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.

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Funds Funds

Fidelity Australian Equities Fund – Fidelity International offers world class investment solutions and retirement expertise

Investment Objective

The investment objectives of the Fund are to achieve returns in excess of the S&P/ASX 200 Accumulation Index over the medium to long term, a core holding which invests in a diversified selection of around 30 – 50 Australian companies, uses a bottom-up stock-selection approach that focuses on undiscovered earnings potential, value and growth and to conducts regular company, factory and competitor visits to assess business strength, earnings quality and long-term growth outlook.

Approach of sustainable investing

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The approach to sustainable investing has three-fold

  1. The use of proprietary sustainability ratings, input from large specialist ESG team and external analysis and ratings to inform of a company’s ESG performance.
  2. The approach demands direct dialogue with companies and stakeholders on issues such as shareholder rights, modern slavery, supply chain management, bribery and corruption and climate change/risk. Where necessary they use proxy voting and shareholder resolutions to help improve practices.
  3. They work closely with external ESG-related bodies in Australia and around the world that seek to improve the way industries are regulated, how companies are managed, and to promote sustainable investing and social development.

Engagement is at the heart of the approach to sustainability. As active stewards of investors’ capitals that one should be making a positive impact on those companies in which one invests. The rigorous bottom-up research process means to understand ESG issues at a company level and believe that companies focused on these issues are more resilient and are more likely to perform better over the long-term.

Portfolio

Investment Team 

At Fidelity, one understands the value of connected networks. Their 400+ investment experts share their insights in real time across asset classes, sectors and regions, connected by one powerful global research platform. From London to Mumbai, Shanghai to Sydney, the unique local insights from team of more than 170 research professionals around the world to identify unique market patterns and trends and find the best global investment opportunities for you.

Fund Performance and Pricing

Past performance is not a reliable indicator of future results. The value of investments and the income from them can go down as well as up and investors may not get back the amount invested. Data shown does not take into account any Initial Charge that may apply. Fluctuations in currency exchange rates may affect the value of an investment. Please note that the shares are denominated in their respective share class currency and that the currency conversion provides an indicative price only.

About the Fund

The value of your investment may fall as well as rise and you may get back less than you originally invested. The use of financial derivative instruments may result in increased gains or losses within the fund. This fund invests in a relatively small number of companies. This can make the fund more volatile than other funds that are more diversified. There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. When interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall.

(Source: Fidelity International and Investing.Com)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

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Funds Funds

Zurich Australian Property Securities Fund: is a portfolio of Australian property securities

Investment Objective

To provide investors with an income stream and capital growth over the medium to long term. The Fund aims to outperform the S&P/ASX 300 AREIT Accumulation Index over a period of five years.

Investment Process

The Fund uses a detailed and rigorous investment process with the Managers employing an active, value-based investment style, characterized by incorporating bottom-up investment research into individual securities, with a particular focus on analyzing and forecasting the present and potential future income generation of each underlying property investment. The process consists of two fundamental stages as depicted in the diagram below:

The investment objective of the strategy is two-fold: 

  1. Research – The investment team gathers information through property inspections, company visits, industry analysis, macro-economic analysis and using relevant external research (research from stockbrokers and real estate research houses), before creating financial models of each stock in detail to determine the current and potential future income and to analyse its financial condition. The outputs from the models are then used in Renaissance Property Securities’ proprietary Value Ranking Model.
  2. Portfolio Construction – In this stage the Portfolio Managers meet regularly to determine the size of the active positions to be taken in each stock. The factors which determine the size of active positions within the portfolio include the following: (1) The relative value of each security versus other securities, as determined by Renaissance Property Securities’ Value Ranking Model; (2) Stock specific risks; (3) Size and liquidity of individual stocks; (4) Portfolio risk and; (5) Strength of conviction of the portfolio managers on each individual stock recommendation.

Portfolio

Investment Team 

Zurich Investments provides exclusive access to specialist managers recognised as being amongst the best in their area of expertise. The Company appointed Renaissance Property Securities Pty Ltd (Renaissance) as the strategic investment partner for the fund in November 2005, which is owned by two experienced investment professionals who directly manage the Zurich Australian Property Securities Fund. With over 45 years’ combined experience, investors benefit from the Fund Managers’ successful track record and focused expertise in Australian property securities investing. Below are the provided the bios of Portfolio Managers.

  • Carlos Cocaro – Portfolio Manager. Carlos has over 30 years of experience in managing, analyzing, and researching listed property securities. He began analysing listed property securities in 1986 as part of Armstrong Jones’ Australian equities team and joined Rothschild Australia Asset Management in 1994 as a specialist in listed property securities analysis and portfolio management. In 1997 he was promoted to Director, heading up the growing property securities team, a position he held until he formed Renaissance Property Securities in 2003.
  • Damien Barrack – Portfolio Manager. Damien has over 20 years’ experience managing, analyzing and researching listed property companies. Damien joined Carlos Cocaro in the Rothschild property securities team in 1998 where they worked together until 2003. Damien co-founded Renaissance Property Securities in 2003.

Fund Performance and Positioning 

Asset Allocation

About Fund

The Zurich Australian Property Securities Fund is a portfolio of Australian property securities, spread across retail, commercial and industrial property sectors, with an objective to provide investors with an income stream and capital growth over the medium to long term. The Fund aims to outperform the S&P/ASX 300 Property Trusts Accumulation Index over a period of five years.

(Source: Banyantree and Investment centre)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

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Funds Funds

JPMorgan Global Macro Opportunities Fund- multi-asset macro thematic fund targets positive returns in various market conditions

Investment Objective

To achieve capital appreciation in excess of its cash benchmark by investing primarily in securities, globally, using financial derivative instruments where appropriate.

Investment Process

The Fund’s investment process is driven by the investment team’s proprietary macroeconomic research agenda. The process is best summarized by the diagram below. The added advantage is the investment team’s ability to leverage JP Morgan’s extensive global platform for insights and reach. The team is regularly assessing existing and new investment strategies via daily meetings, weekly macro discussion, monthly core views updates and then also a quarterly strategy summit. 

A macro theme must be sufficiently different to existing themes already in the portfolio and the team needs to be able to measure the trends of changes it captures.

Investment strategy. A strategy can be sourced from anywhere including the investment team or JP Morgan’s broader global investment network. Each recommended strategy has a clearly defined macro-theme. The team categorizes each strategy into two broad categories – Traditional (e.g. long-only exposure) and Sophisticated (e.g. derivatives, directional).  

Portfolio construction and management

Portfolio Construction & Management. The lead portfolio manager has the ultimate decision-making power on which investment strategies are included in the portfolio, the team does generally tend to follow a consensus approach. The portfolio can have exposure across all major asset classes – equity, fixed income, commodities, currency and advanced derivatives – and exposure to both developed and emerging markets. The portfolio at any one time is expected to be made up of 6 to 10 macro-economic themes, which can equate to between 20 – 40 strategies. This means the overall portfolio can hold at any one time, typically, 100-150 securities. While monitoring the macro is continual, much of the macro debate is at a monthly meeting, where the teams might discuss risks to their core theses and potential paths of evolution in the macro landscape, as well as making changes to the macro themes, including removing or adding a new theme.

Investment Team 

Shrenick Shah: Shrenick Shah, managing director, is head of the Macro Strategies team at J.P. Morgan Asset Management, based in London. An employee since September 2010, Shrenick previously worked in the equity divisions at Deutsche Bank and Credit Suisse. Shrenick obtained a M.Sc. in Econometrics and Mathematical Economics from the London School of Economics.

Benoit Lanctot: Benoit Lanctot, Executive Director, is a portfolio manager in the Macro Strategies team, based in London. An employee since July 2011, Benoit previously worked as a senior analyst in the Convertible Bond team within Multi-Asset Solutions, responsible for the implementation of the fundamental analysis framework with global coverage. Prior to that, Benoit worked in investment banking for the Diversified Industries Group of Scotia Capital Inc. based in Montreal, Canada. He obtained a B.BA with a major in Finance from HEC Montreal and a Masters in Finance from London Business School. Benoit is a CFA and a CAIA charter holder. 

Josh Berelowitz: Josh Berelowitz, executive director, is a portfolio manager in the Macro Strategies team, based in London. An employee since September 2011, Josh has been focused on the macro portfolios since inception of the strategy in November 2012. Josh obtained a B.Sc. in Economics from the University of Nottingham and is a CFA charter holder.

Virginia Heriz: Virginia Heriz, executive director, portfolio manager in the Macro Strategies team, based in London. An employee since November 2019, Virginia previously was a portfolio manager at Aberdeen Standard Investments where she was responsible for tactical asset allocation portfolios and segregated multi asset mandates. Prior to that, Virginia was an analyst covering global financials at Martin Currie Investment Management. Virginia has a Diplôme d’Ingénieur from the École Nationale Supérieure des Telecommunications, Paris and a Masters in Telecommunications Engineering form the Universidad Politécnica de Madrid. 

Fund Performance and Positioning 

About Fund

The Fund employs a macro-thematic investment framework to achieve capital appreciation in excess of its cash benchmark by investing primarily in global securities, with the ability to use financial derivatives. The Fund targets +7.0% p.a. annualized over the medium term (net of fees) and/or above the Bloomberg AusBond Bank Bill Index, with a volatility of less than 10% p.a.

(Source: Banyantree and Investment centre)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

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Funds Funds

T. Rowe Price Global Equity Fund- T. Rowe Price Group provides a broad array of mutual funds

investment stockbroker risk analysis using multiple devices. Financial analysis using phone app and laptop. Market trading profit.

The Fund’s investment objective is to provide long-term capital appreciation by investing primarily in a portfolio of securities of companies which are traded, listed or due to be listed, on recognised exchanges and/or markets throughout the world. The portfolio may include investments in the securities of companies traded, listed or due to be listed, on recognised exchanges and/or markets, of developing countries. The Investment Manager may seek to achieve the Fund’s objective through investment of up to 100% of the Fund’s assets in one or more managed investment schemes, managed by the Investment Manager or an affiliate of the Investment Manager, that have the same or similar investment objectives as the Fund. The Investment Manager will seek, where material and to the extent reasonable, to reduce the Fund’s exposure to the fluctuation between its currency of denomination (ie AUD) and the currencies of investment of the Fund through the use of various techniques including the use of Derivatives such as forward currency contracts, currency options and futures.

Process

The investment process involves determining the Fund’s investment universe, which includes companies traded, listed or due to be listed, on recognised exchanges and/or markets, of countries which T Rowe Price has determined are developed or developing countries. T. Rowe Price leverages the proprietary fundamental research and analysis performed by the organisation’s integrated worldwide network of more than 400 equity investment professionals to identify highly recommended companies. T. Rowe Price engages equity investment professionals to identify superior investment ideas, assess opportunities in a global sector context, overlay macroeconomic and local market factors to refine industry and company analysis, and select what it believes to be investments with the most attractive risk-reward characteristics. The Investment Manager is actively involved with the network of equity investment professionals during the idea generation and refinement process. Ultimately, the portfolio manager applies judgment to construct a focused global portfolio consisting of the highest conviction investment ideas, within a diversified framework of country, sector and company guidelines.

People

Chris Di Leva, CFA Director, Portfolio Manager, Andrew Bascand Managing Director, Portfolio Manager, Lewis Fowler, CFA Investment Analyst.

Performance

To provide long-term capital growth by investing primarily in a portfolio of securities which are traded, listed or due to be listed, on recognised exchanges and/or markets throughout the world.

Price

They have partnered with Baltimore-based fund manager T. Rowe Price to offer this global equity fund in New Zealand. It contains a broadly diversified portfolio of global equities, typically comprising around 150 stocks. This high conviction portfolio contains companies which the T. Rowe Price team believe exhibit above-average and sustainable growth characteristics

Asset Allocation

About Fund

The T. Rowe Price Global Equity Fund is a high conviction, truly global portfolio seeking to invest in durable quality growth companies in some of the most fertile industries around the world. T. Rowe Price Australia Limited (“Investment Manager” or “T. Rowe Price”) is a subsidiary of the Baltimore-based T. Rowe Price Group, Inc. which is a global investment management organisation with $2.16 trillion in assets under management as of June 30, 2021. T. Rowe Price Group provides a broad array of mutual funds, sub-advisory services, and separate account management for individual and institutional investors, retirement plans and financial intermediaries. The organisation also offers sophisticated investment planning and guidance tools. T. Rowe Price’s disciplined and risk-aware investment approach focuses on diversification, style consistency and fundamental research.

(Source: Banyantree)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Investor Desk. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Investor Desk and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Investor Desk and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Investor Desk and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Investor Desk and Banyan Tree do and seek to do, business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Investor Desk and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Investor Desk and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Investor Desk and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Investor Desk and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and is not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Investor Desk and Banyan Tree.

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Funds Funds

Bennelong ex-20 Australian Equities Fund: Has a track record of adding value by outperforming the market over the long-term

Fund Objective

The Fund’s objective is to grow the value of your investment over the long term via a combination of capital growth and income, by investing in a diversified portfolio of primarily Australian shares, providing a total return that exceeds the S&P/ASX 300 Accumulation Index by 4% per annum after fees (measured on a rolling three-year basis). 

Fund Strategy

The portfolio comprises securities purchased primarily from, but not limited to, the S&P/ASX 300 Index (but excluding those securities in the S&P/ASX 20 Index). The Fund may invest in securities expected to be listed on the ASX except those expected to be included in the S&P/ASX 20 Index upon listing. The Fund may also invest in securities listed, or expected to be listed, on other exchanges where such securities relate to ASX-listed securities. Derivative instruments may be used to replicate underlying positions on a temporary basis and hedge market and company-specific risks. The Fund cannot purchase securities that are in the S&P/ASX 20 Index. However, when a security that is held within the Fund moves into the S&P/ASX 20 Index, that security may continue to be held for so long as deemed appropriate. The investment team will use its discretion in selling down that security, having regard to the best interests of unitholders. In this way, the Fund may hold securities in the S&P/ASX 20 Index from time to time.

Portfolio Performance

Investment Team:

The BAEP investment team consists of eight investment professionals:

  1. Mark East: Chief Investment Officer and Portfolio Manager 
  2. Keith Hwang: Director, Quantitative Research 
  3. Neale Goldstone-Morris: Senior Investment Analyst, Strategy 
  4. Kieran Sisson: Senior Investment Analyst 
  5. Doug Macphillamy: Senior Investment Analyst 
  6. Brad Clibborn: Senior Investment Analyst 
  7. Jack Briggs: Senior Investment Analyst 
  8. Todd Briggs: Investment Analyst 

In the last two years, there has been one hire Doug Macphillamy: Senior Investment Analyst and one departure Julian Beaumont.

BAEP operates under a flat organisational structure with all team members contributing to the investment decision making process. This model has been deliberately adopted to ensure a collaborative effort and avoid a hierarchical structure. Collectively, the investment team has experience in portfolio management; fundamental, macroeconomic, strategy & quantitative research and analysis, and in trading & execution. There is a series of constant checks, balances and back-ups in the business and investment process which support its structure. Mark East (CIO) has the final say on portfolio construction and ultimately accountability/responsibility. The portfolio manager is supported by the extensive resourcing within the broader BAEP investment team. Keith Hwang has primary responsibility for trading and execution, with Kieran Sisson acting as back-up.

About Fund:

Bennelong ex-20 Australian Equities 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% per annum 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, investmentcentre)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Laverne Investing. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Laverne and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Laverne and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Laverne and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Laverne and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Laverne and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Laverne and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Laverne and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Laverne and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Laverne and Banyan Tree.

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Funds Funds

Magellan Global Fund Open Class: Investment process focuses on high quality, liquid companies

Investment Objective

The investment objectives of the Fund are to achieve attractive risk-adjusted returns over the medium to long-term, while reducing the risk of permanent capital loss.  

Investment Process

The investment objective of the strategy is two-fold: 

  1. Achieve attractive risk adjusted returns over the medium to long-term (translates to 9% p.a. net of fees long-term target)
  2. Minimise the risk of permanent capital loss (downside protection)

The Magellan Global Fund aims to invest in ‘outstanding companies’ at attractive prices, while also managing investment risk through a comprehensive understanding of the macroeconomic and broader environment. ‘Outstanding’ in this context refers to companies that are able to “sustainably exploit competitive advantages in order to continually earn returns on capital that are materially in excess of their cost of capital.” As such, the Fund is not deterred by companies that may be perceived as trading expensively (e.g. at high multiples), so long as their underlying businesses are outstanding, and share prices are assessed to be trading at a discount to intrinsic value.

The investment team assesses each stock via five quality criteria (economic moat, re-investment potential, business risks, agency risks, and ESG factors).  This analysis reduces the universe to around 300 stocks which then undergo detailed bottom-up analysis.  The team discusses the results to determine stocks that will be recommended to the investment committee. Investments will need to have a margin of safety (discount to intrinsic value) to enter the portfolio.

The stringent quality criteria result in a concentration in global franchises, information technology, global infrastructure and niche financial services companies. Analysts build discounted cash flow models to determine the intrinsic value of each company. A “conviction scoring matrix” is also used to ensure that each company is consistently evaluated both relative to peers and on a standalone basis.

Portfolio

Investment Team 

In February 2022, CIO and Lead Portfolio Manager Hamish Douglass took, effective immediately, a medical leave of absence for personal reasons and mental health issues. It is important to note, the Company does expect Mr Douglass to return in due course when he is healthy to return. 

In June 2022, the Manager announced that Mr. Douglass will cease to be a permanent member of Magellan’s staff on 15 June 2022 and will commence the consultancy role on 1 October 2022. Mr. Douglass will be available to the investment team, as required by them, to share his insights including his views on macroeconomic and geo-political matters.

In the interim, Chris Mackay (Magellan’s co-founder) will step in and oversee the portfolio management of Magellan’s global equity retail funds and global equity institutional mandates. Chris is a highly experienced Portfolio Manager with a solid track record in global equities. Further, Nikki Thomas has re-joined Magellan as a Co-portfolio manager of Magellan’s global equity strategies. Nikki was due to commence in March however due to this announcement, she agreed to start 7th February. Nikki is a highly regarded Portfolio Manager with over 20 years of experience in the management of global equity portfolios. Nikki was instrumental in the development of the Magellan investment team’s processes in 2006, and she has a deep knowledge of Magellan’s investment universe. Her experience and relationships with investment advisers and consultants will add further depth to the investment team. Chris Mackay will be working with Deputy CIO Dom Giuliano, Nikki Thomas, Arvid Streimann and Chris Wheldon in respect of the co-management of the global equity and high conviction retail funds and institutional mandates.

Fund Performance and Positioning 

About Fund:

The Magellan Global Fund (Unhedged) is a concentrated, currency unhedged, benchmark unaware international equities strategy that typically contains 20-40 stocks. The objectives are capital preservation and reduction of downside volatility risk, while having a minimum return objective of 9% p.a. (net of fees).

(Source: Banyantree)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Laverne Investing. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Laverne and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Laverne and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Laverne and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Laverne and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Laverne and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Laverne and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Laverne and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Laverne and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Laverne and Banyan Tree.

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Funds Funds

Vanguard Australian Shares Index Fund; Offers potential Long Term Capital Growth along with Dividend income and Franking Credits

Investment Objective

Vanguard Australian Shares Index Fund seeks to track the return of the S&P/ASX 300 Index before taking into account fees, expenses and tax.

Investment Strategy and Investment Return Objective

The Fund seeks to track the return of the S&P/ASX 300 Index before taking into account fees, expenses, and tax. The S&P/ASX 300 Index includes the large cap, mid cap and small cap components of the S&P/ASX index family. The Fund will hold all of the securities in the index most of the time, allowing for individual security weightings to vary marginally from the index from time to time. The Fund may invest in securities that have been removed from or are expected to be included in the index. The Fund may engage in securities lending. Securities lending is a common practice where holders of securities make short term loans of shares in return for a fee, to incrementally increase returns to investors.

Performance Return

About Fund:

Vanguard Investments Australia Ltd (“Vanguard”) is a wholly owned subsidiary of The Vanguard Group, Inc. The Vanguard Group, Inc. is one of the world’s largest global investment management companies, with more than AUD $8.6 trillion in assets under management as of 31 March 2020. In Australia, Vanguard has been serving financial advisers, retail clients and institutional investors for more than 20 years. Vanguard is the responsible entity of the Fund. As responsible entity, Vanguard is solely responsible for the management and administration of the Fund. Vanguard is also the investment manager for the Fund and has appointed other entities within the Vanguard group of companies to provide investment management related services to the Fund. Investors will be notified of any future change in the investment manager of the Fund and this PDS will be updated accordingly. 

(Source: https://www.vanguard.com.au/)

DISCLAIMER for General Advice: (This document is for general advice only).

This document is provided by Laverne Securities Pty Ltd T/as Laverne Investing. Laverne Securities Pty Ltd, CAR 001269781 of Laverne Capital Pty Ltd AFSL No. 482937.

The material in this document may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This document does not purport to contain all the information that a prospective investor may require.  The material contained in this document does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. The material contained in this document is for sales purposes. The material contained in this document is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. This document should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.

The material in this document has been obtained from sources believed to be true but neither Laverne and Banyan Tree nor its associates make any recommendation or warranty concerning the accuracy or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. Any opinions and or recommendations expressed in this material are subject to change without notice and, Laverne and Banyan Tree are not under any obligation to update or keep current the information contained herein. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.

Laverne and Banyan Tree and its respective officers may have an interest in the securities or derivatives of any entities referred to in this material. Laverne and Banyan Tree do and seek to do business with companies that are the subject of its research reports. The analyst(s) hereby certify that all the views expressed in this report accurately reflect their personal views about the subject investment theme and/or company securities.

Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by Laverne and Banyan Tree, its associates, officers, directors, employees, and agents.  Except for any liability which cannot be excluded, Laverne and Banyan Tree, its directors, employees and agents accept no liability or responsibility for any loss or damage of any kind, direct or indirect, arising out of the use of all or any part of this material.  Recipients of this document agree in advance that Laverne and Banyan Tree are not liable to recipients in any matters whatsoever otherwise; recipients should disregard, destroy or delete this document. All information is correct at the time of publication. Laverne and Banyan Tree do not guarantee reliability and accuracy of the material contained in this document and are not liable for any unintentional errors in the document.

The securities of any company(ies) mentioned in this document may not be eligible for sale in all jurisdictions or to all categories of investors. This document is provided to the recipient only and is not to be distributed to third parties without the prior consent of Laverne and Banyan Tree.

Categories
Funds Funds

Realindex Australian Share-Class A: A well versed, Economical Option with Good Background

Approach
Realindex uses a systematic index method employing four equally weighted measures of a company’s economic size to rank and weight stocks in the portfolio. These criteria are adjusted sales, cash flow, and dividends and latest available adjusted book value. Additional earnings quality, near-term value, and debtcoverage filters act to reduce exposure to stocks with greater uncertainty. A signal was also introduced in November 2015 that downweights stocks with negative momentum and overweights stocks with positive momentum. As a part of its endeavor to improve current metrics, Realindex has more recently refined the book value metric to factor in intangibles as well by adjusting it with capitalize R&D and marketing expenses. The filters have contributed to a value bias and tilt to established companies that typically trade at a discount. This alternative approach to traditional index investing aims to eliminate the relationship between portfolio weighting and over/undervaluation associated with weighting a portfolio by market cap. The portfolio is rebalanced quarterly, resulting in average annual turnover of about 15%. The team handles all aspects of research, portfolio management, implementation, and execution with a focus on minimizing trading costs and market impact.


Portfolio
Realindex constructs a diversified, value-leaning portfolio. The strategy’s factors and price filters can lead to some differences relative to the more commonly used S&P/ASX 200 Accumulation Index. For example, the portfolio typically has lower price/book ratios and higher dividend yields. Realindex’s absolute weighting to most sectors remains relatively stable because the fundamental size characteristics tend not to fluctuate wildly unlike the sector weights fluctuation in market-cap benchmarks. Other deviations have been a historic tilt away from healthcare and real estate. Relative to the category index, S&P/ASX 200 Index, the strategy is value-focused and yield-oriented. Large-cap bias is apparent in the portfolio, but it is relative to the category average. As of November 2021, the portfolio was overweight in financial services and underweight in resources and healthcare. Realindex’s portfolio, traditionally, has remained quite similar to market-cap benchmarks overall. Historically, active share has hovered around 20%.

People
Realindex has been through a significant phase of transition in the past couple of years bought about by the end of the partnership with RAFI and the exit of a few senior portfolio managers. This has provided an opportunity for Realindex to revamp its overall team structure and bring on experienced investment professionals. The experienced David Walsh has joined as the head of investment, leading portfolio management and research, which Scott Hamilton leads. With the hires of Joana Nash and Ron Guido as experienced senior quant portfolio managers, Realindex has also beefed up its quant research capabilities.
The team is nimbler now for prioritization and effective collaboration on research initiatives and efficient implementation of the research outcomes, although it is preferred to have clearer lines between the research and portfolio management teams. The visible progress made in the trailing 18 months in research projects (for example, ESG factor impact on price and incorporating intangibles into the book value) augmenting the investment process through the implementation of novel signals is testimony of the team’s collective ability. The recent departure of experienced senior portfolio manager Raelene De Souza is unfortunate. Historically, Realindex has been successful in attracting top investment talent. But the length of their association with the firm has been shorter than it is prefered.


Performance
Realindex Australian Shares has delivered impressive peer-relative performance from inception through February 2022. Its five-year return of 8.5% per year as of February 2022 has easily outpaced the category average but only matched the broader market’s index return, indicating the tough environment it has been for value managers. This performance is principally attributed to the overweighting in materials, underweighting in healthcare, and energy. Better stock inclusion from the resources and consumer cyclical sectors has been additive too. Specifically, overweightings in BHP Group and Wesfarmers has added to performance and offset marginally by the overweighting in Westpac Banking. Amid the pandemic-induced uncertainties across the market, the strategy was admirably more resilient than the average category manager. The impressive outperformance was largely fueled by the strategy’s overweighting in materials, consumer cyclical, and consumer staples (a recurring theme across short- and long-term performance), although slightly offset by its overweighting in financial services. Over the trailing year through February 2022, the strategy has outperformed the S&P/ASX 200 Index but marginally stayed below the category average as value stocks have staged a reversal.

About Fund:
Realindex forms a universe of Australian companies based on accounting measures.Factors such as quality, near – term value and momentum are applied to form a final portfolio of companies. The resulting portfolio has a value tilt relative to the benchmark and provides the benefits of being lower in cost, lower turnover and highly diversified compared to traditional active investment strategies. Realindex overhauled its investment team with an aim to create a nimbler team structure and has hired investment professionals with a high skillset and experience level. The new team has made real progress in the trailing 18 months defining the research agenda and prioritizing projects in terms of their potential to value add. These developments paint a positive picture for the strategy; however, investors should note that the team’s tenure is short and Realindex’s track record in team turnover has not been impressive. As such, it is alleged for the investment team to exhibit longevity before experts’ conviction level is strengthened.

(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.

Categories
Funds Funds Research Sectors

TIAA-CREF Core Plus Bond Fund Premier Class Bested Almost 70% Of Its Distinct Peers

Process:

Lead manager Joe Higgins continues the thoughtful relative value approach that has been in place both here and on his other charge, TIAA-CREF Core Bond TIBDX. This strategy earns an Above Average Process Pillar rating. Higgins has the ultimate authority in ensuring what holdings go into the portfolio but draws heavily on the strength and expertise offered by the sector managers, analysts, and macroeconomic strategists in identifying relative value opportunities across the fixed-income universe. The strategy can invest in everything from corporate bonds and mortgages to municipal bonds and emerging-markets debt, with the higher-risk sectors like high-yield bonds, bank loans, and emerging-markets debt ranging between 10% and 30% depending on the team’s outlook and risk appetite. The strategy has avoided taking extreme positions in any of those areas and has generated its alpha from a variety of sources instead of relying on any one area. This approach has benefited investors through steady-as-it-goes performance rather than wild swings based on drastic portfolio shifts, and it has worked through a variety of market environments. 

Portfolio:

As of December 2021, the portfolio’s largest exposures were to investment-grade corporate bonds (24.2% of assets), agency mortgage-backed securities (18.6%), and emerging-markets debt (10.2%). The emerging markets exposure rarely if ever broke double-digit threshold, but its allocation has been on the upswing since March 2020 given the portfolio managers’ belief in its ability to outperform over the long term. The emerging markets’ relative lack of direct correlation to domestic corporate moves, as well as premium on offer from new issuance, make them attractive. This overweighting also makes sense to the managers in context of a rising rate environment, as they seek refuge in assets that are not hypersensitive to rate increases. That 10.2% stake in emerging-markets debt is almost 4 times the category peer median, though, and about half of it is rated below-investment-grade. Coupled with 5.6% in high-yield corporates, 4.3% in nonagency mortgages, and 2.7% in senior loans, the “plus” sector exposure of this portfolio amounted to 22.7% at the end of December 2021. This edges toward the higher half of the 10%-30% “plus” budget and represents increased credit risk, but the strategy’s yield (a proxy for risk) has hugged quite closely to the peer median in the past couple of years, indicating a reasonable level of risk-taking.

People:

Joe Higgins, who replaced long time lead manager Bill Martin at the end of 2020, is a seasoned and capable manager supported by three experienced comanagers and a robust analyst team. The strategy earns an Above Average People Pillar rating. Higgins had been leading the Core strategy since 2011, has been with the firm since 1995, and was previously sector lead on asset-backed securities and commercial mortgage-backed securities. He is supported by the same trio of comanagers that backed Bill Martin: government specialist John Cerra, high-yield leader Kevin Lorenz, and emerging-markets expert Anupam Damani. They are backed by a robust investment team that continues to expand following the legacy Nuveen and Symphony merger. The organization now boasts considerable firepower, with 43 portfolio managers and 60 analysts spread across the fixed-income platform. Even though Higgins has the ultimate decision-making power for this strategy, he draws on the strength and expertise of the sector managers in allocating capital to portfolios per mandate requirements. As such, the whole team provides input to help with portfolio construction, and often the managers’ portfolios will rhyme with each other. Additionally, the introduction of an investment committee and strategy groups provided more formalized structures for manager discussions and viewpoint sharing.

Performance:

The strategy under Joe Higgins’ tenure has bested almost 70% of distinct peers in the intermediate core-plus bond category, keeping up with the record his predecessor Bill Martin set during his tenure from September 2011 to December 2020. Over that period, the Institutional share class returned 4.5% annualized and outpaced roughly two thirds of peers. While lagging performance punctuated this record at various points, most notably in March 2020, by and large “measured consistency” was the characteristic on display for this strategy’s performance. Following the rough showing in early 2020 when the strategy lost 8%, almost 200 basis points more than the peer group median, the strategy experienced more bumps all throughout 2021 as rate volatility had a negative impact on mortgage holdings. On the plus side, the strategy had an underweighting in agency mortgages relative to the benchmark (18.6% versus 27.4% at year-end) so the hit was less severe, and an overweighting in high-yield corporates relative to the bogy (5.6% versus 0%) proved rewarding given robust economic conditions.

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(Source: Morningstar)

Price:

It’s critical to evaluate expenses, as they come directly out of returns. The share class on this report levies a fee that ranks in its Morningstar category’s cheapest quintile. Based on our assessment of the fund’s People, Process and Parent pillars in the context of these fees, we think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Analyst Rating of Bronze.

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(Source : Morningstar)

About Funds:

TIAA-CREF Core Plus Bond has an experienced lead manager and the solid process remains intact, while the expansive supporting cast has only broadened. The strategy’s Institutional and Advisor share classes earn a Morningstar Analyst Rating of Silver, while the more-expensive share classes are rated Bronze. The W share class, which does not charge a fee, is unrated. Veteran manager Joe Higgins, who has led the sibling strategy TIAA-CREF Core Bond TIBDX since 2011, took over this strategy at the end of 2020 when long time lead manager Bill Martin retired. Higgins was a natural replacement given that he had been running a similar, more-conservative mandate. He is supported by the same trio of comanagers that backed Martin: government specialist John Cerra, high-yield leader Kevin Lorenz, and emerging-markets expert Anupam Damani. All told, Nuveen’s robust taxable fixed-income group boasts more than 100 portfolio managers, analysts, and traders that help Higgins fulfil his mandate. The strategy’s solid process remains unchanged and peppered with measured risk-taking. Higgins and team execute a relative value process that incorporates a broad opportunity set, with the bulk of assets in investment-grade securities and a smaller subset in higher-risk “plus” sectors like high-yield bonds, bank loans, and emerging-markets debt that will typically amount to 10%-30% of assets depending on Higgins’ outlook and allocation decisions. 

(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.

Categories
Funds Funds

Fidelity Sustainable Asia Equity Fund W-Accumulation (UK): Top Picks Among Asian Equity Offerings

Approach

This UK vehicle has formally adopted a sustainability mandate since April 2021. The investment process starts with hard exclusions, which contains firms with material exposure to weapons, tobacco, coal miners, and oil/gas extraction, among others. The exclusion list was further extended in 2021 to include oil/gas/ nuclear power utilities and firms that the team marked to have “deteriorating” ESG momentum within their sustainability rating framework, but it still accounted for less than 5% of the MSCI AC Asia ex Japan Index, and it hasn’t been seen  trigger any material changes to the portfolio over the past year. Dhananjay Phadnis has long favoured quality companies run by strong management teams that can demonstrate cinsistent value creation. It is considered the adoption of a sustainability framework a formalisation of the approach that he has already employed rather than a material change. Phadnis focuses on a firm’s competitive advantages, management quality, potential for improvement on ESG practice, and valuations in stock selection. The end portfolio consists of 50-70 names, which typically are fundamentally sound businesses trading below their intrinsic values and out-of-favour stocks with turnaround catalysts. Sector and country allocations are a residual of stock selection, though weights must stay within 10 percentage points of the index. Phadnis has done an excellent job extracting performance out of the strategy’s risk budget, and his investment savvy brings a further edge to the approach’s execution. Overall, the strategy maintains Process rating of High.

Portfolio

Dhananjay Phadnis increased the portfolio’s exposure to financials to 28.1% as of December 2021 from 19.3% a year ago, which represented a 9.4% overweighting compared with the MSCI AC Asia ex Japan Index. He added to AIA, despite it being a major underperformer in 2021. At Analysts’ January 2022 meeting, Phadnis remained positive on the insurer’s growth outlook, noting that it managed to expand its agent head count and branch out into new provinces in China when other Chinese insurers experienced difficulties in maintaining their agency force in 2021. Conversely, his conviction in Ping An Insurance waned given its slower-than-expected agency reform and its questionable decision of buying a majority stake in bankrupt Founder Group, and he has therefore exited his position. Meanwhile, the December 2021 portfolio continued to have an overweight position in information technology, where its 27.3% stake was above the index’s 25.8%. Phadnis liked SK Hynix, believing that the chipmaker’s acquisition of Intel’s NAND unit will enhance its competitiveness in the global memory market and that it has better corporate governance among Korean companies. Within consumer discretionary (16.1%), Phadnis initiated a stake in Meituan in July 2021 when its valuation became more compelling amid the regulatory crackdown. He believed the food delivery giant’s business model can adapt to new regulatory standards, noting its pricing power and efficient delivery network in the segment.

People

Dhananjay Phadnis brings 20 years of investment experience and has led this strategy’s UK and Luxembourg-domiciled vehicles since November 2013 and March 2015, respectively. He joined Fidelity in 2004 as an analyst and covered a variety of sectors before being promoted to portfolio manager in 2008. He has since posted excellent results across the single-country and regional mandates under his management, though he now focuses on this sustainable Asia equity strategy, which includes the USD 1.2 billion, Luxembourg-domiciled Fidelity Asian Equity fund that Phadnis took over from former manager Suranjan Mukherjee in August 2021. Phadnis had a total AUM of USD 6.1 billion as of December 2021. It is alleged Phadnis is one of the best Asian equity managers, who has consistently showcased astute investment savvy and a great passion for investing. Director of sustainable investing Flora Wang has been the strategy’s assistant portfolio manager since February 2021, when it formally adopted a sustainability mandate. Most of Wang’s contributions currently lie in the ESG integration front, including engaging with companies and identifying materiality issues. She is also gradually developing her fundamental stock-picking skills under Phadnis’ mentorship, and it is monitored how her role evolves. Phadnis is supported by Fidelity’s deep Asia Pacific ex Japan team of 58 analysts who average nine years of experience and six years with Fidelity. The team has showed greater stability since 2020 and has further grown with six additions in 2021 through September. Overall, the strategy continues to merit a People rating of High.

Performance 

Lead manager Dhananjay Phadnis has delivered excellent results since he took over the UK-domiciled vehicle in November 2013. Through 31 Jan 2022, the W Acc share class returned 12.3% per year (in pound sterling), beating the MSCI AC Asia ex Japan Index’s 8.57% gain, the MSCI Emerging Markets Asia Index’s 8.86% gain, and 96% of its Asia ex Japan equity category peers. Its standard deviation was slightly higher than the indexes but in line with typical peers, resulting in robust risk-adjusted results. Indeed, the share class’ Sharpe ratio of 0.58 during the same period outpaced both indexes and 97% of peers. The outperformance was primarily driven by strong stock selection in China and India, with consumer discretionary, communication services, and financials contributing from a sector perspective. 

Phadnis’ quality bias and prudent risk management helped buoy the strategy’s relative performance in the 2021 down market. Although the W Acc share class lost 3.2% last year, it outperformed the MSCI AC Asia ex Japan Index by 64 basis points and ranked in the 48th percentile among peers. The vehicle primarily benefited from solid stock picks in the communication services and industrials sectors, with Bharti Airtel, NAVER, and Titan Wind Energy being some of the top contributors. The underweightings in Alibaba and Tencent and not owning Pinduoduo also helped, as they plunged on the back of heightened regulatory crackdowns in 2021. Conversely, stock picks in financials and healthcare detracted.

About Fund:

Fidelity International Limited is mainly owned by management and members of the Johnson family, who founded US-based Fidelity Investments. The entities have been separate since 1980, and though there are some similarities, in practice there is only limited alignment between the two. There were a number of personnel changes in 2018-19, including a change in CEO and the CIOs of equities, fixed-income, and multiasset, but the composition of senior management has been relatively stable since. More important, these changes do not seem to have negatively affected day-to-day investment activities, and on the whole, the initiatives undertaken by new management seem sensible.

(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.