The fund rose a 6.3% in May as global markets became more optimistic about a post-Covid-19 economic recovery. The Fund’s small healthcare names again performed well with Danish vaccine producer Bavarian Nordic rising after announcing it was entering a collaboration to produce a differentiated Covid-19 vaccine which could be ready in 2021.
The fund rose a 6.3% in May as global markets became more optimistic about a post Covid-19 economic recovery. The Fund’s small healthcare names again performed well with Danish vaccine producer Bavarian Nordic rising after announcing it was entering a collaboration to produce a differentiated Covid-19 vaccine which could be ready in 2021.
US gene editing company Sangamo also rose after highlighting that its partner Pfizer would commence a phase 3 study in Haemophilia A beginning in October and that the company had enrolled its first patient in its Fabry disease trial, both of which could be transformative for the company over the next two years.
US semiconductor Inphi rose after reporting strong results driven by demand for its semiconductors used in data centre optical components which are in turn experiencing very strong demand resulting from the Covid pandemic as consumers spend more time online.
US discount retailer Dollar Tree rose after reporting strong quarterly results as consumers trade down to cheaper products.
Uber also rose after reporting strong quarterly results driven by its food delivery business and a gradual recovery in its ride-hailing business.
We added a new position in Spanish airline reservation software company Amadeus, the largest of three companies in the industry, commanding 40-50% global market share. The second and third largest players are highly geared and loss-making due to Covid and will find it difficult to match Amadeus’ spending. The stock performed strongly after adding the holding.
On the negative side of the ledger was US optical component company Lumentum which fell after rival IIVI was qualified with Apple to produce 3D sensors used in the face ID feature of Iphones. Although not good news, Lumentum remains one to two years ahead in product design and will have 100% market share for new 3D sensors on the back of the 2020 Iphone, which we expect be a positive driver for the shares in the second half of the year.
US telecom test and measurement producer Viavi fell after reporting weaker than expected results due to Covid disruptions. We expect demand for its 5G network test equipment to drive growth over coming years.
US property company Howard Hughes, which owns large tracts of residential land as well as office, retail and hotels, fell after reporting results which highlighted weakness in the company’s retail and hospitality operations. On the positive side demand for its residential land held up well.
US nerve replacement producer Axogen fell after reporting weak results driven by Covid disruptions at hospitals, which were unable to perform surgical procedures.
As Covid restrictions ease the number of new cases is now on the rise again which is beginning to weigh on markets. Testing volumes have been rapidly increased which should give governments a better ability to control the spread of the virus compared to earlier in the year. Vaccine programs continue to advance with the Oxford University vaccine study expecting result by September. Its production partner Astra Zeneca expects to have hundreds of millions of doses ready by that time and two billion doses ready by early next year. US vaccine producer Moderna should also have results by November with large amounts of vaccine ready by year end. Several new promising antibody treatments have also entered human clinical studies and should yield results within a few months. These developments, along with central bank and government stimulus should continue to provide support for markets despite grim economic data.
Portfolio Manager
Portfolio Manager
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.
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.
