CLOSE
BACK

OUR FUNDS

CLOSE

Pengana International Equities Limited (ASX: PIA)

The largest International Ethical LIC on the ASX. Targeting fully franked dividends, paid quarterly.

May 2021 - Monthly REPORT

A “golden era” for health care innovation

SUMMARY

On May 10th, Pengana announced the appointment of Harding Loevner to manage the Portfolio. Established in 1989, Harding Loevner is a highly regarded global equity manager, responsible for the management of over US$84bn of investments on behalf of some of the world’s largest and most sophisticated investors (including pension funds, sovereign wealth funds, endowments, and family offices). In line with Harding Loevner’s investment strategy, PIA will hold investments in high-quality, growing companies identified through fundamental research with a long-term, global perspective.

In partnering with Harding Loevner, Pengana has identified a highly regarded investment manager with extensive global equity expertise that has generated significant outperformance throughout the strategy’s 32-year track record. We look forward to a long and fruitful relationship with our international equity investors.

Following Harding Loevner’s appointment, the process of transitioning the positions from the old to the new portfolio commenced.  This entire process was efficiently executed with minimal direct cost to PIA and was fully completed by month end. It is expected that the realisation of capital gains due to the transition will lead to increased franking credits, supporting the Company’s mandate of paying quarterly fully-franked dividends.

Please find a brief investment commentary for the month of May below, which will be expanded over the coming months now that Harding Loevner has full responsibility for portfolio management decisions. For investors wishing to know more about Harding Loevner’s investment philosophy and process, please see the recent introductory webinar recording HERE. 

PORTFOLIO

Top Holdings (alphabetically)

Alphabet Inc United States Communication Services
Amazon United States Consumer Discretionary
CME Group United States Financials
Deere & Co United States Industrials
Facebook Inc United States Communication Services
First Republic Bank/CA United States Financials
Illumina United States Health Care
Microsoft United States Information Technology
PayPal United States Information Technology
SVB Financial Group United States Financials
Communication Services
Alphabet Inc United States
Consumer Discretionary
Amazon United States
Financials
CME Group United States
Industrials
Deere & Co United States
Communication Services
Facebook Inc United States
Financials
First Republic Bank/CA United States
Health Care
Illumina United States
Information Technology
Microsoft United States
Information Technology
PayPal United States
Financials
SVB Financial Group United States

Sector Breakdown

Capitalisation Breakdown

Region Breakdown

PERFORMANCE

Performance Table

NET PERFORMANCE FOR PERIODS ENDING 31 May 20211
1 Month1 Year3 Years P.A.SINCE MANDATED
Fund 2.3%17.1%12.9%12.7%
Benchmark 1.2%20.6%13.5%13.6%
1 Month1 Year3 Years P.A.SINCE MANDATED
Fund
2.3%
17.1%
12.9%
12.7%
Benchmark
1.2%
20.6%
13.5%
13.6%

Performance Chart

NET PERFORMANCE SINCE MANDATED

COMMENTARY

Market 
As the pandemic eased and the recovery continued in most of the developed world, Energy and Financials led market returns. The prospect of higher interest rates helped banks continue their strong year-to-date run. Conversely, stocks lagged in Information Technology (IT) and Consumer Discretionary, where questions arose whether demand could keep rising at the pace witnessed at the height of the pandemic. A high concentration of Energy and Financials companies powered Canada higher. Europe fared well as COVID cases declined, pandemic restrictions relaxed, and vaccination efforts sped up after a sluggish start.

Portfolio  
We continue to see long-term growth opportunities within Health Care. The CEO of Illumina, the global leader in genetic sequencing tools, stated recently that we have entered a “golden era” for health care innovation due to advances in genomics and other areas of microbiology. We agree and believe that Illumina is well positioned to benefit from these advances as well as the industry’s renewed focus on investigating new gene-based therapies now that the pandemic is consuming less attention. As genetic sequencing technology improves and the cost falls, Illumina’s tools should have increasingly wider applications, from massive sequencing studies of large populations to clinical diagnostics and pre-natal testing.

PROFILE

STATISTICAL DATA (Since Mandated)

PORTFOLIO SUMMARY
VOLATILITY3
8%
NUMBER OF STOCKS
71
BETA4
0.63

FEATURES

  • ASX CODE PIA
  • FEES Management Fee: 1.23% p.a.
    Performance Fee: 15.38% of any return greater than the MSCI World***
  • INCEPTION DATE 19 March 2004
  • MANDATED 1 July 2017
  • BenchmarkMSCI World Total Return Index, Net Dividend Reinvested, in A$
  • NTA Post Tax ** A$ 1.349
  • NTA Pre Tax ** A$ 1.367
  • Price Close ** A$ 1.240
  • Shares On Issue ** 254.88m
  • DRP Yes

Portfolio Managers

Peter Baughan

Portfolio Manager

Jingyi Li

Portfolio Manager

Description

Pengana International Equities Limited (trading on the ASX as PIA) is the largest international ethical Listed Investment Company (“LIC”) on the ASX, that exists to provide shareholders with capital growth as well as regular, reliable, and fully franked dividends.

The strategy aims to generate superior risk-adjusted returns, through investing in an actively managed portfolio of global companies that meet the team’s high quality and durable growth criteria at reasonable prices. A robust ethical framework provides an added layer of risk mitigation.

These companies are identified through the conduct of fundamental research, with a long-term, global perspective, and must exhibit the following four key investment criteria: competitive advantages, quality management, financial strength, and sustainable growth potential.

EXPLORE OUR FUNDS

Harding Loevner International Fund
Harding Loevner International Fund
Axiom International Ethical Fund
Axiom International Ethical Fund
Axiom International Ethical Fund (Hedged)
Axiom International Ethical 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)
Alpha Israel Fund
Alpha Israel Fund

1. As at the last day of last month prior to publishing of this report. Performance figures refer to the movement in net assets per share, reversing out the impact of option exercises and payments of dividends, before tax paid or accrued on realised and unrealised gains. Past performance is not a reliable indicator of future performance, the value of investments can go up and down.
2. Inception date of PIA: 19 March 2004, new investment team with new mandate adopted: 1 July 2017. Pengana International Equities Limited has been managed under the new investment mandate by the Pengana investment team since 1 July 2017. The performance since mandated in the table above refers to the movement in net assets per share since the new mandate adopted on 1 July 2017. The index is the MSCI World Total Return Index, Net Dividends Reinvested, in A$.3. Annualised Standard Deviation since mandated
4. Relative to MSCI World
**. As at the last day of last month prior to publishing of this report. The figures are unaudited.
***. MSCI World refers to the MSCI World Total Return Index, Net Dividends Reinvested, in A$.