SUMMARY
In Nov-20 the fund delivered 6.0%, which was a strong outcome while still trailing the Market which delivered 7.1%. The stocks generating the largest positive returns were Mowi, Biotelemetry, and SMA Solar.
View full commentary HERE
The reflation trade
PORTFOLIO
Top Holdings (alphabetically)
Sector Breakdown
Capitalisation Breakdown
Region Breakdown
Segment
PERFORMANCE
PERFORMANCE SINCE STRATEGY INCEPTION
NET PERFORMANCE FOR PERIODS ENDING 30 Nov 20201
PERFORMANCE SINCE STRATEGY INCEPTION
NET PERFORMANCE SINCE INCEPTION2
COMMENTARY
The month’s trading was characterized as the reflation trade with the impetus being the strong results from various Covid vaccine trials and the belief that this will be the catalyst for economic growth in 2021. This resulted in a sharp and meaningful swing away from growth and to value stocks, with the former being a play on disruption-led growth and the latter on economic growth.
In Nov-20 the fund delivered 6.0%, which was a strong outcome while still trailing the Market which delivered 7.1%. The stocks generating the largest positive returns were Mowi, Biotelemetry, and SMA Solar.
We do not have large exposure to the growth-at-any price stocks meaning our weaker stocks did not come from that part of the market. Rather, the largest detractors were Alibaba and Tencent, with their performance explained by mushrooming Chinese regulation of dominant tech platforms.
The Fund is meaningfully differentiated to the Benchmark with 26% of the Fund invested in Europe ex-UK vs the Benchmark’s 13% and 45% invested in North America vs the Benchmark’s 60%. Further, the fund has fully exited the FAANG’s and has 8% invested in the IT sector vs the Benchmark’s 21%.
Finally, the portfolio is on a c5% FCF yield, 8% revenue CAGR and the companies in the fund have virtually no debt, all of which compare favourably to the broader market.
All portfolio holdings were compliant with the principles of the UN Global Compact and the portfolio had a “low ESG risk” rating, based on the aggregate weighted score of the portfolio’s holdings at month-end (source: Sustainalytics).
PROFILE
STATISTICAL DATA
PORTFOLIO SUMMARY
VOLATILITY3
9.6%
NUMBER OF STOCKS
34
BETA4
0.76
FEATURES
- APIR CODE HHA0002AU
- REDEMPTION PRICEA$ 2.7504
- FEES * Management Fee: 1.5%
- Minimum initial investment Closed to new investors (existing investors may make additional investments)
- FUM AT MONTH END A$ 62.2m
- STRATEGY INCEPTION DATE 1 July 2015
- BenchmarkMSCI All Country World Total Return Index in AUD**
Fund Managers
James McDonald
CIO
Description
“The Pengana International Fund – Ethical Opportunity (the Fund) is a long only fund that holds 30-50 companies across developed and developing markets, large and small companies. The Fund predominantly invests in companies that deliver stable yet growing free cash flow throughout cycles (which we classify as ‘Core’ holdings) whilst also taking positions in more cyclical companies (‘Cyclical’) and those whose valuation has been materially misconstrued by the market (‘Opportunistic’). We avoid investment in companies that, in our opinion, are harmful to people, animals or the environment. Important Note: There are significant accumulated tax losses contained within the Fund which may benefit existing investors.
We have accordingly closed the Fund to new investors in order to maintain the interests of existing investors. We strongly urge you to seek tax advice if you are an investor in the Fund, to understand how this may benefit you.
EXPLORE OUR FUNDS
1.2. A new strategy was implemented for the Pengana International Fund – Ethical Opportunity from 1 July 2017 by the Pengana team. The financial information below refers to the strategy currently employed by the Fund. For full performance history of the Fund, please refer to the Pengana website. From July 2017, performance figures are those of the Hunter Hall Pengana International Fund – Ethical Opportunity’s class A units (net of fees). Between July 2015 and June 2017, performance figures have been recalculated by adjusting the Pengana International Fund’s (ARSN 610 351 641) net returns to reflect the management fee of the Pengana International Fund – Ethical Opportunity. From July 2017, the Pengana International Fund – Ethical Opportunity has been managed by the same team and with the same strategy as the Pengana International Fund. The Pengana International Fund’s net track record data is historical. Past performance is not a reliable indicator of future performance. The value of the investment can go up or down.
3. Annualised standard deviation since inception. 4. 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.
**The benchmark was changed from MSCI World Total Return Index (net, AUD) effective 6 June 2017.
Important Note: There are significant accumulated tax losses contained within the Fund which may benefit existing investors.
We have accordingly closed the Fund to new investors in order to maintain the interests of existing investors. We strongly urge you to seek tax advice if you are an investor in the Fund, to understand how this may benefit you.