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Axiom International Fund

An option of HEDGED or UNHEDGED portfolios of dynamic and growing companies undergoing positive change, within a robust ethical framework.

December 2024 - Monthly REPORT

December Report

SUMMARY

  • The Fund returned 3.9% in December, while the benchmark delivered 2.7%.
  • Global equities were generally weaker in local currency terms during December, as fears of persistent inflation raised doubts amongst investors that interest rates would fall as rapidly as had been previously expected.
  • US dollar strength and Australian dollar weakness combined to deliver positive market and fund returns in Australian dollar terms.

PORTFOLIO

Top Holdings (alphabetically)

Alphabet Inc. Class A
United States
Communication Services
Alphabet Inc. operates as a holding company. The Company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.
Amazon.com, Inc.
United States
Consumer Discretionary
Amazon.com, Inc. is an online retailer that offers a wide range of products. The Company products include books, music, computers, electronics and numerous other products. Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers. Amazon also operates a cloud platform offering services globally.
Apple Inc.
United States
Information Technology
Apple Inc. designs, manufactures, and markets personal computers and related personal computing and mobile communication devices along with a variety of related software, services, peripherals, and networking solutions. Apple sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers.
Hitachi,Ltd.
Japan
Industrials
Hitachi Ltd. engages in the manufacture and sale of electrical equipment. It operates through the following segments: Digital Systems & Services, Green Energy & Mobility and Connective Industries. The Digital Systems & Services segment includes digital solutions, IT products and ATM. The Green Energy & Mobility segment services includes energy solution and railway system. The Connective Industries segment services includes building systems, lifestyle, measurement and analysis systems, industrial and distribution solutions, water/environmental solutions and industrial equipment. The company was founded by Namihei Odaira in 1910 and is headquartered in Tokyo, Japan.
Meta Platforms Inc Class A
United States
Communication Services
Meta Platforms, Inc. operates as a social technology company. The Company builds applications and technologies that help people connect, find communities, and grow businesses. Meta Platform is also involved in advertisements, augmented, and virtual reality.
Microsoft Corporation
United States
Information Technology
Microsoft Corporation develops, manufactures, licenses, sells, and supports software products. The Company offers operating system software, server application software, business and consumer applications software, software development tools, and Internet and intranet software. Microsoft also develops video game consoles and digital music entertainment devices.
Netflix, Inc.
United States
Communication Services
Netflix, Inc. engages in providing entertainment services. It also offers activities for leisure time, entertainment video, video gaming, and other sources of entertainment. It operates through the United States and International geographic segments. The company was founded by Marc Randolph and Wilmot Reed Hastings on August 29, 1997 and is headquartered in Los Gatos, CA.
NVIDIA Corporation
United States
Information Technology
NVIDIA Corporation designs, develops, and markets three dimensional (3D) graphics processors and related software. The Company offers products that provides interactive 3D graphics to the mainstream personal computer market.
Taiwan Semiconductor Manufactu
United States
Information Technology
Taiwan Semiconductor Manufacturing Company, Ltd. manufactures and markets integrated circuits. The Company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production, and design services. TSMC's ICs are used in computer, communication, consumer electronics, automotive, and industrial equipment industries.
Visa Inc. Class A
United States
Financials
Visa Inc. operates a retail electronic payments network and manages global financial services. The Company also offers global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities.

Sector Breakdown

Capitalisation Breakdown

Region Breakdown

PERFORMANCE

PERFORMANCE SINCE STRATEGY INCEPTION

NET PERFORMANCE FOR PERIODS ENDING 31 Dec 20246

Pengana Axiom International Fund

The Class was established in 1 July 2017. From June 2021 Axiom was appointed as the investment manager for the Fund.

1M 1Y 2Y 3Y
Since
Axiom Appointed
June 20211
5Y
Since Fund
Inception
July 20172
Since Strategy
Inception
July 20043
Fund: APIR (HOW0002AU)1,2

Managed by Axiom from June 2021
3.9% 36.3% 33.6% 8.3% 12.8% 13.3% 12.6%
Current Strategy (Partial Simulation)4

Axiom Global Equity Strategy
14.6% 15.1% 9.3%
Index5 2.7% 29.4% 25.4% 11.2% 13.3% 12.9% 13.3% 8.7%

Swipe horizontally to see all columns

PERFORMANCE SINCE STRATEGY INCEPTION

NET PERFORMANCE SINCE INCEPTION6

COMMENTARY

Global equity markets were generally weaker in local currency terms during December, following a year of strong gains which led some investors to realise profits. This also reflected uncertainty concerning the future path of US monetary and trade policy. However, US dollar strength and Australian dollar weakness meant returns were positive in Australian dollar terms.

Inflation continued to stabilise across the major global economies, but remained sticky in the US, where it was unchanged in November at 2.8%. However, the US consumer remains resilient, with retail sales ex-auto and gas increasing by 3.3% in November.

In contrast, the European economy continues to struggle, with Eurozone composite purchasing manager index (PMI) data signalling ongoing contraction across the economy in December. November retail sales growth slowed to 1.2% year-on-year in Europe, down slightly from 1.9% in the prior month.

Government stimulus measures helped manufacturing activity to expand in China. However, broader Chinese economic data continues to largely disappoint expectations. Consumer spending is sluggish, with retail spending falling in November, while the highly leveraged property market continues to drag on economic activity.

The Fund continues to overweight information technology, communication services, and consumer discretionary, while underweighting financials, consumer staples, and energy.

Overweight positions in information technology, communications services and consumer discretionary and the zero weight in energy and materials drove relative returns. However, this was somewhat offset by negative stock performance in industrials, financials and information technology.

The Fund’s largest contributor to relative returns was its overweight position in Taiwan-based multinational semiconductor manufacturer TSMC. It outperformed after several semiconductor companies reported strong monthly sales figures. In particular, US-based custom semiconductor and infrastructure developer Broadcom reported stronger than expected fiscal fourth quarter revenue, earnings and forward guidance. TSMC is the key manufacturing partner for Broadcom’s leading-edge custom-designed semiconductors.

US-based e-commerce and cloud computing group Amazon.com also performed well in December. Its cloud business Amazon Web Services (AWS) and retail e-commerce businesses both continued to track ahead of investor expectations.

The Fund’s holding in US-based technology group Alphabet also contributed to relative returns in December, reflecting several positive developments. Waymo (Alphabet’s autonomous ride-sharing project) released data that showed it gaining strong market share in metro areas where it has recently launched. Also, digital advertising data-points around the key holiday period signalled the potential for stronger than expected revenue and earnings growth in this business area. Finally, the newly unveiled Gemini 2.0 (the company’s latest AI digital assistant version) demonstrated superior performance relative to existing solutions.

The largest detractor from relative returns in December was the Fund’s overweight exposure to the US-based provider of corporate uniforms and related business services, Cintas. It underperformed after reporting organic sales growth that was lower than expected. The Fund has maintained its position, as the manager believes that the revenue miss will prove to be an isolated event and remains confident in the company’s earnings growth prospects.

The Fund’s zero weight to Broadcom detracted from relative returns in December. This followed the company’s strong fiscal fourth quarter results and updated guidance on its long-term AI-related earnings growth.

US-based Uber Technologies underperformed in December. This followed publication of data that highlighted how Alphabet’s autonomous ride sharing business Waymo was building market share in San Francisco and Los Angeles. While Axiom continues to monitor the competitive trends in the ridesharing sector, it believes that Uber will play an integral part in the adoption of robotaxis and remains very positive on the company’s long-term growth prospects. Axiom believes that Uber’s network effects will be extremely difficult to replicate and expects Uber to announce more robotaxi partnerships over the coming quarters.

PROFILE

Platform Availability

  • Asgard eWrap
  • BT Investment Wrap
  • BT Panorama
  • BT Superwrap
  • Colonial First Wrap -IDPS
  • Centric IDPS
  • Hub24
  • IOOF Grow Wrap
  • Macquarie Wrap -IDPS
  • Macquarie Wrap -Super
  • Mason Stevens – IDPS
  • Mason Stevens – Super (Hedged)
  • Netwealth
  • Powerwrap

STATISTICAL DATA2

PORTFOLIO SUMMARY
VOLATILITY7
13.4%
NUMBER OF STOCKS
42
BETA8
1.01

FEATURES

  • APIR CODE HOW0002AU
  • REDEMPTION PRICEA$ 4.1166
  • FEES * Management Fee: 1.35% p.a
  • Minimum initial investment $10,000
  • FUM AT MONTH END A$ 388.56m
  • STRATEGY INCEPTION DATE 1 July 2004
  • BenchmarkMSCI All Country World Total Return Index (net, AUD)

Fund Managers

Bradley Amoils

Managing Director/Portfolio Manager

Andrew Jacobson

CEO/Chief Investment Officer

Description

The Pengana Axiom International Fund invests in companies that are dynamically growing and changing for the better, more rapidly than generally expected and where the positive changes are not yet reflected in expectations or valuation.

The Global Equity Strategy seeks dynamic growth by concentrating its investments in global developed markets, and may also invest in companies located in emerging markets.

The investment manager is Axiom Investors, a Connecticut-based global equity fund manager formed in 1998 with over US$19billion in assets under Management.

EXPLORE OUR FUNDS

Harding Loevner International Fund
Harding Loevner International Fund
Axiom International Fund
Axiom International Fund
Axiom International Fund (Hedged)
Axiom International Fund (Hedged)
Australian Equities Fund
Australian Equities Fund
High Conviction Property Securities Fund
High Conviction Property Securities Fund
Global Small Companies Fund
Global Small Companies Fund
WHEB Sustainable Impact Fund
WHEB Sustainable Impact Fund
Emerging Companies Fund
Emerging Companies Fund
High Conviction Equities Fund
High Conviction Equities Fund
Pengana International Equities Limited (ASX: PIA)
Pengana International Equities Limited (ASX: PIA)
Private Equity Trust (ASX: PE1)
Private Equity Trust (ASX: PE1)
Pengana Global Private Credit Trust (ASX:PCX)
Pengana Global Private Credit Trust (ASX:PCX)
Alpha Israel Fund
Alpha Israel Fund
Pengana Diversified Private Credit Fund
Pengana Diversified Private Credit Fund

Prior to June 2021, the Axiom Global Equity Strategy performance (shown in the shaded area) includes the strategy performance simulated by Pengana from the monthly gross returns of the Axiom Global Equity strategy. This simulation was done by: 1) the conversion of US-denominated gross returns to AUD, 2) applying the fee structure of the stated class. The simulation does not include the Pengana ethical screen. From June 2021 the strategy performance is the performance of the Pengana Axiom International Ethical Fund.

1. Axiom was appointed fund manager as of 5 May 2021. June 2021 represents the first full month of Axiom managing the Fund.
2. Inception date 1 July 2017. Figures shown are calculated from the continuous performance of both the current and previous strategies. For performance see row labelled Fund: APIR (HOW0002AU) in the table above which is the continuous performance of both the current and previous strategies.
3. Axiom Global Equity Strategy inception 1 Jul 2004.
4. Prior to June 2021, the Axiom Global Equity Strategy performance (labeled ‘Strategy (Partial Simulation)’ and shown in the shaded area) includes the strategy performance simulated by Pengana from the monthly gross returns of the Axiom Global Equity strategy. This simulation was done by: 1) the conversion of US-denominated gross returns to AUD, 2) applying the fee structure of the stated class. The simulation does not include the Pengana ethical screen. From June 2021 the strategy performance is the performance of the Pengana Axiom International Ethical Fund.
5. MSCI All Country World Total Return Index in AUD.
6. Performance for periods greater than 12 months are annualised. Net performance figures are shown after all fees and expenses, and assume reinvestment of distributions. No allowance has been made for buy/sell spreads. Please refer to the PDS for information regarding risks. Past performance is not a reliable indicator of future performance, the value of investments can go up and down.
7. Annualised standard deviation since inception.
8. Relative to the MSCI All Country World Total Return Index in AUD.
*For further information regarding fees please see the PDS available on our website.