July Report

The Fund fell 1.8% in July.

Positive news was reported by Australian-listed molecular diagnostic company Genetic Signatures, which was up 16%. The company has suffered delays in commercializing its lead test for enteric protozoans (ie gut bugs) but in its quarterly financial release highlighted it will file for approval with the US FDA in August. Approval is likely to take between three to nine months. There is a high unmet need for the product, which the company conservatively forecasts could generate USD40mln per annum of revenue.

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.

US hospital operator Tenet, down 9%, reported excellent results for the June quarter as it delivered on high surgical volume expectations due to joint replacements and raised guidance for the full year. Peers however reported more moderate case growth, which raised questions about the sustainability of elective surgery growth. We remain comfortable owning the stock given the improving contract nurse labour costs and growing procedure volumes at its ambulatory day care centres, which offer considerable savings over hospitals.

Spotify, down 8%, also gave up gains from the prior month when it was boosted by several brokers upgrading their earnings and price targets. The result delivered positively on many fronts, with monthly active users, gross margin, and advertising revenue exceeding expectations, although average revenue per user (ARPU) was below expectations due to a large number of customer additions in emerging markets. As recent subscription price increases flow through to Q3 and Q4 revenue, concerns over the ARPU decline in Q2 should dissipate. Revenue guidance for Q3 appears conservative. We believe the market is underestimating Spotify’s medium-term earnings power.

Swiss listed German solar cell and module producer Meyer Burger fell 11% during the month despite announcing a very large capacity increase and subsidies from both the European and US governments. Short term earnings are being impacted with full year guidance being withdrawn, due to a glut of solar modules globally. Chinese companies continue to increase supply, while rising interest rates make panels less affordable for European consumers. Recently module prices have started to rise again although it is unclear how sustained this will be. We believe Western governments will ensure a profitable local supply chain is built for strategic purposes and subsidies will increase accordingly. Meyer Burger is one of the few Western companies with differentiated technology and established production expertise that can benefit from this largesse.