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| Fund Overview | The investment team looks for industrial businesses that are simple to understand; they generally avoid large caps, pure mining, biotech and start-ups. They also look for: - Access to management; - Businesses with a competitive edge; - Profitable companies with good margins, organic growth prospects, strong market position and a track record of healthy dividend growth; - Sectors with structural advantage and barriers to entry; - 15% p.a. pre-tax compound return on each holding; and - A history of stable and predictable cash flows that DS Capital can understand and value. |
| Manager Comments | The September quarter featured reporting season. The results of businesses in the portfolio were mostly in line with DS Capital's expectations. They noted that outlook commentary, which is usually a focus, was understandably absent. The acceleration in adoption of new technology solutions due to the pandemic has fast tracked several sectors such as online retailers and cloud software businesses and, subsequently, this has had a favourable impact on several of the Fund's technology investments. Notable positive contributors over the quarter included Kogan, Sydney Airport and Breville, while A2 Milk detracted from performance. DS Capital expect COVID-19 will continue to be the dominant influence on stock markets for the foreseeable future. While they are not optimistic of a vaccine in the short-term, they believe that, in the event of a vaccine, the combination of significant stimulus, pent up demand and relief would lead to a rapid and strong recovery in economic conditions. |
| More Information |
