
News

7 Nov 2024 - Debunking a myth about fossil fuels and sustainable fixed interest
Debunking a myth about fossil fuels and sustainable fixed interest Pendal October 2024 |
Exclusion of fossil fuels presents minimal challenges for sustainable bonds compared to other asset classes, writes Pendal head of credit and sustainable strategies, GEORGE BISHAY SUSTAINABLE funds typically screen out industries such as fossil fuels, tobacco, weapons, alcohol, gaming, pornography and uranium mining. This is generally with a revenue threshold, where companies with a certain level of revenue linked to a particular activity are screened out. Different asset classes have different potential exposures to fossil fuels. Fossil fuel companies typically make up a large part of equities indices (about 15 per cent of the ASX 300 in July 2024). By contrast, issuers involved in fossil fuel extraction, exploration or refining are a small component of the Australian fixed-income benchmark. Chart 1 below shows these issuers make up only about 0.1 per cent of the Australian fixed income benchmark, according to the rules applied to Pendal Sustainable Australian Fixed Interest Fund (see Chart 1 footnote below).
![]() However, there can be variations in the exclusions of different funds.For example, in Australian equities a fund's revenue threshold can dictate whether a company such as BHP (at about 9% weight in the ASX300 index) is included or not. BHP's revenue includes coal mining. Other iron ore miners such as Fortescue Metals and Rio Tinto are not typically excluded. Notwithstanding these variations in exclusions, active performance in the average sustainable equity fund is influenced by changes in oil prices. As a result of these differing levels of benchmark exposure, sustainable fixed-income portfolios in Australia are less sensitive to the movements in oil prices than equity counterparts. What drives the active performance of Pendal Sustainable Fixed Interest Fund?Active credit management is the main driver of excess returns in Pendal Sustainable Australian Fixed Interest Fund. The green circles in the chart below highlight periods when the manager's active de-risking and re-risking of its credit exposures process led to strong outperformance. These returns are driven by active management and are delivered despite rising oil markets. The black circle highlights a period of rising inflation concerns due to Covid supply chain issues driving goods inflation and central bank hiking fears. This led to a risk-off event in credit markets which saw most active fixed-income funds underperform the benchmark.
![]() Given the volatility of oil markets, Pendal Sustainable Australian Fixed Interest Fund has delivered consistent returns, outperforming its benchmark in 75%1 of months since inception to July 2024. The chart below illustrates the number of excess return months under different buckets of excess returns.
![]() Social and environmental benefit + portfolio diversification benefitMany sustainable fixed-income investors are attracted to ESG-labelled bonds which aim to address green, social and sustainability issues. The proceeds of these bonds are usually ring-fenced for specific environmental or social projects to support climate stability and/or the underserved in society. The Australian ESG labelled fixed-income market was valued at some $A124 billion in August 2024, constituting 7.6% of the total Australian fixed-income benchmark. The ESG-labelled bond market offers sustainable Australian fixed interest managers exposure to an additional opportunity set beyond traditional fixed income - environmental and social projects across varying sectors, credit qualities and tenors. These labelled bonds can complement an overall fixed-income portfolio, bringing added diversification benefits. The credit spread on these bonds may not directly follow the credit spread on an equivalent vanilla bond issued by the same issuer. This arises from the different technical supply and demand factors affecting these types of bonds. These bonds are desirable and often in greater demand than vanilla counterpart bonds. The Australian fixed interest market has ESG labelled bonds in 13 of its 14 sub-sectors (transport is the only missing sector), providing investors with the ability to diversify across numerous sectors. In August 2024, the Pendal Sustainable Australian Fixed Interest fund held more than 66% in ESG-labelled securities. Sustainable fixed income as part of your core fixed income allocationUnlike sustainable equities, which may underperform during periods of rising oil prices, Australian sustainable fixed-income exhibits minimal sensitivity to oil markets or any other screened activities. This differentiation allows investors to integrate sustainable fixed income into their overall core fixed interest allocation with minimal additional benchmark risk. By incorporating Australian sustainable fixed income alongside other traditional assets, investors can achieve a robust portfolio while also supporting climate stability and/or the underserved in society. Author: George Bishay |
Funds operated by this manager: Pendal Global Select Fund - Class R, Pendal Horizon Sustainable Australian Share Fund, Pendal MicroCap Opportunities Fund, Pendal Multi-Asset Target Return Fund, Pendal Sustainable Australian Fixed Interest Fund - Class R, Pendal Sustainable Australian Share Fund, Regnan Credit Impact Trust Fund, Regnan Global Equity Impact Solutions Fund - Class R |
1 Pendal Sustainable Australian Fixed Interest outperformed the Bloomberg AusBond Composite 0+yr in 72 of 96 months from inception (Aug-16) to July 2024, gross of fees. This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at December 8, 2021. PFSL is the responsible entity and issuer of units in the Pendal Multi-Asset Target Return Fund (Fund) ARSN: 623 987 968. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient's personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com |

6 Nov 2024 - Anticipating the Future of Luxury
Anticipating the Future of Luxury Insync Fund Managers October 2024 Investing is more than data; it requires anticipating future trends. This is why relying on past performance is often risky. Generational shifts, rising geopolitical tensions, and evolving consumer behaviours demand excellence in trend spotting. Luxury goods, where China's rising affluent class is undergoing significant changes in spending preferences is a case in point. Whilst luxury has historically been a secular growth story, we believe that more nuanced factors are at play, making active stock picking essential. China's economic challenges have slowed luxury market growth. A notable shift is the rise of "quiet luxury"-- discreet, minimalist products reflecting a reluctance to display wealth. A recent survey revealed that 24.8% of Chinese consumers find Western brands less desirable, with younger generations increasingly favouring niche, culturally aligned local brands. Their younger demographic is now prioritizing experiences over luxury goods. Spending on travel, concerts, and cultural events are taking precedence. Whilst Luxury's long-term growth is supported by global affluence, future affluent consumer's evolving preferences make investing here more complex. China accounts for 23% of global luxury sales today, and 30%-40% of sales by 2030, so understanding their mindset is crucial in identifying the winners. Funds operated by this manager: Insync Global Capital Aware Fund, Insync Global Quality Equity Fund Disclaimer |

5 Nov 2024 - Quarterly State of Trend report - Q3 2024
Quarterly State of Trend report - Q3 2024 East Coast Capital Management October 2024 In this update, we present the quarterly State of Trend report for Q3, 2024. Our report covers the performance of Trend Following systems compared with traditional investments such as the S&P/ASX 200 Total Return index, and the Australia "60/40" portfolio. Trend Following provides exposure to a diverse pool of underlying instruments, and implements trading strategies systematically and without emotional biases. Challenger quarter for most trend following systems Although the majority of trend following systems were down for Q3 2024, ECCM's Systematic Trend Fund demonstrated strong positive divergence. Major equity and bond markets delivered positive returns for the quarter as several Central Banks commenced rate cuts. Commodity markets also performed strongly, particularly in agricultural sectors.
Featured chart - Rubber
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4 Nov 2024 - New Funds on Fundmonitors.com
New Funds on FundMonitors.com |
Below are some of the funds we've recently added to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research, platform availability, and news & insights. |
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1 Nov 2024 - Australian Secure Capital Fund - Market Update
Australian Secure Capital Fund - Market Update Australian Secure Capital Fund October 2024 For the 20th consecutive month, headline national home values increased by a modest 0.4%, signalling that the strong momentum is beginning to leave the market. This is demonstrated by housing values rising just 1% for the September quarter, the lowest over a rolling three-month period since March 2023. Perth continues to be the strongest performer, growing by 1.6% for the month, followed by Adelaide and Brisbane with increases of 1.3% and 0.9%, respectively. Sydney and Darwin were the only other markets to see increases, rising by 0.2% and 0.1% for the month, while Melbourne, Canberra, and Hobart all saw housing values ease, with decreases of 0.1%, 0.3%, and 0.4%, respectively. Property Values as at 30th of September 2024 Median Dwelling Values as at 30th of September 2024Quick InsightsRate hold slows buyers, but investor confidence remains strongProfits from home sales nationwide climbed to a record high of $285,000 on average in the June quarter. The RBA's decision to keep interest rates steady has left many homebuyers waiting, as borrowing power remains limited. While a future rate cut is anticipated, it won't significantly boost demand until it happens. Meanwhile, investors are showing renewed interest, particularly in Melbourne, where the market is stabilising despite an increase in listings. A rate cut could lead to a faster recovery than expected. Source: Australian Financial Review
Australia's housing market soars to record $11 trillionAustralia's housing market hit a record $11 trillion in September, with home values rising 6.7% over the past year, adding $900 billion in wealth. Despite higher interest rates, new listings and strong investor activity continue to drive the market. Over the past decade, house prices surged by 85.9% nationwide, with suburbs in Sydney, Brisbane, and Melbourne leading long-term growth. While price growth is expected to slow, strong demand and new housing developments will continue to support the market. Source: Australian Financial Review Author: Filippo Sciacca, Director - Investor Relations, Asset Management and Compliance Funds operated by this manager: ASCF High Yield Fund, ASCF Premium Capital Fund, ASCF Select Income Fund |

31 Oct 2024 - Go beyond the point of low returns

30 Oct 2024 - Stock Story: Medibank
Stock Story: Medibank Airlie Funds Management October 2024 |
Playing a pivotal role in Australia's health transition. The Medibank and ahm private health insurance brands serve over 4.2m customers and play a vital role in funding medical care in Australia. In the most recent financial year, Medibank paid out $6.3bn in health insurance claims, taking a significant burden off the public healthcare system. Yet recently, the sector has come under fire from both the government and hospitals accused of making too much profit. In this article, we explore this regulatory tension and why we think Medibank looks an attractive investment opportunity. Private hospital profits affected by new models of careThere is no doubt the past few years have been challenging for hospitals - labour shortages have affected service levels and inflation has been rampant. Private hospital operators have responded by launching a campaign against the health insurers and pressuring the government for a bailout. While additional payments or a tax may provide short-term relief to hospitals, they do not solve the structural issues facing the sector and ultimately would drive up the cost of healthcare and premiums for millions of Australians. To build a sustainable private healthcare system, all participants must work together to find efficiencies and drive down the overall cost of care. Medibank is doing its part to lower costs by investing in new models of care away from overnight stays in expensive acute care hospitals to virtual, short-stay hospitals and home care. Without this transition, Medibank estimates the government will need to spend 50% more on healthcare as a percentage of GDP in forty years. While this transition does come at the expense of hospitals that typically earn more for longer in-hospital stays, it is beneficial for the wider healthcare system. Higher hospital costs would simply translate to higher premiums, which are likely to push more members out of private health insurance and place further strain on an already stretched public healthcare system. It is for this reason the Federal Health Minister following a review has conceded, "There's no silver bullet from Canberra or funding solution from taxpayers to deal with what are essentially private pressures in the system". Ultimately, it is not the government's job to prop up unprofitable business models and in some cases it is healthy for some private hospitals to shut where there is overcapacity in the system. Has Medibank profited at the expense of hospitals? Medibank has stuck to its promise not to profit from the pandemic and returned a total of $1.46bn in givebacks to customers for permanent claims savings due to COVID-19. This is evident in the chart below which shows Medibank's health insurance gross profit margin is still below FY19 levels.
Source: Company filings
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29 Oct 2024 - Magellan Global Quarterly Update
Magellan Global Quarterly Update Magellan Asset Management October 2024 |
Arvid Streimann, Nikki Thomas and Alan Pullen discuss key market themes and how the global strategy is positioned to capitalise on emerging opportunities, whilst monitoring the risks. Arvid also discusses the potential market impacts of the upcoming US election based on various possible outcomes. |
Funds operated by this manager: Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged), MFG Core Infrastructure Fund, Magellan Core ESG Fund Important Information: Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 ('Magellan') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to a Magellan financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material. Any third party trademarks contained herein are the property of their respective owners and Magellan claims no ownership in, nor any affiliation with, such trademarks. Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan. |


28 Oct 2024 - New Funds on Fundmonitors.com
New Funds on FundMonitors.com |
Below are some of the funds we've recently added to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research, platform availability, and news & insights. |
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25 Oct 2024 - Why Australians Are Embracing ETFs
Why Australians Are Embracing ETFs Janus Henderson Investors September 2024 From liquidity to diversification, ETFs provide a valuable opportunity for both newcomers and seasoned investors. Discover five reasons why ETFs are becoming increasingly popular among Australian investors. Exchange Traded Funds (ETFs) are pooled investment securities that trade on exchanges like the ASX (Australian Securities Exchange) and are becoming increasingly popular among investors in Australia and around the world. These funds offer flexibility, cost-effectiveness and broad market exposure, making them an attractive option for investors of all levels of experience. Here are five reasons why investors are increasingly drawn to ETFs: 1. ETFs are liquidLiquidity is one of the most important features investors are seeking in a fund. Investors are attracted to ETFs because they generally have high liquidity, meaning they are usually easier to buy and sell compared with some other funds and asset classes. An indicator as to whether an ETF is highly liquid is its bid-ask spread, or the difference between what price buyers are prepared to pay and what price sellers are prepared to accept. Generally a lower spread indicates higher liquidity (i.e. greater demand to buy and sell). As a unit holder in an ETF, it is important to note that the fund manager owns the underlying shares. On rare occasions an ETF can have liquidity issues when the manager cannot sell the underlying shares or doesn't believe there's fair value in the event of selling its shares. 2. DiversificationETFs also provide built-in diversification due to the way the product is designed. You have probably heard the old saying 'don't put all your eggs in one basket.' An ETF automatically avoids this by allocating your holdings across several assets, depending on the type of ETF. For those who are newer to investment markets, ETFs can help simplify the investment process by bundling assets such as shares or bonds into a single fund, offering investors instant diversification. For example, an ETF that tracks the ASX200 includes shares from 200 different companies that are listed on the Australian exchange. This reduces the impact of any single company's poor performance, helping new investors manage risk more effectively. In some cases, investors can buy an ETF that will cover thousands of different companies across the world, while others will be more asset or sector specific. 3. Demystify investing for new investorsInvesting in managed funds can seem overwhelming to beginners, with intricate forms and fee structures and high minimum investments that can be confusing for those without a strong financial background. However, investing in an ETF is like investing in ordinary shares. No complex forms or convoluted fee structures allows an investor at any level to easily access sharemarkets. 4. Low costAdditionally, ETFs can be cost effective. Some passive ETFs have lower fees compared with managed funds and can be bought and sold on major stock exchanges throughout the trading day, just like individual stocks. The downside to these passive ETFs is they will produce the average return for the market. An active ETF, which might have a higher fee, can outperform its benchmark, depending on the skills of the fund manager. This accessibility and affordability make ETFs an attractive option for new investors looking to start investing without a significant upfront cost. Although costs will vary depending on the structure and type of ETF, if you are looking to understand the fees on a particular ETF, you can read the product disclosure statement which will outline all the relevant information. 5. Access benefits of global marketsETFs also make it easier for investors to access numerous types of investment markets. Whether it is investing in international share markets, bonds, currencies, commodities or even crypto assets, there is an ETF that will suit your needs. The aim of buying ETFs across various parts of the world is it can be a useful diversification tool because you are reducing the impact of market volatility in any single location. The Australian market represents only a small portion of the global market capitalisation (less than 2%) and the Australian market is also heavily concentrated in financials and materials sectors, which may limit your overall diversification and potential growth opportunities. Investing globally helps spread your risk across different economies and regions, reducing the impact of any single country's market fluctuations on your portfolio. ETFs are also run by professional investment managers, with each typically giving investors the type of exposures they would otherwise struggle to find themselves. Janus Henderson Active ETFs provide investors with access to the expertise of our professional investment managers globally, with a deep-rooted research culture underpinned by our 90-year track record of investing. An example of how ETFs can provide greater access for investors can be found when buying globally diversified bonds. Traditionally, these have been reserved for more affluent Australians, with the minimum buy in usually starting out at $500,000. But with ETFs, you get access to the same fund managers, but at a much lower starting point. |
Funds operated by this manager: Janus Henderson Australian Fixed Interest Fund, Janus Henderson Australian Fixed Interest Fund - Institutional, Janus Henderson Cash Fund - Institutional, Janus Henderson Conservative Fixed Interest Fund, Janus Henderson Conservative Fixed Interest Fund - Institutional, Janus Henderson Diversified Credit Fund, Janus Henderson Global Equity Income Fund, Janus Henderson Global Multi-Strategy Fund, Janus Henderson Global Natural Resources Fund, Janus Henderson Tactical Income Fund All opinions and estimates in this information are subject to change without notice and are the views of the author at the time of publication. Janus Henderson is not under any obligation to update this information to the extent that it is or becomes out of date or incorrect. The information herein shall not in any way constitute advice or an invitation to invest. It is solely for information purposes and subject to change without notice. This information does not purport to be a comprehensive statement or description of any markets or securities referred to within. Any references to individual securities do not constitute a securities recommendation. Past performance is not indicative of future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Whilst Janus Henderson believe that the information is correct at the date of publication, no warranty or representation is given to this effect and no responsibility can be accepted by Janus Henderson to any end users for any action taken on the basis of this information. |