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6 May 2022 - Hedge Clippings |06 May 2022
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Hedge Clippings | Friday, 06 May 2022
This week the RBA governor Philip Lowe abandoned his previous expectation made in March 2021, namely that for inflation to be sustainably in the 2-3% range, then wages growth (then 1.4% and the lowest on record) would need to be sustainably above 3%. As he wasn't expecting that to occur any time soon he stated "the cash rate is very likely to remain at its current level until at least 2024". The RBA's main concern at that time was that inflation was too low. The rest, as they say, is history. This week the RBA lifted official rates by 0.25% to 0.35%, and the big four banks' mortgage rates followed suit. One of the problems facing economists and their economic forecasting is that all the models rely on historical back-testing, and they're generally not so good when it comes to expecting the unexpected. In this case, wages growth has remained subdued (as per the RBA's expectations) in spite of a tight labour market and unemployment running at just 4%. However, inflation - at 5.1% over the 12 months to March - has jumped out of the blocks, thanks mainly to external and generally one-off factors. Back to March 2021, and RBA Governor Philip Lowe expected these one-off factors - which he described as "transitory" - to be mainly pandemic or drought related, and he also stated that the RBA board would "look through" these when setting monetary policy. The best laid plans etc., etc. To be fair (as Scomo is keen to point out), this is not unique to Australia, and no one to our knowledge anticipated Putin's invasion of Ukraine and its effect on oil and energy prices. Inflation in both the US (+8.5%), the UK (+7.0%), and the Euro area (+7.4%) are all higher than Australia's. As a result, the US Fed raised rates by 0.5% after lifting them by 0.25% in March, and overnight the Bank of England raised theirs by 0.25% to 1.0%. US equity markets, which have been anticipating rate rises, but maybe not by 50 bps, took fright, and the ASX has followed suit. Cryptocurrencies led by Bitcoin, supposedly uncorrelated to equities, dropped over 8%. However, in Australia the main concern seems to be the overheated residential property market, which just goes to show that you can't please all the people all of the time. Thanks to 10 years of falling and ultra low interest rates, property prices have skyrocketed, benefiting some, and locking others out of the market. Higher rates will, according to some forecasters such as Christopher Joye in today's AFR, cause house prices "to correct by up to 25%". That should cause some grief for those recently joining the market, but please future new entrants. While our obsession with property prices will remain, the greatest issue from here is the balancing act the RBA will have managing the economy by trying to tame inflation (as above, largely caused by global "transitory" issues and events) using tighter monetary policy, while not stalling the economy and, thereby increasing unemployment as a result. Labour's shadow treasurer Jim Chalmers wants higher real wages (as does the RBA), but that's just going to feed into higher "non transitory" inflation. A balancing act indeed - and if history tells us anything, it's that the RBA is generally behind the curve when it comes to timing. News & Insights Seeking predictable returns during economic turmoil | Laureola Advisors Powell seeks 'immaculate disinflation'; one that rids the US of inflation without shedding jobs | Magellan Asset Management Are the winners today also the winners of tomorrow? | Insync Fund Managers |
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March 2022 Performance News April 2022 Performance News Bennelong Twenty20 Australian Equities Fund Bennelong Kardinia Absolute Return Fund AIM Global High Conviction Fund |
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6 May 2022 - Performance Report: Argonaut Natural Resources Fund
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Fund Overview | At times, ANRF may consider holding higher levels of cash (max 30%) if valuations are full and it is difficult to find attractive investment opportunities. The Fund does not borrow for investment or any other purposes, but it may short sell securities as part of its portfolio protection strategies. |
Manager Comments | The Argonaut Natural Resources Fund has a track record of 2 years and 4 months and therefore comparison over all market conditions and against its peers is limited. However, the fund has outperformed the ASX 200 Total Return Index since inception in January 2020, providing investors with an annualised return of 57.04% compared with the index's return of 8.32% over the same period. On a calendar year basis, the fund hasn't experienced any negative annual returns in the 2 years and 4 months since its inception. Over the past 12 months, the fund's largest drawdown was -3.38% vs the index's -6.35%, and since inception in January 2020 the fund's largest drawdown was -14.61% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in February 2020 and lasted 3 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by May 2020. The Manager has delivered these returns with 1.77% more volatility than the index, contributing to a Sharpe ratio for performance over the past 12 months of 3.55 and for performance since inception of 2.28. The fund has provided positive monthly returns 80% of the time in rising markets and 50% of the time during periods of market decline, contributing to an up-capture ratio since inception of 201% and a down-capture ratio of -9%. |
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6 May 2022 - Performance Report: AIM Global High Conviction Fund
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Fund Overview | AIM are 'business-first' rather than 'security-first' investors, and see themselves as part owners of the businesses they invest in. AIM look for the following characteristics in the businesses they want to own: - Strong competitive advantages that enable consistently high returns on capital throughout an economic cycle, combined with the ability to reinvest surplus capital at high marginal returns. - A proven ability to generate and grow cash flows, rather than accounting based earnings. - A strong balance sheet and sensible capital structure to reduce the risk of failure when the economic cycle ends or an unexpected crisis occurs. - Honest and shareholder-aligned management teams that understand the principles behind value creation and have a proven track record of capital allocation. They look to buy businesses that meet these criteria at attractive valuations, and then intend to hold them for long periods of time. AIM intend to own between 15 and 25 businesses at any given point. They do not seek to generate returns by constantly having to trade in and out of businesses. Instead, they believe the Fund's long-term return will approximate the underlying economics of the businesses they own. They are bottom-up, fundamental investors. They are cognizant of macro-economic conditions and geo-political risks, however, they do not construct the Fund to take advantage of such events. AIM intend for the portfolio to be between 90% and 100% invested in equities. AIM do not engage in shorting, nor do they use leverage to enhance returns. The Fund's investable universe is global, and AIM look for businesses that have a market capitalisation of at least $7.5bn to guarantee sufficient liquidity to investors. |
Manager Comments | The AIM Global High Conviction Fund has a track record of 2 years and 10 months and therefore comparison over all market conditions and against its peers is limited. However, the fund has outperformed the Global Equity Index since inception in July 2019, providing investors with an annualised return of 10.82% compared with the index's return of 9.57% over the same period. On a calendar year basis, the fund hasn't experienced any negative annual returns in the 2 years and 10 months since its inception. Over the past 12 months, the fund's largest drawdown was -15.5% vs the index's -10.7%, and since inception in July 2019 the fund's largest drawdown was -15.5% vs the index's maximum drawdown over the same period of -13.19%. The fund's maximum drawdown began in January 2022 and has lasted 3 months, reaching its lowest point during April 2022. During this period, the index's maximum drawdown was -10.7%. The Manager has delivered these returns with 1.01% more volatility than the index, contributing to a Sharpe ratio for performance over the past 12 months of 0.2 and for performance since inception of 0.89. The fund has provided positive monthly returns 90% of the time in rising markets and 0% of the time during periods of market decline, contributing to an up-capture ratio since inception of 112% and a down-capture ratio of 105%. |
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6 May 2022 - The Rate Debate - Episode 27
The Rate Debate - Episode 27 Yarra Capital Management 04 May 2022 Is the RBA risking a recession to solve inflation? The RBA hikes rates by 25bps, with more set to come in 2022 as Australia's central bank attempts to keep a grip on inflation. With oil and commodity prices set to continue to be at elevated levels due to Russia's war with Ukraine, could a series of rapid rate hikes rates push the Australian economy into recession?? Tune in to hear Darren and Chris discuss this in episode 27 of The Rate Debate. |
Funds operated by this manager: Yarra Australian Equities Fund, Yarra Emerging Leaders Fund, Yarra Enhanced Income Fund, Yarra Income Plus Fund |
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6 May 2022 - Quality, growth, and value: The keys to buying the world's best (mispriced) businesses
Quality, growth, and value: The keys to buying the world's best (mispriced) businesses Claremont Global March 2022 2022 has seen a marked shift from "growth" to "value." This has seen a resurgence in both bank and oil stocks. The former is expected to see an improvement in profitability, as interest rates rise with tighter monetary policy, whilst the latter are expected to benefit from higher oil prices ― more recently accelerated by the situation in Ukraine. At Claremont Global, we have never owned bank or oil stocks ― nor will we ever. In this article we explain why this is the case, why we think the argument of growth versus value is misplaced ― and why we prefer to think in terms of quality, growth, AND value. Look to own the best businesses On our website, we ask our clients to "Own the world's best businesses." There are two key words in this sentence - own and business. We are not traders or market timers of markets or stocks, looking to profit from short-term price movements. Instead, we look to own some of the world's best businesses for long periods of time, ideally forever and the deferred tax benefits that come with that. This puts us in an effective position to benefit from the growth in their profits over time, and the long-term compounding effect of those profits being re-invested at high rates of return. Why not banks? Our definition of a superior business is one that can grow at a faster rate than nominal gross domestic product (GDP) growth, is blessed with a competitively advantaged product or service and earns higher than average returns on unlevered capital. Banks by their nature are the drivers of economic growth, and as such cannot grow faster than the economy over long periods of time. At best they can expect to grow their deposit bases and profits in-line with nominal GDP growth. Their products are effectively commodities with low switching costs and this is reflected in very low returns on unlevered capital. Over the last five years JP Morgan (widely admired as a best-in-breed bank) has averaged just over 1 per cent return on capital. This has then been levered over 11x to achieve an average 13 per cent return on equity. Source: FactSet At Claremont Global, our businesses consistently earn a high teen return on invested capital, with very low levels of debt ― across the portfolio we are almost net cash. As for growth, we believe our portfolio of great businesses can deliver double-digit profit growth and at a rate that is possibly 2x the growth of the average listed business. Source: Claremont Global In good times, bank profit growth is not much better than the average business, but in bad times their high level of leverage leaves banks very exposed to the vagaries of consumer confidence, liquidity, and regulation. In an extreme situation like the global financial crisis (GFC), banks require large infusions of capital to buttress balance sheets and confidence, whilst regulators limit and/or suspend capital returns to shareholders in the form of buybacks and dividends. If we take the case of Bank of America, the massive equity dilution caused by the GFC, has resulted in the current earnings per share being below the rate it was in 2006! Source: FactSet In summary, banks do not pass three of our investment hurdles: 1) organic growth faster than nominal GDP growth; 2) high returns on unlevered capital; and 3) low financial leverage. The investment case against oil stocks By definition, oil is a commodity with no pricing power and whose consumption over long periods of time is linked to nominal GDP growth. In the main, oil stocks have reasonable returns on capital and generally run strong balance sheets, but their profits are linked to the price of oil - something experience has taught us we have very little expertise in forecasting. Indeed, in 2014 it was a commonly held view amongst "experts" that the oil price would remain above $100 indefinitely ― only to see the price collapse by 70 per cent with the advent of shale oil. Looking at the graph below shows that Exxon is still earning less than it was in 2008. Source: FactSet By contrast, if we look at the earnings progression of our largest holding Visa, the business has consistently grown ahead of nominal GDP growth and its earnings show a steady upward progression, as do returns on capital. Source: FactSet Source: FactSet Whilst we won't argue the possible merit in the short-term trading of bank or oil stocks, these are not businesses we want to own. At some point in the future, we will need to make accurate forecasts about interest rates, economic growth, oil supply and demand, as well as an accurate prediction on the politics and policies of a phasing out of oil in favour of a more environmentally friendly solution to our energy needs. We are happy to admit we don't have the specialist capacity or mental bandwidth to do so. We are only looking for 10-15 mispriced businesses Which brings us to our final point and one much loved by large parts of the financial community - quality growth stocks are expensive and it's time to buy "value". Our view is that large parts of the growth universe are indeed expensive. In 2021, we did see a welcome shake out in some of the more speculative areas of the market, including many concept stocks with limited profits having fallen over 50 per cent. But even after this - there are still large parts of our investment universe with elevated valuations. However, at Claremont Global, we are fortunate that we are only looking for 10-15 businesses who we believe can get our clients to our targeted 8-12 per cent per annum return over the next five years with lower-than-average levels of risk. And that return is simply a function of earnings growth, dividends, fees, and movements in the multiples of the businesses we own. In all our valuation work we use through-the-cycle assumptions, and as such, we did not lower our discount rate in recent years to justify higher valuations. In addition, all our multiple assumptions are based on long-term average multiples (5-10 years) as opposed to recent history. As a result, we are now not hurriedly raising our discount rates or bringing down our multiple assumptions. This discipline kept us out of the speculative areas of the market in 2021 - both in terms of unproven business models, as well as great businesses on our universe with very high PE ratios. To conclude, we believe it is futile to think in terms of growth or value. We like to own businesses that will both deliver growth AND value. As usual, Warren Buffett puts it better than we can: Most analysts feel they must choose between two approaches customarily thought to be in opposition: "value" and "growth." Indeed, many investment professionals see any mixing of the two terms as a form of intellectual cross-dressing. We view that as fuzzy thinking (in which, it must be confessed, I myself engaged some years ago). In our opinion, the two approaches are joined at the hip: growth is always a component in the calculation of value. In addition, we think the very term "value investing" is redundant. What is "investing" if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value - in the hope that it can soon be sold for a still-higher price - should be labelled speculation (which is neither illegal, immoral nor - in our view - financially fattening). In the short-term, we know it is quite possible that not owning bank or oil stocks will lead to temporary under-performance versus an index. However, over a longer time frame we think eschewing these industries ― in favour of owning faster growing and more predictable earnings streams ― is going to give our clients a higher probability of achieving our targeted return of 8-12 per cent per annum. Most importantly, this will be within the confines of a strong balance sheet and commensurate with lower levels of business risk. This lower level of business risk allows us to sleep well at night (even in the very uncertain climate) and most importantly, allows our clients to do the same. Author: Bob Desmond, Head of Claremont Global & Portfolio Manager Funds operated by this manager: |
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5 May 2022 - Opportunity and risk in small and mid-cap equities
Opportunity and risk in small and mid-cap equities abrdn April 2022 The small and mid-cap universe offers the potential to invest in tomorrow's large companies today. In this article, we'll look at ways to navigate this huge global market while balancing the opportunities and risks. Given a backdrop of conflict in Ukraine and a lingering pandemic, investors face a lot of uncertainty at the moment. Due to concerns about inflation, interest rate rises and tightening monetary policy in early 2022, investors in small and mid-cap equities have been favouring "value" stocks with lower price-earnings (P/E) valuations over higher P/E "quality" companies recently. We also saw small and mid-caps underperform large caps in 2021, based on the (not always accurate) perception that big equals safer.
All this means there is now an opportunity to invest in quality small and mid-cap companies with the potential to weather economic cycles. These companies are available at compelling valuations. But in today's unpredictable environment, is it possible for investors to buy tomorrow's potential large caps without taking high risks? Narrowing the search The global small and mid-cap equity investable universe is vast. Two thirds of the world's listed corporates are small or mid-cap companies. That's 7850 stocks.1 Very few analysts cover the sector, which means experienced investors can exploit market inefficiencies. With such a huge opportunity set, where do investors begin to look? At abrdn our starting point since the late 90s has been our stock screening matrix. Our information feeds measure the quality, growth, momentum and valuation factors that our continuous backtesting has found to be predictive of share price performance. The above illustration shows the select companies we look for; those with strong quality, growth and momentum characteristics. Our screening matrix highlights a shortlist of companies which look attractive from a quantitative perspective. Small and mid-cap specialists carry out rigorous fundamental research on these top-scoring companies, including meeting with senior management, financial analysis, an assessment of ESG risks and opportunities, as well as a peer review process. The result is a 'best ideas list' which comprises of regional analysts' highest conviction names. Each list typically contains 15-20 stocks. Our portfolios have high weights to these strongest conviction companies, while ensuring a sufficient level of diversification as well as clear, deliberate and persistent style tilts to quality, growth and momentum. Factors in focus We've talked about the factors that we believe are important when selecting companies with the potential to enlarge their market capitalisation over the long term. But what are the key indicators of these three characteristics? Growth In our view, it's important to look for companies with profitable, sustainable, growth. Small and mid-cap businesses with supportive end markets, as well as the ability to gain market share and expand profit margins, have the greatest potential to become tomorrow's large caps. Momentum We also look for signs that companies are exhibiting momentum, such as seeing upward earnings revisions and a history of consistently beating earnings forecasts. Growth and momentum characteristics have the potential to be sustained for many years, which partly explains why small caps have outperformed large caps over the long term.2 Quality The graphic below shows what we believe are the key indicators of company quality: Measures such as balance sheet strength, management pedigree and sustainable competitive advantage allow companies to successfully navigate changing economic cycles. Of course, investing in quality is also about avoiding loss-making, blue sky or highly leveraged businesses, as well as those with extremely cyclical earnings or a history of dividend cuts. Because of this, we believe, 'quality' companies have the potential to deliver higher returns over the long term with less volatility. This results in a more favourable risk-return profile. ESG - a key indicator of quality One indicator shown above is ESG (environmental, social and governance). For us, ESG factors are financially material and can affect any company's performance both positively and negatively. A strong record on ESG issues is a key sign of company quality and can potentially help to reduce risk. Therefore, in our view, understanding ESG risks and opportunities should be an intrinsic part of any small and mid-cap research process, alongside other financial metrics. We also think informed and constructive engagement with company leaders can help investment managers to encourage and share positive ESG practices - potentially protecting and enhancing the value of investments for years to come. Well-resourced investment managers have the confidence to rely on their own ESG research, investing in companies which meet their own criteria, even when not covered by external ratings agencies. You can read more about The Importance of ESG in Small Cap Investing in our recent article. Risk and opportunity Looking forward, the outlook for higher interest rates, potentially sustained high inflation, and a lower growth environment suggest uncertain times are ahead. Companies selected using a quality, growth and momentum process combined with ESG analysis are potentially well-placed to weather economic downturns. Far from being dependent on externally-driven cycles, these companies are likely to expand in a predictable, sustainable way. They are also more likely to be market leaders able to pass on inflationary costs in the form of higher prices, as well as having strong margins and robust balance sheets. Furthermore, portfolios constructed in this way are more likely to be diversified across products, markets and geographies. We also believe that in a changing world, smaller, nimble, well managed companies that can pivot their businesses more quickly than mega caps are well placed to take advantage of evolving opportunities. Final thoughts Many high quality small and mid-cap companies with the potential to expand and grow are currently available at attractive valuations. In today's uncertain world, we believe a robust, repeatable investment process focusing on quality, growth and momentum can help investors select the large cap leaders of the future with favourable risk-return profiles. Author: Alexandra Popa, Macro ESG Research, Abrdn Research Institute |
Funds operated by this manager: Aberdeen Standard Actively Hedged International Equities Fund, Aberdeen Standard Asian Opportunities Fund, Aberdeen Standard Australian Small Companies Fund, Aberdeen Standard Emerging Opportunities Fund, Aberdeen Standard Ex-20 Australian Equities Fund (Class A), Aberdeen Standard Focused Sustainable Australian Equity Fund, Aberdeen Standard Fully Hedged International Equities Fund, Aberdeen Standard Global Absolute Return Strategies Fund, Aberdeen Standard Global Corporate Bond Fund, Aberdeen Standard International Equity Fund , Aberdeen Standard Life Absolute Return Global Bond Strategies Fund, Aberdeen Standard Multi Asset Real Return Fund, Aberdeen Standard Multi-Asset Income Fund
1 Source MSCI 28 February 2022 2 Source: Morningstar, Total Return, GBP, 01 January 2000 to 31 March 2022 |
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4 May 2022 - Update on Q1 2022 Webinar Recording
Update on Q1 2022 Webinar Recording Laureola Advisors April 2022 On Wednesday, April 27, Laureola Advisors shared an update on Q1 2022. Request for the recording now! ABOUT LAUREOLA ADVISORS The best feature of the asset class is the genuine non-correlation with stocks, bonds, real estate, or hedge funds. Life Settlement investors will make money when others can't. Like many asset classes, Life Settlements provides experienced and competent boutique managers like Laureola with significant advantages over larger institutional players. In Life Settlements, the boutique manager can identify and close more opportunities in a cost effective manner, can move quickly when necessary, and can instantly adapt when opportunities dry up in one segment but appear in another. Larger investors are restricted not only by their size and natural inertia, but by self-imposed rules and criteria, which are typically designed by committees. The Laureola Advisors team has transacted over $1 billion (US dollars) in face value of life insurance policies. Funds operated by this manager: |
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4 May 2022 - Are the winners today also the winners of tomorrow?
Are the winners today also the winners of tomorrow? Insync Fund Managers April 2022 March witnessed the third month of the fear-based swing to stocks perceived as short-term winners from the Ukraine invasion and Covid related supply chain issues. Think: materials and economically sensitive stocks. These same events also precipitated a knee-jerk move away from stocks viewed as 'growth' related at the same time. The ensuing impact on inflation from both of the above events added to fear-based motivations. Consider this: Most stocks receiving current price lifts (commodities, energy & banking) tend to possess various combinations of low PEs, a history of business underperformance, low returns on invested capital, high Credit Default Swap prices, low sales growth, and lesser margin control. Few successful fund managers have enriched investors built around these factors. In the last few months these stocks outperformed by a large margin those that are; highly profitable, with strong margins and price control, long run earnings growth, lower debt, and not as reliant on macro factors (like inflation). It's interesting to note that many leading "value-managers', have also posted negative returns. Banking, industrial cyclicals, and housing related stocks generally trade on low P/E ratios, yet they too had their prices weaken recently. This is principally due to the 'supply side' commodity price shock at a time when macro-economic growth is weakening. This is not the environment for a rising tide to lifting all value stocks. In our minds, this swing represents the same but opposing side of the unjustifiable prices that many tech/disruption stocks enjoyed until recently. Neither group are worthy of serious, risk aware and longer-term investment. It's why we invest in companies that can sustainably deliver strong above average Earnings Growth. Their stock prices tend to always follow (Barr the odd event-based, short-lived exception like the one we are experiencing now). Are the businesses enjoying stock price rises today also the winners of tomorrow? Lately we are all experiencing one tectonic event after the next. Foundations of the political and economic framework that have dominated much of the world since the 1980s are now being challenged; the impacts on globalisation, the questioning of the USD central role, and previously deeply embedded structural relationships in the energy markets to name a few. Regular readers of our newsletter know that our approach is far less dependent than our peers are on these issues, including inflation and interest rates. The jury is still out on whether inflation will be a temporary or a longer-term phenomenon. Covid and the tragic invasion of Ukraine have created significant commodity, energy, and labour mobility pressures. Companies that:
These are the required factors for a business to continue delivering healthy returns in real terms and are thus the same attributes Insync seeks. Most companies are not able to do this. Those companies possessing the most levers to pull going into an inflationary period are also the most likely to protect and even thrive for their investors. There will likely be tougher times ahead, quality growth investors should find themselves better positioned than most to weather the storm and come out substantially ahead. Why earnings power is crucial A shy, humble investor living on a suburban street in a small mid-western US city is often cited for his quips.
Over shorter periods sentiment in markets can shift wildly depending on the narrative of the day. This is driven by perceptions of investors trying to gauge where we are in the economic cycle, the path of inflation and interest rates, the impact of a geopolitical crisis, and what style of investing will be best equipped for the future. These are impossible to predict with any degree of certainty or to do so consistently. The one thing that is more certain over time is that in the long-term, share prices follow the consistent growth in the earnings of a business. We know that the most profitable companies remain profitable even ten years later fuelled by the enduring, large megatrends. Megatrends are so predictable you can set your watch by them. This is whether it is the rising importance of the Gen Z'ers, the acceleration in the number of people aged 70+, GDP+ growth in spending on skin and beauty, or the insatiable desire to spend on experiences. A portfolio of the most profitable companies tied to megatrends provides consistency in earnings leading to strong stock price returns. They are also mostly impervious to interest rate settings, the state of the economy or current commodity prices. 3 portfolio examples of why Earnings Growth is good for investors The evidence shows it all. Here are 3 companies in our portfolio. The coloured line in each graph is the path of earnings over the past 10 years. The white line is the share price performance. Observe the strong correlation between the earnings growth and share price performance. From time to time the two lines deviate based on an 'event', as is the case now. Obviously, present prices present an outstanding opportunity to invest. These highly profitable businesses benefitting from Insync's identified megatrends have become even more attractive due to recent price falls. This is because their ongoing and established earnings power remains intact. Such excellent buying opportunities do not often present themselves. The 'coiled Spring' phenomenon continues to gain energy. Funds operated by this manager: Insync Global Capital Aware Fund, Insync Global Quality Equity Fund Disclaimer |
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3 May 2022 - Performance Report: Laureola Australia Feeder Fund
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Fund Overview | Life Settlements are resold life insurance policies and can be thought of as a form of finance extended to an individual backed by the person's life insurance policy. This financing is repaid upon maturity by collecting the death benefit from the insurance company. Risk mitigation measures implemented by Laureola include science-driven due diligence of policies, active monitoring of insured through a vertically integrated operation, and investor aligned fund design. |
Manager Comments | The Laureola Master Fund has a track record of 8 years and 11 months and has outperformed the Bloomberg AusBond Composite 0+ Yr Index since inception in May 2013, providing investors with an annualised return of 14.48% compared with the index's return of 2.9% over the same period. On a calendar year basis, the fund hasn't experienced any negative annual returns in the 8 years and 11 months since its inception. Over the past 12 months, the fund's largest drawdown was -2.39% vs the index's -8.66%, and since inception in May 2013 the fund's largest drawdown was -4.9% vs the index's maximum drawdown over the same period of -8.94%. The fund's maximum drawdown began in December 2018 and lasted 10 months, reaching its lowest point during December 2018. The fund had completely recovered its losses by October 2019. During this period, the index's maximum drawdown was -0.98%. The Manager has delivered these returns with 1.87% more volatility than the index, contributing to a Sharpe ratio which has consistently remained above 1 over the past five years and which currently sits at 2.3 since inception. The fund has provided positive monthly returns 97% of the time in rising markets and 94% of the time during periods of market decline, contributing to an up-capture ratio since inception of 160% and a down-capture ratio of -204%. |
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3 May 2022 - Twitter bids, social media monetisation and control in volatile markets
Twitter bids, social media monetisation and control in volatile markets Forager Funds Management 02 May 2021
In this episode, CIO Steve Johnson is joined by whisky-naysayer (and Senior Analyst) Chloe Stokes to discuss the bid for Twitter, social media monetisation, and control in volatile markets. Chloe also shares her experience as a younger investor and reveals the stocks (and burgers) currently on her watchlist. "As shareholders, we can't help but be disappointed. We bought [Twitter] because we thought the platform had a lot of potential," Chloe tells Steve. "It's obvious that we think it's worth more than the bid, because we held it through periods where it was trading much higher and still thought it was worth more than those higher prices. So, we are definitely not happy from a price perspective, but on the other hand, we can't stop talking about it." Timestamps 02.30 Start |
Funds operated by this manager: Forager Australian Shares Fund (ASX: FOR), Forager International Shares Fund |