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High Conviction Equities Fund

A concentrated portfolio of ethically screened global companies

September 2024 - Monthly REPORT

Fund up 7% in September. 108% over 12 months

SUMMARY

The Fund returned 7.2% over the month of September and is now up 107.8% over the last 12 months.

  • Greatland Gold rose 33% after consolidating its Havieron asset and acquiring Telfer, with plans to relist in Australia.
  • Clarity Pharmaceutical gained 16% from positive prostate cancer study results showing significant PSA declines.
  • IperionX rose 17% after securing a Ford contract for titanium components, boosting its commercial potential.

Fund Manager James McDonald recently provided a portfolio update and insights from the reporting season, which is available below for your review. CPD points are applicable for Australian Financial Planners HERE.

PORTFOLIO

Top Holdings (alphabetically)

Brazilian Rare Earths Ltd.
Australia
Materials
Brazilian Rare Earths Ltd. operates as a mineral exploration company. It focuses on the discovery and development of mineral resources in Brazil. The company was founded on March 3, 2021 by Bernardo da Veiga and is headquartered in Sydney, Australia.
Clarity Pharmaceuticals Ltd
Australia
Health Care
Clarity Pharmaceuticals Limited operates as a radio-pharmaceutical company. The Company focuses on the developing targeted therapies for the treatment of cancer and other serious diseases. Clarity Pharmaceuticals serves customers worldwide.
Greatland Gold plc
United Kingdom
Materials
Greatland Gold Plc engages in the exploration and development of precious and base metals. Its project portfolio includes Paterson, Ernest Giles, Panorama, Firetower, Warrentinna, and Bromus. The firm operates through the following geographical segments: United Kingdom and Australia. The company was founded on November 16, 2005 and is headquartered in London, the United Kingdom.
IperionX Ltd
Australia
Materials
IperionX Ltd. engages in the development of low carbon titanium for advanced industries, including space, aerospace, electric vehicles and 3D printing. It produces titanium metal powders from titanium scrap at its operational pilot facility in Utah and intends to scale production at a Titanium Demonstration Facility in Virginia. The company was founded on May 5, 2017 and is headquartered in Charlotte, NC.
Iperionx Ltd. Sponsored ADR
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.

Sector Breakdown

Capitalisation Breakdown

Region Breakdown

PERFORMANCE

Performance Table

NET PERFORMANCE FOR PERIODS ENDING 30 Sep 2024 1
1 MTH 1 YEAR 2 YEARS P.A. 3 YEARS P.A. 5 YEARS P.A. SINCE INCEPTION P.A.
High Conviction Equities Fund Class A 7.2% 107.8% 56.9% 20.0% 19.1% 27.4%
MSCI World Total Return Index (net, AUD) -0.4% 23.2% 22.3% 10.6% 12.4% 12.2%
RBA Cash Rate plus 3% 0.6% 7.4% 6.9% 5.8% 4.8% 4.7%

Swipe horizontally to see all columns

Performance Chart

NET PERFORMANCE SINCE INCEPTION2

COMMENTARY

UK listed Greatland Gold, up 33%, was added to the portfolio in September via a capital raising that transformed the company.  Greatland Gold’s core asset is a large gold orebody called Havieron in Western Australia.  The capital raise enabled the company to consolidate the ownership of this asset to 100% and acquire the nearby Telfer processing plant, and Telfer’s remaining production from its associated mines (estimated at 375,000 Oz over 15 months). The transaction gives GGP immediate free cash flow from Telfer, this cash-flow plus capital raise then mainly funds Havieron’s development.  The company has become a significant gold producer, with at least 250,000 oz per annum for 20 years, at around $900 USD AISC, from FY28. It may be possible to lift production to more like 400,000 oz per annum by adding a second decline.  The stock should continue to de-risk from developer to producer and create significant shareholder value.  The company also plans to relist in Australia over the next 6 months, which will be a significant catalyst as it will likely be included in the ASX300 index and GDX index of gold miners.

Clarity Pharmaceutical rose 16% after reporting positive data from Cohort 4 of its SECURE prostate cancer radiotherapy dose escalation study. There have been no dose limiting toxicities at the higher dose. Two out of three patients were evaluable. One had a 92.3% PSA decline and one greater than 60%. Both patients had received many prior lines of treatment. We expect another 3 patients to be dosed in the coming month or two followed by 14 patients likely beginning next year.

IperionX rose 17% after reporting a contract with Ford to not only supply titanium powder but more importantly manufactured components over a 45 month period. The initial contract size is modest at USD11mln but has the potential to increase in time as Ford adds more models and parts. We view this very positively, validating the company’s ability to supply commercial quantities of high value added components that sell at much higher prices than powder. The company has previously announced other development customers such as Lockheed Martin and GKN which we hope will also be converted to commercial contracts in the future. We supported a $100mln capital raise in October which greatly strengthened the company’s balance sheet and accelerated its growth plans.

Australian pancreatic cancer radiotherapy producer Oncosil rose 27% after reporting data from a comparative analysis of 50 patients treated with their product plus chemotherapy compared to 54 patients who received chemotherapy alone. Overall survival was increased by 3.7 months and 29% were able to undergo surgical resection in the treatment arm compared to 12% in the chemotherapy alone arm. Further larger studies are needed. To that end, the company also announced its TRIPP-FXX study and PANCOSIL studies are both 50% recruited. The first evaluates Oncosil plus the latest chemotherapy regimen FOLFIRINOX compared to FOLFIRINOX alone in an 80-patient randomised study, while the second evaluates delivering Oncosil via the hepatic artery under sedation, compared to the current gastric delivery under general anaesthesia.

Australia ophthalmic drug producer Opthea rose 32% after releasing a presentation containing a new survey of Physicians, which highlighted that 41% of Wet Aged Macular degeneration patients would receive Opthea’s drug if it can show a five-letter gain on an eye chart which would equate to peak revenue of USD4bn per annum for the company. Although the fully diluted market capital of the company is now USD1.15bn, we see a substantial upside for the shares if the results of its two major clinical studies in April and July are positive.

PROFILE

Platform Availability

  • Hub24
  • Macquarie Wrap
  • Mason Stevens
  • Netwealth

STATISTICAL DATA

PORTFOLIO SUMMARY
VOLATILITY 3
25.1%
NUMBER OF STOCKS
15
BETA 4
0.63
MAXIMUM DRAW DOWN
-32.1%

FEATURES

  • APIR CODE Class A: HHA0020AU Class B: PCL9196AU
  • REDEMPTION PRICEClass A: A$ 4.1123 Class B: A$ 1.7254
  • FEES * Management Fee: 1.80% p.a. (Class A) | 1.25% p.a. (Class B)
    Performance Fee: 15.38% (Class A) | 20% (Class B)
  • Minimum initial investment A$10,000
  • FUM AT MONTH END A$ 81.52m
  • STRATEGY INCEPTION DATE 11 December 2014
  • BenchmarkRBA Cash Rate + 3%

Fund Managers

James McDonald

Portfolio Manager

Jeremy Bendeich

Portfolio Manager

Description

The Pengana High Conviction Equities Fund (the Fund) invests globally in a concentrated portfolio of up to 20 stocks. The Fund can invest in both small and large cap stocks and is diversified across countries and sectors. We avoid investment in companies that are currently, in our opinion, unnecessarily harmful to people, animals or the environment.

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

1. Net performance figures are shown are those of Class A Units, 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.
2. Inception 11 December 2014.
3. Annualised standard deviation since inception.
4. Relative to MSCI World. Using daily returns.
* For further information regarding fees please see the PDS available on our website.