Single Sector Fund

Funds Master Product

About the fund

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Risk Indicator (volatility)

Target Asset Allocation

Equities 30.00%
Bonds 62.50%
Cash 7.50%

Commentary

As of 30 September 2021

Market Highlights

  • Most global equity markets pushed higher over May although tech heavy indices struggled due in part to a continued semiconductor shortage.
  • The United States S&P 500 index rose 0.6%, the Japanese Nikkei 225 index fell 0.2%, the UK FTSE 100 index increased 0.8%, the Australian ASX 200 index added 2.3% and the MSCI All Countries World Index ended the month up 1.1% all in local currency
  • The S&P/NZX 50 index fell 3.2% over the month

The fund ended the month modestly down  and recovered to post a return of 1.3% calendar year-to-date. The largest positive contributors to return were positions in Aristocrat Leisure (ALL), Infratil (IFT) and EBOS Group (EBO), that rose 9.5%, 6.9% and 11.6% respectively for the month. Other portfolio companies Contact Energy (CEN), Ingenia Communities Group (INA) and Z Energy (ZEL) performed well. While IFT and ALL rallied on their latest earnings updates and comments, EBO rallied on positive structural changes to the pharmaceutical distribution agreements in Australia (and their latest acquisition news).

The largest negative contributor was our position in Fisher & Paykel Healthcare’s (FPH) as their result modestly disappointed due to unexpected provisioning and a lack of any guidance for FY22. FPH detracted from value given an average weight of ~11% and a 17% fall. The 19.5% fall in ATM was largely mitigated by our small residual weight at the time of their most recent disappointing earnings update (~3%). We have subsequently exited the position entirely.

Key portfolio changes during the month were adding to positions in CEN, Sydney Airport (SYD) and FPH and well as introducing a new position in Westpac Bank.

 

Performance

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