June Report

The Fund had two notable outperformers this month. Overall the Fund rose 0.2% for the month of June.

• Low-cost Titanium producer IperionX rose 20% after partnering with Ford Motor Co to develop titanium auto parts for high-performance and racing divisions.
• US hospital operator Tenet Healthcare rose 11% as UnitedHealth Group expected higher claim costs due to a return in deferred elective surgeries and increased hospital utilization.
• US optical communications company Ciena fell 12% due to telcos delaying order deliveries, but the strong backlog positions the company for future growth. German medical and isotope producer Eckert and Ziegler fell 8% on little news.

Top Holdings (alphabetically)

Eckert & Ziegler Strahlen- und

Germany

Health Care

Eckert & Ziegler AG manufactures equipment for the pharmaceutical industry. The Company produces low-level radiation sources used to treat cancer, heart and other diseases, and in equipment used to calibrate gamma cameras and positron emission computer tomographs. Eckert & Ziegler also develops cancer drugs. The Company markets its products worldwide.

Immutep Ltd ADR

United States

Health Care

Immutep Limited operates as a biotechnology company. The Company focuses on developing novel immunotherapy treatments for cancer and autoimmune disease. Immutep offers its services worldwide.

IperionX Ltd

United States

Materials

IperionX Limited focuses on sustainable mineral and material supply chains. The Company develops low carbon titanium for advanced industries including space, aerospace, electric vehicles, and 3D printing. IperionX serves customers worldwide.

Telix Pharmaceuticals Ltd

Australia

Health Care

Telix Pharmaceuticals Limited operates as a biotechnology company. The Company develops and commercializes molecularly-targeted radiation therapy for the treatment of prostate, renal, and brain cancer. Telix Pharmaceuticals serves patients worldwide.

Tenet Healthcare Corp

United States

Health Care

Tenet Healthcare Corporation, through its subsidiaries, owns or operates general hospitals and related health care facilities serving communities in the United States. The Company operates rehabilitation hospitals, specialty hospitals, long-term care facilities, psychiatric facilities, and medical office buildings near its general hospitals, as well as ancillary health care businesses.

Low-cost Titanium metal producer IperionX rose 20% after announcing a collaboration with Ford Motor Co to develop titanium auto parts for its high performance and racing division. Titanium has superior strength to weight ratios compared to other metals as well as corrosion resistance. Using IperionX’s process makes titanium recyclable at the end of life, which cannot be done with other titanium products. We expect further customer announcements in the coming months ahead of increased volume production at the company’s new facility in North Carolina early next year.

US hospital operator Tenet Healthcare rose 11% after UnitedHealth Group, the largest health insurer in the US, said that claim costs would be higher than anticipated due to elective surgeries and higher hospital utilisation. This signals the return of deferred elective procedures from the height of the pandemic, with specific callouts to unusual demand for joint replacements, all of which should benefit Tenet.

US optical communications equipment company Ciena fell 12% last month after reporting disappointing results as telcos push out order deliveries of equipment. The company has an over twelve-month order backlog, putting it in a strong position to ride out this inventory correction. We believe the underlying demand for data transmission is still strong and order growth will continue after several quarters of backlog digestion.

German medical and isotope producer Eckert and Ziegler fell 8% on little news. We recently spent several days with the management of the Fund’s largest holding radiopharmaceutical producer Telix in the US as well as attending the world’s largest nuclear medicine conference SNMMI in Chicago. We came away with the conviction that the radiopharmaceutical industry will continue to perform very strongly over the coming years with an expected compound annual growth rate of more than 20%. Eckert & Ziegler is well positioned to benefit from this trend, supplying both medical isotopes and developing its own radiopharmaceutical and diagnostic products. The company has built strategic stockpiles of various high purity metals that are required to produce medical isotopes in the future. These will likely be in short supply if expected demand materializes, particularly for Lutecium and Actinium use in prostate cancer therapeutics.