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Pengana International Equities Limited (ASX: PIA)

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

VIEW PIA WEBSITE

October 2021 - Monthly REPORT

Strong competitive positions

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NTA POST-TAX

NTA PRE-TAX

INVESTMENT PERFORMANCE1

DIVIDEND YIELD2

CONSECUTIVE DIVIDENDS PAID

1. Investment performance since new mandate adopted 1 July 2017.
2. Dividend yield is based on current displayed share price and dividends declared over the previous 12 months
3. Grossed up yield is based on current displayed share price, dividends declared over the previous 12 months and the tax rate and franking percentage applicable for the most recently declared dividend

SUMMARY

In October 2021, the portfolio returned 1.4% compared to a market return of 1.6% for the same period.

October Attribution

1. Our US banks, First Republic Bank and SVB Financial Group, both reported robust growth while maintaining strong credit quality.
2. Alphabet shares gained after the company reported strong advertising revenue growth, overcoming fears it would be adversely impacted by Apple’s data privacy changes.
3. In China, a shift in sentiment back toward many companies whose shares had dropped following sweeping government regulatory changes earlier this year boosted NetEase.
Conversely, our Health Care holdings WuXi Biologics, a contract biologics manufacturer, and WuXi AppTec, a pharmaceutical R&D services platform, declined.

PORTFOLIO

Top Holdings (alphabetically)

Adobe Inc
United States
Information Technology
Alphabet Inc
United States
Communication Services
Amazon
United States
Consumer Discretionary
Deere & Co
United States
Industrials
First Republic Bank
United States
Financials
Illumina
United States
Health Care
Microsoft
United States
Information Technology
Nike Inc
United States
Consumer Discretionary
SVB Financial Group
United States
Financials
Wuxi Biologics Cayman Inc
China
Health Care
See Portfolio Breakdown

Sector Breakdown

Capitalisation Breakdown

Region Breakdown

PERFORMANCE

Performance Table

NET PERFORMANCE FOR PERIODS ENDING 31 Oct 20211
1M 1Y 3Y Pengana SI
July 20171
(ASX: PIA) 1.4% 25.3% 17.3% 14.1%
Index2 1.6% 31.3% 15.9% 14.9%

 

Swipe horizontally to see all columns

COMMENTARY

Market Review

Strong company earnings, especially by those in tech and its related sectors, sparked enthusiasm for equities. Software and semiconductor companies continued to experience strong demand. In Consumer Discretionary, returns were led by the automotive industry as Tesla jumped on news that rental car companies would expand their fleets of electric vehicles. In Communications Services, investors struggled to make sense of yet another Facebook controversy, this time instigated by a whistleblower report, as well as the company’s ambitious plan to invest in the metaverse—leading to it renaming itself Meta. All major markets gained except Japan, where optimism over new Prime Minister Fumio Kishida quickly faded after he suggested a possible increase in capital gains taxes.

Portfolio Comment

Supply chain bottlenecks and related rising costs have dominated recent news headlines. Many of our holdings have been able to pass on price increases to customers, thanks in large part to their strong competitive positions. While this insulates them from inflation to some extent, they are not immune. In the case of Nike, factory closures and lengthy transit times have increased costs and reduced inventory; the company has indicated that supply chain challenges may continue through mid-2022. However, Nike has more than offset these headwinds by increasing prices and by accelerating its shift to focus its distribution more on direct-to-consumer channels, driving sales growth in both its own stores and online.

Year-to-Date Attribution

1. In the US, EPAM Systems has experienced robust demand for digital modernization projects, while Adobe reported accelerating growth due to strong demand for its cloud offerings.
2. In Health Care, Vertex Pharmaceuticals declined after disappointing clinical trial outcomes. Chugai Pharmaceuticals declined on concerns of weaker royalties from its hemophilia drug.
3. Game developer CD Projekt has suffered from residual issues related to a botched game launch last year.
4. Remote work software company TeamViewer declined on market concerns that growth will slow as the COVID-19-related tailwind for its remote work products abates.

PROFILE

STATISTICAL DATA (Since Mandated)

PORTFOLIO SUMMARY
VOLATILITY3
8.7%
NUMBER OF STOCKS
71
BETA4
0.68

FEATURES

  • ASX CODE PIA
  • FEES Management Fee: 1.23% p.a.
    Performance Fee: 15.38% of any return greater than the Index***
  • INCEPTION DATE 19 March 2004
  • MANDATED 1 July 2017
  • BenchmarkMSCI World Total Return Index, Net Dividend Reinvested, in A$ ("Index")
  • NTA Post Tax ** A$ 1.442
    29/10/2021
  • NTA Pre Tax ** A$ 1.502
    29/10/2021
  • Price Close ** A$ 1.415
  • Shares On Issue ** 255.28m
  • Premium/Discount to pre-tax NTA ** -5.8%
  • DRP Yes

Portfolio Managers

Peter Baughan

Portfolio Manager

Jingyi Li

Portfolio Manager

Rick Schmidt

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. PIA’s objective is 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 investment 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

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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)
Alpha Israel Fund
Alpha Israel Fund
Pengana Diversified Private Credit Fund
Pengana Diversified Private Credit Fund
CONTACT INVESTOR SERVICES
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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. 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 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.

3. Annualised Standard Deviation since mandated
4. Relative to MSCI World Total Return Index, Net Dividends Reinvested
**As at the last day of last month prior to publishing of this report. The figures are unaudited.
*** Index/MSCI World refers to the MSCI World Total Return Index, Net Dividends Reinvested, in A$.