Category: Funds

A fund refers to capital belonging to numerous investors used to collectively purchase securities while each investor retains ownership and control of his own shares. An investment fund provides a broader selection of investment opportunities, greater management expertise, and lower investment fees than investors might be able to obtain on their own. Types of investment funds include mutual funds, exchange-traded funds, money market funds, and hedge funds.

Funds Funds

Allspring Diversified Income Builder Fund – Class C: A fund providing high income

Post author By lvc-admin
Post date December 10, 2021
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Fund Objective

The investment seeks long-term total return, consisting of current income and capital appreciation.

Approach

The strategy targets a yield of 4%-5% and allocates 60%-90% of assets in fixed income, with the remainder in stocks. The team may also employ tactical shifts, vetted by the firm’s tactical trading council, by trading currencies or equity sector indexes, but these can be difficult to execute well consistently. Since introducing a multisleeved approach in early 2018, this strategy has undergone three prospectus benchmark shifts that signal it continues to experiment with its profile. The most recent adjustment (February 2020) decreased the equity exposure by 10 percentage points to 25% in order to make room for a more diversified bond sleeve. Other adjustments include the removal of a REITs sleeve in September 2018, the addition of a securitized bond sleeve in March 2019, and the introduction of an options sleeve in January 2020.

Portfolio

As fixed-income markets have proved richly priced, the portfolio managers cited more attractive capital appreciation and dividends in the equity space, prompting an uptick in the equity holdings to roughly 38% here by September 2021. Within that equity sleeve, technology stocks (Microsoft MSFT is a holding) and healthcare stocks (such as Bausch Health Companies BHC, DaVita DVA, and AbbeVie ABBV) occupied roughly 27% and 17% of assets, respectively.

High-yield bonds dominate the fixed-income portion of the strategy (59% of the portfolio as of September 2021), and it is worth noting that these are more sensitive to equity markets than the investment-grade fare employed by many peers for downside protection in stressed markets. Other bond sleeves here are modest but diversifying relative to the portfolio’s historical profile and include municipal bonds (3%) and securitized bonds (2%).

People

Kandarp Acharya as co manager alongside Margie Patel, who was the sole manager since 2007 but is departing this strategy (though she remains on Allspring Diversified Capital Builder EKBYX) as of Dec. 13, 2021. This move is accompanied by the arrival of quantitative researcher Petros Bocray, a 15-year firm veteran and Acharya’s collaborator on Allspring Asset Allocation EAAIX.

Performance

Over the strategy’s short tenure with its new contours (January 2018 through November 2021), the 5.5% annualized return of its R6 share class modestly outpaced the 5.3% return of the Morningstar Conservative. Target Risk Index and trailed the 6.7% return of its custom benchmark (60% ICE BoA U.S. Cash Pay HY Index, 25% MSCI ACWI, and 15% Barclays Aggregate Index). From an absolute return perspective, the strategy also generated a higher return than the 5.0% median of its typical allocation–15% to 30% equity Morningstar Category peer.This strategy has a riskier profile than many strategies in the category, particularly during stress periods, resulting in risk-adjusted returns (as measured by the Sharpe ratio) that trail all comparative points (typical category peer and benchmark as well as custom benchmark) over the aforementioned period. In three recent stress periods (when energy prices plummeted from June 2015 to February 2016, the 2018 fourth-quarter high-yield sell-off, and the coronavirus-driven market panic of Feb. 20-March 23, 2020), the fund lagged its category index by more than double and trailed its typical peer.

Top 10 Holdings

C:\Users\Akhila\Downloads\Screenshot 2021-12-10 121827.png

About the fund

The Fund seeks high current income from investments in income-producing securities. The Fund will normally invest at least 80% of its assets in income producing securities, including debt securities of any quality, dividend paying common and preferred stocks, convertible bonds, and

derivatives. The strategy targets a yield of 4%-5% and allocates 60%-90% of assets in fixed income, with the remainder in stocks. The team may also employ tactical shifts, vetted by the firm’s tactical trading council, by trading currencies or equity sector indexes, but these can be difficult to execute well consistently.

(Source:Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags Recommendations, US Market

Funds Funds Research

Vanguard Total International Stock Index Fund Investor Share: A fund providing outstanding diversification with ultralow fee

Investment Objective

The Fund seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in developed and emerging markets, excluding the United States.

Approach

Vanguard’s portfolio managers use full replication to track the FTSE Global All Cap ex U.S. Index. This benchmark starts with all stocks listed outside of the United States and sorts them by their free-float adjusted market cap. It targets firms that land in the top 98% of each country’s market capitalization. The index uses buffer rules around the cutoff point to keep turnover low, and it applies some additional liquidity requirements to ensure that its holdings are investable. The index weights its final constituents by market cap, which helps further mitigate turnover and trading costs. It reconstitutes semiannually in March and September.

Portfolio

This fund captures the entire foreign stock market. Its comprehensive portfolio effectively diversifies stockspecific risk, with only 9% of assets in its 10 largest holdings. . Sector weightings are comparable, with financial and industrial stocks collectively representing almost one third of the portfolio. Eurozone stocks represent the largest regional allocation, at 20% of the portfolio, while Japan and the United Kingdom make up an additional 16% and 9.4%, respectively. The fund does not hedge its currency risk, so its exposure to currencies like the euro, yen, and pound can add to its volatility. Stocks listed on emerging-markets exchanges account for a little more than 28% of this fund. Allocating to these companies improves the fund’s reach and shouldn’t materially impact its risk or performance. The fund includes small caps but weights its holdings by market cap. So, it leans toward large-cap multinationals, with companies like Taiwan Semiconductor, Nestle, and Samsung among its biggest names.

People

The portfolio managers on this fund are part of Vanguard’s Equity Index Group. Christine Franquin and Michael Perre share responsibility for this fund. They are both principals at Vanguard and captain some of Vanguard’s largest index-tracking funds listed in North America. This duo not only oversees the portfolio but also executes trades on a day-to-day basis

Performance

This fund’s category-relative performance has not stood out from its competitors in the foreign large-blend category. The Admiral share class managed to slightly edge out the average of its peers by 18 basis points annualized over the 10 years through November 2021. The fund’s larger-than-average stake in emerging- markets stocks was a drag during the first few years of that period and partially explains its mediocre showing. The fund’s composition looks a lot like the category average, and it remains fully invested in order to tightly track its target index. That means it tends to post average performance during volatile periods like the coronavirusdriven sell-off in the first quarter of 2020. The fund’s 24% decline was comparable to the loss incurred by the category norm over those three months.

Recent category-relative performance has been stronger. The portfolio led the category average by 67 basis points per year over the trailing three years through November 2021, landing just outside the top third of the category. Poor stock selection in the financials and information technology sectors on the part of some active managers hurt their category-relative performance and boosted the fund’s standing.

Top holdings of the fund

C:\Users\Akhila\Downloads\vanguard portfolio.png

About the fund

The fund tracks the FTSE Global All Cap ex U.S. Index, which includes stocks of all sizes from foreign developed and emerging markets. It weights them by market cap, an approach that benefits investors by capturing the market’s collective opinion of each stock’s value while keeping turnover low. This is one of the broadest portfolios in the foreign large-blend category. Its exceptional diversification mitigates the impact of holding the worst-performing names. It holds more than 7,000 stocks and has only 9% of assets in its 10 largest positions. Its regional composition looks modestly different from a typical fund in the category because it has a larger dose of emerging-markets stocks. But their weight in the portfolio isn’t large enough to materially increase the fund’s risk or compromise its category relative performance.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags US Market

Funds Funds

Touchstone Flexible Income Fund Class Y: A flexible Income fund providing income as well as capital appreciation

Post author By lvc-admin
Post date December 3, 2021
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Approach

The strategy’s primary hunting grounds include U.S. investment-grade and high-yield corporates, preferred stock, municipal bonds, and U.S. Treasuries. The strategy gains exposure to high-yielding corporate and municipal bonds via closedend funds–an uncommon tactic–which compose 5% to 15% of assets. Within these positions, the team focuses on the fund’s discount and quality of cash flow rather than its underlying holdings. Unlike most peers, the team doesn’t invest in emerging-markets debt, nor do they take on any currency risk. The strategy is benchmark-agnostic and flexible in its construction across asset classes and credit quality. It can invest up to 40% in junk-rated debt, which had peaked near 30% (including non-rated debt) up until September 2020. As of October 2021, the strategy’s non-investment grade exposure stands at 45%, owing to the increase in nonrated debt over the last year. The strategy tends to be concentrated; it is common to see individual positions between 2% and 4% each.

Portfolio

The strategy continued to maintain a high allocation to preferred securities (34% of assets as of October 2021), followed by structured credit (32%, mostly in commercial mortgage-backed securities). The team modestly added shorter term Treasuries and maintained a nominal allocation to cash and cash equivalents towards the end of 2020 due to near zero interest rates. However, in the first quarter of 2021, the portfolio cut its 9% allocation to Treasuries to zero as the long-end of the curve sold off and no desirable returns were seen in the short-end. Post the first quarter of 2021, the portfolio’s exposure to treasuries, mostly short-dated, has increased drastically to 16% as of October 2021, owing to the flat credit curve and the credit spreads for riskier securities having tightened to pre-pandemic levels. The team has also reduced the exposure to corporate credits, both investment-grade (3.7%) and high yield (6.4%), given tight credit spreads. The portfolio’s exposure to nonrated debt has increased and stood at 30% as of October 2021, an increase of roughly 18 percentage points from last year. Most of this exposure comprises multifamily MBS originated by Freddie Mac, but still carry some risk.

Performance

Institutional share class has shown middling performance within its nontraditional Morningstar Category peer group, returning 3.8% annualized. From November 2018 through November 2021, the strategy’s I share class has gained 6.5% annualized, outpacing more than 65% of its category peers, and beating its typical rival by 60 basis points. The team has made good use of its flexible mandate by tilting towards Treasuries and high-quality securitized credit heading into 2020 which helped ease some pain as the markets tumbled during the coronavirus-led self-off from Feb. 20 to March 23, 2020. However, the strategy’s 14.2% loss over that stretch was still in line with its peers. As markets recovered, the strategy gained a swift 25.3% from March 24, 2020, through to the end of the year, owing to the addition of battered corporate credits that rebounded later that year

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags Recommendations, US Market

Funds Funds

Vanguard Mid-Cap Growth Fund Investor Shares: A Solid Mid-Cap Growth offering with rock bottoms fees

Post author By lvc-admin
Post date December 3, 2021
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Approach

Frontier’s approach is best described as growth-at-a-reasonable-price. The team, like Wellington, also invests with a multi-year time horizon, though the end portfolio is more diversified, owning 70 to 80 stocks, while sector bets have stayed within 10 percentage points of the index over the years. Rounding out the subadvisor group is RS, which employs a sector-neutral approach to build a 60-80-stock portfolio. While risk management efforts–such as a desired 2:1 upside/downside ratio for each stock and the use of technical indicators–have proven efficacious on RS’ small-cap offering, they have consistently failed to have the intended impact in the mid-cap arena.

Portfolio

Portfolio’s sector weightings hover fairly close to the Russell Midcap Growth Index’s. As of June 2021, the biggest overweighting was to consumer discretionary, with 19% of assets, more than the Russell Midcap Growth Index’s 16%. The Wellington team purchased hospitality firm Hilton Worldwide Holdings in 2021’s second quarter, believing its asset light business model, good management team, and strong growth prospects in Asia will serve the stock well going forward. Conversely, the end fund held modest underweights to industrials and information technology.

People

This strategy’s three subadvisors are experienced, stable, and capable, driving a People rating upgrade to Above Average from Average. The group has been more successful in the small-cap space over the years, and the standalone RS Mid Cap Growth offering has struggled since its July 2008 inception. In October 2021, Vanguard slashed RS’ stake to 20% from 45%. Frontier also came on board in December 2018 and manages 40% of fund assets (down from 45%). While the January 2020 retirement of Stephen Knightly was a loss, a thoughtful transition to Chris Scarpa–who had been a comanager since 2010–and the grooming of longtime analyst Ravi Dabas as comanager mitigate concerns.

Performance

The current subadvisors have been in place here together since December 2018. Since then, through October 2021, the fund’s 28.5% annualized gain lagged the Russell Midcap Growth Index’s 31.1% return and 60% of its mid-cap growth. Frontier Mid Cap Growth–the strategy behind Frontier’s sleeve–gained 30.6% annualized gross-of-fees between December 2018 and October 2021, slightly lagging the index but placing in line with peers. While stock selection was strong in financials, it was poor in healthcare, and the underweighting to the solidperforming information technology sector also detracted.

Wellington–via its Focused Mid Cap Growth strategy–has been the strongest-performing subadvisor but long had had the lowest allocation, though Vanguard raised its stake to 40% of fund assets from 10% in October 2021. Between December 2018 and October 2021, its 31.8% annualized gain gross-of-fees bested 57% of peers. The sleeve benefitted from solid picks in I.T., including DocuSign and Square.

(Source: MorningStar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags Street Talks, US Market

Funds Funds

Franklin Income Fund Class C- a solid yield generating fund

Post author By lvc-admin
Post date November 30, 2021
No Comments on Franklin Income Fund Class C- a solid yield generating fund

The fund seeks to maximize income, while maintaining prospects for capital appreciation, by investing in a diversified portfolio of stocks and bonds. The fund tracks Linked Blended 50% MSCI USA High Dividend Yield Index + 25% Bloomberg High Yield Very Liquid Index + 25% Bloomberg US Aggregate Index

Process:

This fund aims to deliver income and capital appreciation using a flexible, valuation-conscious approach. Management invests in a mix of dividend-paying stocks, bonds, bank loans, convertibles, and equity-linked securities. But a heavy reliance on credit risk and the lack of an identifiable edge warrant a Process rating of Average. Management has significant flexibility to shift the portfolio, relying on bottom-up security selection, and yield in particular, to drive asset allocation without regard to sector weights or credit quality. The portfolio has averaged roughly 40% in equities. Within equities, management gravitates toward large-cap dividend-payers, which often results in big slugs of utilities, materials, and energy stocks. While this approach has consistently produced a relatively high yield and, at times, solid total returns, it has done so by relying heavily on high-yield bonds.

People:

This fund is backed by veterans, but the team doesn’t possess a clear advantage. Its People rating remains Average. Lead manager Edward Perks has helmed this fund since 2002 and Franklin Managed Income FBLAX since 2006. His comanagers possess complementary experience.

The equity and credit analyst teams the managers rely on for ideas boast a wealth of experience, but our confidence in them is muted. And Franklin Equity Income FISEX, an all-stock fund that invests in some of the same dividend-payers as this offering, is backed by the equity analyst team that generates ideas for a broad range of mandates rather than tailored recommendations.

Performance:

This fund’s substantial risks have resulted in high volatility relative to peers and middling risk-adjusted returns. This fund tends to be much more sensitive to equity markets than its typical allocation – 30% to 50% equity category peer because of its hefty dose of credit risk and its often-double-digit combined stake in equity linked notes and convertible bonds.

Price:

The expenses are critical to evaluate as they come directly come out of the expense. The analysts at Morningstar suggest that this share class will not be able to generate positive alpha relative to the benchmark index.

Asset Allocation:

About Fund:

The Fund aims to maximise income while maintaining prospects for capital appreciation by investing primarily in equity securities and long & short-term debt securities. The Fund may invest up to 25% of its net assets in non-U.S. securities. It’s three properties are: a balanced portfolio with exposure to the US markets, best of equity and fixed income teams and attention to risk elements.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags Top Stocks, US Market

Funds Funds Research Sectors

Bennelong ex-20 Australian Equities Fund: distils returns of the 20 largest companies on ASX

Post author By Dhruvi Dhomse
Post date November 23, 2021
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The Fund is suitable for investors seeking to distill out the influence of the returns of the largest 20 listed companies on the ASX and looking to tilt towards growth. As a result, the fund invests in stocks outside of the top 20 subsets of the market but with at least a minimum of $250m market cap. The manager is more of a purist stock picker who seeks to invest in companies he feels are on a genuine earnings growth path and feels that such companies are not common and to find these companies requires thorough and focused bottom up research process.

Investment Team:

The BAEP investment team consists of Mark East: Chief Investment Officer and Portfolio Manager, Keith Hwang: Director, Quantitative Research, Neale Goldstone-Morris: Senior Investment Analyst, Strategy, Kieran Sisson, Doug Macphillamy, Brad Clibborn, Jack Briggs: Senior Investment Analyst and Todd Briggs: Investment Analyst

Key Highlights:

The manager conducts deep dive, bottom-up research on companies it invests in. With a thorough understanding of their stock positions, the manager takes high conviction and genuinely active bets relative to the benchmark.
The fund has been investing since 2009 – the immediate aftermath of the global financial crisis. Since then, there have been several periods where market volatility has tested the manager’s ability to generate returns while following their investment process.
The Fund’s focus on stocks outside of top 20 ASX listed companies provides investors an opportunity to diversify and distil growth from typical core domestic equity strategies that are heavily influenced by the performance returns of shares in the top 20 listed companies.
The team of eight experienced analysts includes the PM.
The fund’s macro analyst provides top down insights on the macro and guides the team to where the team should focus their research.

Downside Risks:

• An economic recession in Australia/globally, leading to earnings recession

• Stock selection fails to yield alpha

• Key man risk – the PM (Mark East) departs – given he has the ultimate responsibility of running the strategy

Investment Process:

From all of the stock listed on the ASX, BAEP applies a screen to derive an Investment Grade Universe from which to find investment opportunities. The filters include a market capitalisation of greater than $250 million, sufficient liquidity, an earnings track record.
Idea Generation aims to identify those stocks within the Investment Grade Universe that warrant particular attention, thereby focusing research efforts on the most prospective candidates. The ideas build up into the Focus List.
Stock analysis is extensive and includes quantitative and qualitative analysis including field research.
Portfolios are constructed on a stock-by-stock basis. The inclusion, sale and weighting of a particular stock is determined by reference to a number of factors
The portfolio is constantly monitored, tested and optimised with ongoing changes.

Performance:

Fund Positioning:

About Fund:

The Fund’s objective is to outperform the S&P/ASX 300 Accumulation Index excluding the portion of return attributed to the S&P/ASX 20 Leaders Index, by 4% p.a. after fees on a rolling 3-year basis. The Fund invests primarily in Australian shares with high quality business models, strong growth, and underestimated earnings momentum and prospects.

(Source: Banyantree)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags Australian Market, Top Stories

Funds Funds

SPDR S&P/ASX 200 Listed Property Fund: Decent option for A-REIT investments in a competitive market

Post author By lvc-admin
Post date November 19, 2021
No Comments on SPDR S&P/ASX 200 Listed Property Fund: Decent option for A-REIT investments in a competitive market

About The Benchmark

A sector sub-index of the S&P/ASX 200, this index tracks the performance of Australian real estate investment trusts (A-REITs) and mortgage REITs.

Fund Objective

The SPDR S&P/ASX 200 Listed Property Fund seeks to closely track, before fees and expenses, the returns of the S&P/ASX 200 A-REIT Index.

Process

SLF aims to fully replicate the S&P/ASX 200 A-REIT Index. REITs are listed vehicles that own and operate property. REITs are required to pass on the majority of their income to investors to enjoy favourable taxation arrangements, and distributions are not franked. High payout ratios and an absence of franking mean that REITs typically offer a high headline yield relative to other stock market sectors. SLF is by far the longest running, with an FUM of AUD 650 million as at September 2021, which helps it to maintain trading levels far above most rivals. SPDR doesn’t participate in securities lending for Australian ETFs.

Portfolio

With the relatively short list of A-REIT names in the S&P/ASX 200, the portfolio is understandably concentrated. As at September 2021, the index consists of 24 holdings, with the top 10 accounting for over 85% of the total portfolio. The exposure to the largest current holding, Goodman Group, has ballooned significantly over the past five years to 27% from around 11%. Seeing that the index is relatively untouched by any reconstitutions, portfolio turnover is quite low at 5%. However, in case of an eventual entry or exit of the constituents, the concentrated index is susceptible to reconstitution, which may lead to a meaningfully altered portfolio.

Top 10 Holdings	Weight (%)
GOODMAN GROUP	27.07
SCENTRE GROUP	11.52
DEXUS/AU	8.59
MIRVAC GROUP	8.17
STOCKLAND	7.98
GPT GROUP	7.27
CHARTER HALL GROUP	5.93
VICINITY CENTRES	4.91
SHOPPING CENTRES AUSTRALASIA	2.20
CHARTER HALL LONG WALE REIT	2.06

Sector Allocation

Sub-Industry Breakdown	Weight (%)
Diversified REITs	34.79
Industrial REITs	28.49
Retail REITs	23.96
Office REITs	9.46
Specialized REITs	1.90
Residential REITs	1.41

People

The Global Equity Beta Solution team that is responsible for managing this ETF has undergone a leadership transition recently. Effective September 2021, John Tucker has been appointed as the new chief investment officer, replacing Lynn Blake, who has taken retirement. Tucker is a State Street veteran who has been in multiple senior leadership roles within GEBS for the past 20 years. The ecosystem and structure of the investment team is well-defined, where research and trading functions are centralised and spread out globally; however, portfolio managers are based locally. Australia-domiciled passive products are managed by a core team of Tucker and four portfolio managers: Alexander King, Lillian Poon, Andrew Howson, and Elda Dong.

Performance

The fund has managed its tracking difference well, matching up to the benchmark after accounting for management fees. SLF has recorded a return of 6.54% since its inception in 2002. As at the close of 2019, the annualised five-year returns for the fund stood at an attractive 10.55%, outperforming the category returns of 9.87%. The rally was mainly driven by the strong returns of Goodman Group in the latter half of the five-year period.

Total Return	1 Month	3 Month	6 Month	1 Year	3 Year p.a	5 Year p.a	Since Inception p.a
Fund (%)	0.38	4.27	12.07	30.25	9.57	8.63	6.54
Index (%)	0.42	4.38	12.34	30.87	9.87	8.96	6.78

(Source: MorningStar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags Australian Market, Top Stories

Funds Funds Sectors

Allspring Diversified Income Builder Fund – Class C: A fund providing high income

Post author By Aayushi Swami
Post date November 15, 2021
No Comments on Allspring Diversified Income Builder Fund – Class C: A fund providing high income

Fund Objective

The investment seeks long-term total return, consisting of current income and capital appreciation.

Approach

Portfolio

People

Performance

Top 10 Holdings

About the fund

(Source:Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Funds Funds

Resolution Capital Global Property Securities Fund: A diversified portfolio of stocks of real estate sectors

Post author By lvc-admin
Post date November 8, 2021
No Comments on Resolution Capital Global Property Securities Fund: A diversified portfolio of stocks of real estate sectors

wherein individual Portfolio Managers hold 25 to 35 stocks each. The Fund’s objective is to exceed the total returns of the Benchmark (FTSE EPRA/NAREIT Developed Index (AUD) Net TRI) after fees on a rolling 3-year basis.

Downside Risks:

Deterioration in Global economy, especially the property market (deterioration of property prices and fundamentals).
The Portfolio Manager/analysts miss-calculate their bottom-up valuation.
Softening in bond yields negatively impacting pricing.
Key person risks, i.e. Andrew Parsons, Marco Colantonio, Robert Promisel, Julian Campbell-Wood and members of the investment team.
risk.

Fund Performance & Current Positioning:

(%)	Fund	Benchmark	Out-performance
1-month	2.64%	1.90%	+0.74%
3-months	14.10%	12.29%	+1.81%
1-year	26.67%	34.93%	-8.26%
3-year (p.a.)	9.68%	7.18%	+2.50%
5-year (p.a.)	8.65%	6.16%	+2.49%
Since Inception (p.a.)	13.48%	12.33%	+1.15%

(Source: Resolution Capital)

Fund Positioning:

Stock	Sector	Listing	% of portfolio^*
Prologis	Industrial	US	8.10%
Invitation Homes	Residential	US	6.50%
Welltower	Healthcare	US	4.70%
Kimco Realty Corporation	Retail	US	4.20%
Equinix	Data Centres	US	4.10%
Essex Property Trust	Residential	US	3.60%
Canadian Apartment Properties	Residential	Canada	3.10%
Kilroy Realty Corporation	Office	US	3.10%
CubeSmart	Self-Storage	US	2.90%
Mitsubishi Estate Company	Office	Japan	2.80%
Total	43.10%

(Source: Resolution Capital)

Key Highlights:

Investment Team:

The investment team is well-resourced with strong credentials and investment experience and is appropriately aligned and remunerated. The PMs have strong credentials and lengthy experience in real estate: Andrew Parsons, Marco Colantonio, Robert Promisel, have at least 30 years industry experience whilst Julian Campbell-Wood has 17 years’ experience. Performance reviews are conducted twice per year and based on Investment performance of all client Funds strategies, Research analysis and outcomes, Compliance with mandate guidelines and Adherence to ESG policies.

Investment Philosophy and Process:

In our view, the Fund adopts the bottom-up stock picking fundamental process that most other peers typically follow. A key advantage in the fund’s investment process is the utilisation of their proprietary database to collate their research that enables cross comparisons among regions and sectors to highlight any discrepancies.

Performance:

Although past performance is not an indicator for future performance, it is an indicator of whether the Fund’s strategy has worked in the past. Although the Fund has performed well on an absolute basis, the Fund has underperformed relative to its benchmark in the past year by -8.3%. Nevertheless, over 3- and 5-year, and since inception, the fund has performed well relative to the benchmark.

Association with Pinnacle is a positive:

ASX-listed Pinnacle Investment Management holds a minority 44.5% stake in Resolution Capital whilst key staff own the remaining 55.5%. Pinnacle provides support via distribution and administration services, which is viewed as positive.

About the Fund:

The Resolution Capital Global Property Securities Fund (Unhedged) – Series II provides exposure to a diversified portfolio of stocks within a range of real estate sectors across developed markets (North America, U.K, Europe, and Asia Pacific). The Fund’s objective is to exceed the total returns of the Benchmark (FTSE EPRA/NAREIT Developed Index (AUD) Net TRI) after fees on a rolling 3-year basis.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags Australian Market, Top Stocks

Funds Funds

AMP Capital Specialist Property and Infrastructure Fund: A fully listed real assets portfolio

Post author By lvc-admin
Post date October 27, 2021
No Comments on AMP Capital Specialist Property and Infrastructure Fund: A fully listed real assets portfolio

The AMP Capital team also decides on strategic weights to each manager and allowable tactical deviations. Managers are assessed on such criteria as business structure; experience of the team; their alignment of interest, investment merit, and performance; and capacity and fees. The team is also responsible for portfolio review and rebalancing. Portfolio monitoring is undertaken using FactSet and Cortex risk systems.

Portfolio:

AMP Capital Specialist Property and Infrastructure is a multimanager portfolio designed to bring together a mix of Australian and global managers to produce a diversified portfolio of listed real estate and infrastructure. The strategy removed its last direct property asset in May 2021. The portfolio’s composition of the underlying managers had been fairly stable since its inception in 2014, but an October 2019 strategic asset allocation review spurred the decision to remove exposure to unlisted property from its prior 15% allocation (increasing the global listed infrastructure by 15%). AMP Capital has shown strong conviction and patience with the underlying strategies in the listed space, with listed investments now comprising the total portfolio. Both global listed property and global listed infrastructure are represented by internal AMP Capital managers, with allocations of 32% and 47%, respectively, as at July 2021. Australian listed real estate exposure of 20% is managed by passively in the UBS property index. This vehicle makes a suitable supporting holding, and it managed around AUD 259 million as at 31 July 2021.

People:

AMP Capital’s multimanager team sits within the shop’s Multi-Asset Group. MAG is headed by CIO Anna Shelley, who joined in AMP Capital in July 2021. Duy To was appointed head of public markets in August 2021. Day-to-day management of the strategy lies with Rebecca Liu and Trent Loi, who is also portfolio manager for the International Share strategy. External consultant Willis Towers Watson is used at times to work on specific projects and provide research on existing and potential strategies.

Price:

Analysts find it difficult to analyse expenses since it comes directly from the returns. The fees levied by the share class is under middle quintile. Analysts expect that it would be difficult to generate positive alpha relative to its benchmark index for this fund.

Performance:

AMP Capital Specialist Property and Infrastructure lagged its blended benchmark after fees to June 2021 since its December 2014 inception. The passive Australian listed property strategy (UBS Australian Property Index) has closely closely tracked the S&P/ASX 200 AREIT Index over time. The AMP Capital global property securities portfolio has delivered returns ahead of the FTSE EPRA NAREIT Developed TR AUD Hedged Index over the trailing three and five years to June 2021.

(Source: Factsheet from https://www.ampcapital.com/)

(Source: Factsheet from www.schwabassetmanagement.com) (Source: Morningstar)

About the Fund:

While AMP Capital Specialist Property and Infrastructure’s move to a fully listed real assets portfolio is well received, a period of team instability continues to hinder. This is a multimanager strategy combining Australian and international property and infrastructure managers to build a diversified core portfolio of real assets. The managers are assessed on various criteria such as business structure, team and its alignment, performance track record, and fees and capacity. Its inception date is 01 July, 2014. Total Assets under this fund are 264.9 AUD Million.

(Source: Morningstar)

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Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Tags Australian Market, Recommendations