% p.a.2 and a yield of 5.7% p.a.2
The Australian market was largely flat in March, lagging global markets which rose despite the failure of multiple U.S. banks and the hastily arranged takeover of Credit Suisse by UBS. This mini-crisis, which caused the market to fall intramonth, was partially caused by the reduction in bond prices which caused the balance sheets of some banks to weaken, leading to a bank run in the case of Silicon Valley Bank. In order to stop contagion, the U.S. Federal Reserve set up a facility during the month to provide liquidity to banks and confidence to depositors, particularly in small regional banks. This facility, as well as the reduction in bond yields led to a rally late in the month, leaving the S&P/ASX 200 index (including franking credits) up 0.2% in March. Materials and Communication Services were the best performing sectors in contrast to Real Estate and Financials which underperformed.
The largest positive contributors to the Fund’s performance during the month were overweight positions in BHP, Northern Star and Telstra as well as an underweight position in Lynas. However, overweight positions in Charter Hall and Computershare as well as underweight positions in Liontown, Newcrest and Xero detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark. After a very strong annual yield in FY22, we expect the gross income produced by the Fund in FY23 to return to a more normal level of 9%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-9.pdfFebruary, 2023
As at 28 February 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.8% p.a.2 (after fees) and a yield of 9.7% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.0% p.a. and a yield of 5.6% p.a.
The Australian market fell 2.3% in February, in line with the global markets as bond yields rose strong in response to strong economic data and sentiment regarding the Chinese recovery which fell along with a strong U.S. dollar that put pressure on resource names. Utilities and Technology were the best performing sectors in contrast to Financials and Materials which underperformed. Within financials, insurers outperformed but banks fell after Commonwealth Bank reported its half-yearly result. While it was strong at the aggregate level, CBA reported that Net Interest Margins peaked in October as mortgage competition heated up, implying that banks were no longer seeing additional margin benefits from interest rate rises.
The largest positive contributors to the Fund’s performance during the month were overweight positions in QBE Insurance, Telstra and Medibank as well as underweight positions in Rio Tinto and Dominoes. However, overweight positions in BHP, Northern Star and Whitehaven Coal as well as underweight positions in Transurban and Cochlear detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark. After a very strong annual yield in FY22, we expect the gross income produced by the Fund in FY23 to return to a more normal level of 9%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-8.pdfJanuary, 2023
As at 31 January 2023, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.1% p.a.2 (after fees) and a yield of 9.8% p.a.2 (incl.
franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.3% p.a.2 and a yield of 5.6% p.a.2 The Australian market rallied over 6% in January, in line with the U.S. market as investors priced in an increased chance of a soft landing in the United States as inflation slowed and bond yields fell. China’s reopening continued at a rapid pace with Chinese health authorities reporting that 80% of the Chinese population has already caught Covid, adding to optimism for the global economy, in spite of the human toll as reports emerged of long queues at funeral homes. Consumer Discretionary and Materials were the best performing sectors in contrast to Utilities and Energy which underperformed as power/energy prices fell and the Australian government announced measures to direct coal and gas to the domestic market with the aim of further reducing prices.
The largest positive contributors to the Fund’s performance during the month were overweight positions in Northern Star, BHP and Charter Hall as well as underweight positions in Brambles and APA Group. However, overweight positions in Whitehaven Coal, Computershare, Woodside and Telstra as well as an underweight position in Pilbara Minerals detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark. After a very strong annual yield in FY22, we expect the gross income produced by the Fund in FY23 to return to a more normal level of 9%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-7.pdfDecember, 2022
As at 31 December 2022, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.7% p.a.2 and a yield of 9.8% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 10.8% p.a.2 and a yield of 5.6% p.a.2
The Australian market fell 3.2% in December, outperforming global markets due to the ASX’s higher exposure to banks and resources (which fared well as the reopening of the Chinese economy continued). The RBA increased the cash target rate by another 25bps to 3.10% and the Aussie 10 year bond yield rose 52bps to 4.05% as central banks re-affirmed their hawkish commentary despite evidence emerging that we may have reached peak inflation. Materials and Utilities were the best performing sectors in contrast to Consumer Discretionary and Information Technology which underperformed as bond yields rose. Over 2022, the ASX200 rose 0.5% (including franking credits) as Energy, Utilities, Materials and Financials outperformed. These sectors are all relative beneficiaries of a higher inflation, higher interest rate environment, which was the dominant theme of 2022. In contrast, the rate sensitive Information Technology, Consumer Discretionary and Real Estate sectors underperformed. Australia’s market substantially outperformed global markets primarily due to our higher exposure to Financials and Resources vs Technology stocks.
The largest positive contributors to the Fund’s performance during the month were overweight positions in QBE Insurance and BHP as well as underweight positions in Pilbara, Allkem and Liontown Resources. However, overweight positions in Charter Hall, Woodside Energy and Mineral Resources as well as underweight positions in Rio Tinto and Fortescue detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark. After a very strong annual yield in FY22, we expect the gross income produced by the Fund in FY23 to return to a more normal level of 9%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-6.pdfNovember, 2022
As at 30 November 2022. the Plato Australian Shares Income Fund ('Fund') delivered a total return of 12.1% p.a.' and a yield of 9.7% p.a.' (incl. franking) since inception (9 September 2011) after fees compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) ('Benchmark') return of 11.2% p.a.' and a yield of 5.6% p.a.'
The Australian market continued to rally in November. rising 6.8% (including franking credits), along with global markets as optimism rose of a re-opening of the Chinese economy along with Chinese government stimulus. The RBA increased the cash target rate by another 25bps to 2.85% but the Aussie 10 year bond yield fell 23bps to 3.53% as market expectations rose that we have reached peak inflation and a dovish pivot from central banks is becoming more likely. Utilities were the best performing sector after a takeover offer for Origin Energy. closely following by mining stocks which benefited from the China re-opening optimism. All sectors had positive returns in November but the weakest of these was Communication Services. Financials and Energy.
The largest positive contributors to the Fund's performance during the month were overweight positions in BHP and Northern Star as well as underweight positions in Santos. Pilbara Minerals and Xero. However, overweight positions in Elders. Aristocrat Leisure and Woodside Petroleum as well as underweight positions in Fortescue and Rio Tinto detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark. After a very strong annual yield in FY22. we expect the gross income produced by the Fund in FY23 to return to a more nnrmnl level of 9%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-1-1.pdfOctober, 2022
As at 31 October 2022. the Plato Australian Shares Income Fund 'Tune) delivered a total return of 11.5% p.a.' and a yield of 9.8% p.a.' (incl. franking) since inception' of ter fees compared to the S&P/ASX 200 Franking Credit Adjusted Doily Total Return Index ITax•Exempt I ['Benchmark', return of 10.6% p.a.: and a yield of 5.7%.
The Australian market rose 6.1% (including franking credits) in October. along with global markets. ravening the falls in September. The RBA slowed down its pace of tightening. increasing the cosh target rate by 25bps to 2.60% and the Aussie 10 year bond yield fell laps to 3.76%. Banks were the best performing sector. as first Bonk of Queensland and then ANZ reported the extent to which the rise in interest rotes is helping net interest margins. Energy and Property also performed strongly. However. Consumer Staples underperformed after reporting soft 1Q23 soles and Mining also logged following the Chinese 2• annual party congress which failed to report any meaningful stimulus.
The largest positive contributors to the Funds performance during the month were overweight positions in Woodside Energy and Macquarie os well as underweight positions in Rio Tinto. Fortescue and ASX. However. overweight positions in BHP. Medibank. South32 and Telstro as well os on underweight position in Qantas detracted from relative performonce.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-5.pdfSeptember, 2022
As at 30 September 2022. the Plato Australian Shares Income Fund ?Fund') delivered a total after fee return of 11.0% p.a., and a yield of 9.9% p.a., (incl. franking) since Inception' compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax•Exempt) ('Benchmark') return of 10.1% p.a.' and a yield of 5.7% p.a.2
At the end of September. the Fund made a cosh distribution of 2.28c with 0.913c of franking credits attached. taking the annual gross yield to 14.4%. This large annual yield has been boosted by a number of off market buybacks as well as a large special dividend from BHP which came in the form of the Woodside shares with franking credits attached.
The Australian market fell 5.7% (including franking credits) in September. along with global markets driven by rapid tightening of interest rates and hawkish commentary coming out of the U.S. Federal Reserve as a result of persistent high inflation. The RBA cash target rate again rose 50bps from 1.85% to 2.35% and the Aussie 10 year bond yield rose 30bps to 3.90%. Materials and Energy were the best performing sectors in this rising inflation/interest rate environment but similar to August. rising bond yields impacted the rate sensitive Utilities. Real Estate and Technology sectors which underperformed. Small Caps also significantly underperformed Large Caps during September as investors sought safety In the current risk off sentiment.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-4.pdfAugust, 2022
As at 31 August 2022. the Plato Australian Shares Income Fund ('Fund'I delivered a total return of 114% p.a; and a yield of 9.7% (incl franking) since inceptions compared to the SAP/ASX 200 Franking Credit Adjusted Doily Total Return Index ITax-Exempt) ('Benchmark') return of 10.8% p.a.' and o yield of 5.6% p.a.'
The Australian market rose 1.4% (including franking credits) in August. outperforming global moMets driven by a strong nse in Resources. The R8A cosh target rote again rose 50bps from 1.35% to 1.85% and the Aussie 10 year bond yield rose 54bps to 3.60%os the market reversed last month's negative move in bond yields os the U.S. Fed signaled that they were unlikely to cut rotes next year which the market had been pricing, even if the economy weakened. They signaled this is their intention in order to make sure inflation didn't become on ongoing issue by being baked into people's expectations. a mistake mode in the 1970s. Energy was the best performing sector despite the oil price falling during the month. potentially as a result of the rise in bond yields favouring cheaper sectors. Rising bond yields impacted the rate sensitive Reel Estate and Utilities sectors which underperformed. The August reporting season delivered better than expected results for FY22 and strong dividends but there were downgrades to FY23 earnings expectations as higher rates Impact future profit forecasts.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-3.pdfJuly, 2022
As at 31 July 2022. the Plato Australian Shares Income Fund ('Fund') delivered o total return of 11.4% p.a.: and o yield of 9.8% psi' find. frankingl since inception' compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tox•Exempt I ('Benchmark') return of 10.7% p.a.' and a yield of 5.6% p.o.'
The Australian market rose 5.8% (including franking credits) in July as global stocks rallied on lower bond yields. The RBA cosh target rote rose 50bps from 0.85% to 1.35% but in contrast the Aussie lOyear bond yields fell 60bps to 3.06% as the market began pricing a greater chance that the RBA would have to start cutting rates os early os 2023. Falling bond yields drove the outperformonce of the longer duration Information Technology sector as well os the rotes sensitive Property sector. In contrast. Materials. Energy and Utilities. which hod been the recent beneficiary of rising commodity prices. fell os concerns over the Chinese property market and economy grew.
The largest positive contributors to the Fund's performance during the month overweight positions in Whitehoven Cool. National Australia Bank and Chart& Hall as well as underweight positions in BHP and Transurbon. However. overweight positions in Woodside Energy. Telstra. QBE Insurance and Graincorp as well as on underweight position in WiseTech detracted from relative Performance.
The Fund remains actively positioned to seek superior income than the benchmark. After o very strong annual yield in FY22. we expect the gross income produced by the Fund in FY23 to return to a more normal level of 9%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income.jpgJune, 2022
As at 30 June 2022, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.0% p.a.2 and a yield of 9.8% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 10.2% p.a.2
At the end of June, the Fund made a cash distribution of 3.83c with 1.63c of franking credits attached, taking the annual gross yield to 15.5%. This large annual yield has been boosted by a number of off market buybacks as well as a large special dividend from BHP which came in the form of the Woodside shares with franking credits attached.
The Australian market fell 8.8% (including franking credits) in June, around 1% more than global equities which finished down 7.7% in local currency terms. The RBA cash target rate rose 50bps from 0.35% to 0.85% and Aussie 10year bond yields rose from 3.38% to 3.77%. Defensive sector Consumer Staples and the oil exposed Energy sector held up the best ending broadly flat at +0.2% and -0.2% respectively. Heavy losses were seen in Consumer Discretionary, Real Estate, IT, Financials and Materials all of which fell by more than 10% as rising inflation and interest rate hikes weighed heavily on interest rate sensitive securities and recessionary fears.
File:May, 2022
As at 31 May 2022, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.9% p.a. and a yield of 9.5% p.a. (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.3% p.a.2 and a yield of 5.6% p.a.
The Australian market fell 6.8% before recovering to end down 2.6% (including franking credits) in May, underperforming global equities which finished roughly flat. The RBA kicked off its interest rate hike cycle during the Australian election campaign, raising rates by 25bps which helped to fuel an increase in the Australian 10yr bond yield from 3.13% to 3.35%. Anthony Albanese was elected Australian Prime Minister however this is likely to have little impact on markets given the economic policies of each party were similar.
The underperforming sectors during the month were Property, particularly industrial property which fell after Amazon announced that it required less industrial space than previous forecast, and the technology sector, which continued to de-rate as bond yields continued their rally. In contrast, materials was the best performing sector as increased stimulus as well as easing Covid restrictions in China gave the market hope that Chinese demand for commodities would increase.
The largest positive contributors to the Fund’s performance during the month were overweight positions in South32, Amcor, Mineral Resources and BHP as well as an underweight position in Fortescue. However, overweight positions in Macquarie, CSR, Charter Hall, JB Hi-fi and Goodman Group underperformed detracting from relative performance.
File:April, 2022
As at 30 April 2022, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.3% p.a.2 and a yield of 9.6% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.6% p.a.2 and a yield of 5.6% p.a.2
The Australian market fell 0.9% (including franking credits) in April, strongly outperforming the U.S. market which fell 8.8%. A key driver of the fall was rising inflation leading to more hawkish central bank (including the RBA) commentary which pushed up the Australian 10yr bond yield from 2.84% to 3.13%. The technology sector, after performing strongly in March, resumed its underperformance as Block (formerly Afterpay) and Wisetech posted double-digit falls. Materials and Consumer Discretionary sectors also underperformed. In contrast, defensive stocks rose strongly as investors sought the safe havens of Utilities, Transport, Insurance, and Staples.
The largest positive contributors to the Fund’s performance during the month were overweight positions in Graincorp, Macquarie, and QBE Insurance as well as underweight positions in Block and Rio Tinto. However, overweight positions in Aristocrat Leisure, BHP and South32 underperformed and underweight positions in Transurban and Fortescue detracted from relative performance.
File:March, 2022
As at 31 March 2022, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.5% p.a.2 and a yield of 9.7% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.8% p.a.2 and a yield of 5.7% p.a.2 After a strong 1st quarter of income generation, the quarterly distribution at the end of March was 4.07cpu with 1.74cpu of franking credits attached which takes the annual income distributed by the Fund to 11.5%, 6.1% above the S&P/ASX 200 Index yield.
The Australian market rose 7.1% (including franking credits) in March, outperforming global markets given the Australian market has a higher exposure to banks and resources which rallied strongly during the month. Despite the large rise in the Australian 10yr bond yield (from 2.14% to 2.84%) Technology stocks were the best performer in March as investors bought companies such as Block and Wisetech that had fallen strongly in previous months, followed by Mining, Banks and Energy. There were large analyst earnings upgrades in the resource sector after strong rises in commodity prices. In contrast, Property, Healthcare and Consumer Discretionary underperformed the market during March.
File:February, 2022
As at 28 February, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.9% p.a. and a yield of 9.3% p.a. (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.2% p.a. and a yield of 5.6% p.a.
The Australian market rose 2.5% (including franking credits) in February, outperforming global markets which continued their equity correction driven by rising bond yields and Russia’s invasion of Ukraine late in the month. The reason for the outperformance of the Australian market was a higher exposure to banks and resources and our lower exposure to technology stocks which fell during the month. Gold stocks were the best performer in February as investors sought a safe-haven in the context of rising geopolitical tensions, followed by Energy and Consumer Staples. In contrast, Technology, Consumer Discretionary and Communication Services fell during February.
File:January, 2022
As at 31 January 2022, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 11.6% p.a.2 and a yield of 9.4% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.0% p.a.2 and a yield of 5.6% p.a.2
The Australian market fell 6.4% (including franking credits) in January in a global equity correction driven by a more hawkish US Fed driving up bond yields. The Australian 10yr bond yield rose 22.5bps during the month to 1.88%, and was a key driver of sector and style performance. The RBA also announced that it is ending its quantitative easing in February, albeit it does not foresee raising interest rates in the near future given inflation and wage growth is much lower in Australia compared to the U.S. Growth stocks were the most impacted by the move in bond yields as technology and healthcare stocks fell 18% and 12% respectively. In contrast, Energy, Utilities and Materials rose during January.
File:December, 2021
As at 31 December 2021, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.4% p.a.2 and a yield of 9.5% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.8% p.a.2 and a yield of 5.7% p.a.2 After a strong 4th quarter of income generation, the quarterly distribution at the end of December was 2.27cpu with 0.97cpu of franking credits attached which takes the annual income distributed by the Fund to 10.0%, 5.0% above the S&P/ASX 200 Index yield.
File:November, 2021
As at 30 November 2021, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.1% p.a.2 and a yield of 9.3% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.6% p.a.2 and a yield of 5.7% p.a.2
The Australian market fell 0.4% (including franking credits) in November, outperforming global markets which fell 1.6%. The market weakened over the last week as a new Covid variant, Omicron, emerged in Southern Africa. This variant has a large number of mutations and appears to be even more transmissible than the delta strain based upon its rate of spread within South Africa, however, scientists are unsure of its severity and how effective existing vaccines might be due to the high number of mutations. This added to fears of more lockdowns that had already started to re-emerge in mainland Europe as Covid cases were already on the rise resulting in a 38bp fall in the Australian 10yr bond yield. Materials was the best performing sector driven by increasing expectations of China easing conditions, causing a rally in iron ore stocks. Defensive sectors also performed well with gains for Telecoms, Consumer Staples, Real Estate and Utilities in contrast to Energy and Financials which fell on global growth concerns and the fall in bond yields.
File:October, 2021
As at 31 October 2021, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.3% p.a.2 and a yield of 9.4% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.7% p.a.2 and a yield of 5.7% p.a.2. After participating in the Commonwealth Bank and Woolworths off market buybacks, Plato is now aiming to generate an 2021 gross yield of around 10%.
The Australian market was flat in October, lagging global markets which rallied 5%. Australia’s 3yr and 10yr bond yields rose 89bps and 59bps respectively during the month as the market brought forward the timing of expected RBA rate hikes with an expectation that the RBA will end yield curve control. However, in the US, the 10yr bond yield rose just 2bps and this muted move was more influential on Australian Equities as Gold, Technology and Healthcare (sectors that generally fall when bond yields rise) rallied. In contrast, Industrials, Energy and Consumer Staples fell.
File:July, 2021
As at 31 July 2021, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.7% p.a.2 and a yield of 9.2% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.9% p.a.2 and a yield of 5.6% p.a.2
The Australian market continued its rally in July, rising 1.1% even as the Sydney Covid outbreak worsened and the lockdown was extended. The gains in July were led by the Resources and Industrials sectors with strong gains from the iron ore miners who are poised to deliver massive dividends in the August reporting season, as well as Sydney Airport which received a takeover offer. Technology and Energy stocks fell during the month
File:June, 2021
9.3% p.a. yield² since inception Plato is aiming to generate an 2021 gross yield² of around 8.0% 0.7% outperformance vs benchmark since inception
As at 30 June 2021, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.6% p.a.2 and a yield of 9.3% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.9% p.a.2 and a yield of 5.7% p.a
File:May, 2021
As at 31 May 2021, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.5% p.a.2 and a yield of 9.3% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.8% p.a.2 and a yield of 5.6% p.a.2
The Australian market continued its rally in May, rising 2.5% including franking credits. These gains were led by the major banks which all provided positive trading updates during the month, with lower impairments leading to earnings and dividend upgrades. May saw the 9th consecutive month of earnings upgrades across the market which is the longest streak in over two decades. Consumer Discretionary and Healthcare stocks also rose during the month in contrast to Technology and Utility stocks which fell as the market appeared to position for higher inflation during the month.
The Australian Federal Budget on May 11th was materially positive for equities, as the announcement of $96 billion in stimulus over 5 years was significantly more than expected. The iron ore price also continued its rally to above US$200 a tonne, further supporting the major iron ore miners who are on schedule to deliver substantial dividends in the upcoming reporting season.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-2.pdfApril, 2021
As at 30 April 2021, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.3% p.a. 2 and a yield of 9.4% p.a.
2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (TaxExempt) (‘Benchmark’) return of 11.6% p.a. 2 and a yield of 5.7% p.a. 2
The Australian market continued its rally in April, rising 3.7% including franking credits. Bond yields continued to retrace from February highs, falling 10bps during the month. This aided stocks with a longer duration such as Technology and Growth stocks which outperformed. Materials also outperformed as metals prices rose strongly during the month. In contrast, Energy stocks lagged as the oil price fell 5% and Consumer Staples also underperformed lead by A2 Milk whose sales growth rate is weakening.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report-1.pdfMarch, 2021
As at 31 March 2021, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.1% p.a. 2 and a yield of 9.5% p.a. 2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (TaxExempt) (‘Benchmark’) return of 11.3% p.a. 2 and a yield of 5.7% p.a. 2 After a strong 1st quarter of income generation, the quarterly distribution at the end of March was 2.58cpu with 1.11cpu of franking credits attached which takes the annual income distributed by the Fund to 8.1%, 4.5% above the S&P/ASX 200 Index yield.
The Australian market continued its Covid-19 recovery rally in March, rising 2.7% including franking credits. After the spike in February, domestic bond yields fell modestly in March, supporting returns for Utilities, Consumer Discretionary and Communications stocks.
In contrast, Materials and Energy stocks lagged, giving back some of their strong performance in February. Information Technology also lagged as the market rotated from growth to value, dragged down by Afterpay Touch which fell 15% during the month. A number of M&As were also announced during the month, displaying ongoing confidence in the global economic recovery despite further lockdowns in Europe.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Prior-Monthly-Report.pdfDecember, 2020
As at 31 December 2020, the Plato Australian Shares Income Fund (‘Fund’) delivered a total return of 12.0% p.a.2 and a yield of 9.4% p.a.2 (incl. franking) since inception1 compared to the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt) (‘Benchmark’) return of 11.1% p.a.2 and a yield of 5.7% p.a.2 During 2020, in a year of so much turmoil where a lot of high dividend stocks have underperformed, it is pleasing that the Fund has been able to deliver a positive 3.6% total return (including franking credits) and outperform its benchmark by 1.2% for our investors.
The Australian market continued its march higher in December, rising just over 1%, with the accumulation index finishing the year higher than it started despite the Covid 19 pandemic. Global markets continued to rally despite increased Covid infections in the U.S., U.K. and Europe resulting in additional lockdowns. Of particular concern was a new, more infectious strain of Covid emerging in the U.K. which resulted in a number of countries restricting travel from the U.K. Australia also had its own mini-outbreak late in the month emanating from the Northern Beaches of Sydney which soon resulted in a lockdown for that community, interstate border closures and increased social distancing measures for the rest of greater Sydney. The iron ore price defied market expectations, rising 20% as Brazilian Iron Ore producer Vale suffered another dam issue and China’s economy continued to boom, consuming ever greater amounts of iron ore. The top performing sectors were Information Technology and Resources in contrast to the defensive sectors of Utilities and Healthcare which fell during the month.
The November rally of the stocks most impacted by Covid-19 did not continue as increased restrictions were instituted in Australia and around the world. The largest positive contributors to the Fund’s performance during the month were overweight positions in Fortescue, Metcash and Mineral Resources as well as underweight positions in Cochlear and A2 Milk. However, overweight positions in Aurizon and Service Stream underperformed and underweight positions in Afterpay Touch and Xero detracted from relative performance.
The Fund remains actively positioned to seek superior income than the benchmark. Our proprietary dividend cut model indicates that the proportion of stocks forecast to cut dividends has returned to a normal level after being elevated from March-October this year. Hence, we continue to forecast that dividends are likely to increase in 2021 from their level in the 2nd half of 2020.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Plato-Australian-Shares-Income-Fund-Monthly-Report.pdfticker: WHT0039AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://plato.com.au/australian-strategies/australian-shares-income-fund-class-a/#update-report
Bottom left ->UPDATES AND REPORTS -> FULL REPORT
asset_class: Domestic Equity
asset_category: Australia Large Blend - Income Dividend Focused
peer_benchmark: Domestic Equity - Large Cap Dividend Index
broad_market_index: ASX Index 200 Index
structure: Managed Fund
manager_contact_details: Array
fund_features: