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| Strategy | |
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| Fund Overview | The strategy is long-only, with a mandate to be between 90% - 100% invested. The Fund also employs a construction framework that ensures there is a sensible mix of exposures within the limited number of businesses in the portfolio. These limits are: - Maximum individual position size 7.5% - Minimum individual position size 2.5% - Maximum sector exposure 30% The Fund targets a cash allocation of between 0-10% but can have as much as 20% of the portfolio in cash in the event of an unprecedented global shock. Liquidity is extremely important. The Fund will typically look to invest in businesses within a market cap range of US$7.5billion all the way up to the largest companies in the world with market capitalisations in excess of $200b. Occasionally, we may find a business that exhibits the traits of a quality investment, but it is much earlier in its business cycle. The Fund can invest in these businesses, but they must clear a much higher bar for inclusion. Individually, these future compounders cannot comprise more than 4% of the fund, these businesses cannot collectively exceed 10% of the fund. |
| Manager Comments | The Fund returned -1.20% in October. Aitken noted fears of new rounds of hard lockdowns to halt the surge of cases of COVID-19 in Europe and the US, combined with uncertainty around the outcome of the US presidential election, saw volatility increase significantly in the latter half of the month, with markets selling off sharply in the final week. They added that being unhedged to the AUD has provided somewhat of a release valve for the Fund, as has been the case with the majority of market sell-offs this year. The biggest laggard in the portfolio for the month was Mastercard. The lack of high-margin cross-border transactions lead to a mix shift that depressed revenues and margins, missing market estimates of quarterly performance. Aitken believe consumers' inclination to pay with card rather than cash has only increased over the last 6 months and see that this has strengthened the cash-to-card transition that underpins Aitken's investment thesis. Aitken are focused on remaining disciplined in their approach, sticking to owning quality businesses and accepting that price volatility is the psychological cost of long-term compound returns. |
| More Information |
