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Index Selector Link | 1 Year | 3 Year | 5 Year |
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7.20% |
15.02% |
9.30% |
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-14.64% |
2.04% |
3.62% |
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6.14% |
10.46% |
8.63% |
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-0.20% |
9.21% |
7.63% |
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-10.59% |
5.46% |
5.29% |
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3.79% |
10.06% |
9.91% |
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-8.26% |
9.00% |
8.97% |
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-16.29% |
8.12% |
7.17% |
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-4.46% |
10.99% |
11.91% |
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-5.06% |
0.24% |
1.66% |
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-0.45% |
3.41% |
3.73% |
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6.14% |
6.17% |
5.09% |
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17.16% |
7.38% |
8.30% |
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0.15% |
5.83% |
5.03% |
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8.53% |
10.02% |
10.74% |
Hedge Clippings
24 Jun 2022 - Hedge Clippings |24 June 2022
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Hedge Clippings | Friday, 24 June 2022 Last week's Hedge Clippings noted that central bankers were caught between a rock and a hard place, trying to manage inflation by tightening monetary policy, and at the same time managing a balancing act trying to prevent their economies falling into a recession. This week Australia's media only seemed to have a single topic (leaving aside Lisa Wilkinson's Logies stupidity) - namely inflation and wages. (No doubt the pedants will correctly note that's two topics, but they sort of go hand in hand.) The trouble with trying to curb inflation is that it's like trying to put a smell back in the bottle - once it's out, it's out. (Only genies and little ships go back in the bottle.) There was a chance, ever so slight, that whilst inflation was "transient" or external, it might have been possible to argue it was temporary. However, once the central banks started to lift rates, it was out. The combination of higher mortgage repayments and inflation leads to wage pressure, with the inevitable risk of an interest rate/wage/price spiral, and so it goes on. And on. Meanwhile Putin put a spike in the spokes, energy markets went into a spin, lettuces got into the act, and the price side of the spiral was confirmed. The Prime Minister had no option but to follow through on his election promise to push for the minimum wage to rise by the then inflation rate, and the Fair Work Commission obliged by lifting it by 5.2% for 184,000 lowest paid workers, and by 4.6% for another 2.6 million workers on higher awards. RBA governor Dr. Philip Lowe said he expected inflation to peak at 7% by the end of the year, and then "moderate", and while he doesn't believe official interest rates will reach 4%, he does admit his forecasting record in that regard hasn't been spectacular, to say the least. As far as forecasting a recession, he did at least cover himself by saying while he "doesn't see one on the horizon ... you can't rule anything out." To make his job easier, Dr. Lowe wants wages growth to be kept at 3.5%, while the ACTU's Sally McManus, not surprisingly wants her members to push for wage rises in line with inflation, which based on the RBA's forecast, means 7%, and predictably saying company profits are the cause of inflation. US Federal Reserve Chair Jerome Powell was even blunter than Philip Lowe - or maybe more realistic depending on one's view, acknowledging that a recession in the US was certainly a possibility. At the same time he reiterated that two key factors driving inflation - namely, energy prices and supply chain constraints - were out of his control, and that if he had to raise rates by 1% to curb inflation at the next or future meetings, he would. Against this backdrop it is no wonder that markets have rotated from last year's risk on, to this year's risk off, with the basis for equity valuations and multiples finally switching from forecast revenue, (or even consumer or subscriber numbers) to earnings, and then to recurring earnings in particular. In the upcoming reporting season there will no doubt be further revisions to equity prices as investors' and analysts' focus switches to recurring profit, or ROE. As the P side of the P/E ratio falls, so value - and buyers - will no doubt return. News & Insights New Funds on FundMonitors.com Manager Insights | Collins St Asset Management Megatrends drive sustainable growth | Insync Fund Managers Record high inflation could trigger a fresh eurozone financial crisis | Magellan Asset Management |
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May 2022 Performance News Bennelong Concentrated Australian Equities Fund Paragon Australian Long Short Fund Digital Asset Fund (Digital Opportunities Class) Glenmore Australian Equities Fund Insync Global Quality Equity Fund |
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Events
The Reserve Bank sets the target 'cash rate', followed by an explanatory media release announcing the decision after each Board meeting.
The Reserve Bank sets the target 'cash rate', followed by an explanatory media release announcing the decision after each Board meeting.
01 Jul 2022 - Sectors positioned to survive inflationary times
Sectors positioned to survive inflationary times Datt Capital June 2022 Invest in inflation. It's the only thing going up. -- Will Rogers Every day we read about higher costs of food, energy and property via higher interest rates, while our pay packets don't seem to be rising as fast as the cost of living. We're being told to learn to cut back on our quality of life and to expect lower returns going forward from our investment portfolios because of ostensibly more difficult business conditions and, prima facie, higher than typical stock valuations. The spigots of 'helicopter money' opened by central banks all over the world are slowly being closed along with rising interest rates that make the traditional 'safe haven' of fixed income, riskier than recent historical experience would suggest. In addition, the spectre of war is a key risk as the probability of conflicts increases during poor economic times. What is an investor to do? In an environment of low economic growth, high inflation (a situation known as stagflation) as well as tightening monetary and fiscal policy along with geopolitical risks. A sensible thing one can do is to put more onus on tangible, hard assets versus the recent popularity (and erstwhile success) of investing in abstractions. In these adverse market conditions, we believe that it's prudent to get back to the basics. Accordingly, factors such as positive cash flow, positive real returns (post-inflation), relatively low valuation multiples, returns to shareholders via capital initiatives and strong market leadership positions we view favourably. Which asset classes will be resilient?We can use history as a guide in comparing similar environments in the past with the present day. The stagflationary environment in the 1970s is a reasonable comparable in some ways to the present day, with numerous 'oil shocks' experienced analogous to the global 'energy molecule' crisis being experienced today. The sector that experienced the best returns over this decade was the energy sector, with the worst returns coming from the technology sector. Value and small-cap assets performed best throughout the decade, with growth assets and government bonds providing the worst relative returns. Accordingly, we believe the most favour sectors to be going forward to be:
It's important to observe that recent inflation has been driven by shortages and supply chain disruptions. Rising rates are unlikely to control inflation in the short term. Inflation has been labelled the 'silent tax' as it essentially measures the fall in a currency's purchasing power. It reduces the standard of living for the majority, which has the knock-on effect of reducing economic activity and increasing the probability of a recession. Accordingly, it's imperative to invest with those stewards of capital that can outperform the rate of inflation earning a real rate of return, thereby preserving one's purchasing power and quality of life. Passive market exposure may not provide this however, we firmly believe that the appropriate actively managed funds in combination with other uncorrelated assets provide a higher probability of preserving an investor's wealth in real terms. Since August 2018, the ASX200 Total Return index has compounded at an annualised rate of 8.79% per annum. Over the same timeframe, as an example, the Datt Capital Absolute Return Fund has doubled the index return: achieving 17.73% per annum (past performance is no guarantee of future performance) at lower relative risk, despite some of the most turbulent markets in living memory. This demonstrates the importance and value of adding high performing active managers; with the ability to invest within the sectors experiencing tailwinds to a diversified portfolio as a potential hedge against inflation. Author: Emanuel Datt Funds operated by this manager: |
Disclaimer: This article does not take into account your investment objectives, particular needs or financial situation; and should not be construed as advice in any way. The author holds no exposure to the stock discussed |
30 Jun 2022 - Performance Report: Equitable Investors Dragonfly Fund
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Fund Overview | The Fund is an open ended, unlisted unit trust investing predominantly in ASX listed companies. Hybrid, debt & unlisted investments are also considered. The Fund is focused on investing in growing or strategic businesses and generating returns that, to the extent possible, are less dependent on the direction of the broader sharemarket. The Fund may at times change its cash weighting or utilise exchange traded products to manage market risk. Investments will primarily be made in micro-to-mid cap companies listed on the ASX. Larger listed businesses will also be considered for investment but are not expected to meet the manager's investment criteria as regularly as smaller peers. |
Manager Comments | Software company Reckon(RKN) provided a highlight for the Fund as the company struck a deal to sell a business unit, in-keeping with Equitable's view on value and demonstrating their approach to 'bottom-up' investing focused on the opportunities presenting in individual companies. However, they noted in the absence of catalysts elsewhere, the smaller and less liquid listed investments faced broad selling pressure as sentiment was compounded by tax loss selling. Equitable Investors' view is that nothing about CY2022 has been easy for listed equities and the month of May brought on another round of share price declines as interest rates rose and investors who have not operated in such an environment since 2010 grappled with the implications. |
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30 Jun 2022 - Scarcity becomes common
Scarcity becomes common Magellan Asset Management June 2022 June 2022 Abbott Nutrition, which controls 48% of the US$2.1 billion US infant-formula market, in February recalled three product categories and closed a plant in Michigan after four babies who had consumed its powdered milk became sick with life-threatening bacterial infections even though there was no proven link.[1] By May, the US had a shortage of baby food - as in bare shelves (a nationwide out-of-stock rate of 43%),[2] panic buying, parents resorting to dangerous homemade remedies,[3] and infants hospitalised because not even doctors could obtain the specialised formula they needed.[4] That such a wealthy country has a shortage of baby food symbolises how the world is dogged by scarcity. The global manufacture and distribution of basic, essential and technological goods is muddled. The world's food supply can't get to everywhere it's needed. Countries reliant on imported energy are vulnerable. At an industry level, automobile production is hampered by a lack of parts. Industrial revenue has dropped due to a backlog of orders. Restaurant margins are under pressure. Retail is lacking stock and staff. Building is delayed. Tech companies lack the essential components. Some niche industries such as 'fast fashion' (online-clothing sales driven by Instagram influencers) face collapse. Supply is snarled for (at least) eight reasons, and the damage is magnified because many are occurring at once. The first and underlying problem is that supply lines are too precarious. One hiccup in these over-complicated, sprawling and self-organising production networks causes a shortage. Outsourcing and specialisation taken to the nth degree have meant that multinationals don't even know who are their suppliers. About 70% of 300 companies surveyed by India-based Resilinc Solutions in 2020 couldn't identify their suppliers in China just after covid-19 became apparent.[5] Adding to the mess is that an overreliance on China, just-in-time production, minimal inventory practices and high industry concentration reduce the margin of error for supplies. Even before the crisis in the four-producer US infant-formula market was apparent, a US Department of Agriculture report in February listed tackling industry concentration as "priority one" of six to strengthen the US food supply.[6] The second reason for shortages is climate change. Floods in China, heat waves in India and droughts in the US - more locally, heavy rain and not much sunshine in Queensland - mean crops are failing to enjoy the temperate weather needed for good harvests. Climate-change-related blows to food in storage (electricity failures that lead to a loss of cold storage) and damage to transport infrastructure "could significantly decrease availability and increase the cost of 22 highly perishable, nutritious foods such as fruits, vegetables, fish, meat, and dairy," the UN Intergovernmental Panel on Climate Change warned in March.[7] The other side to climate change is that its solutions are naturally hostile to investment in fossil-fuel production, and oil, gas and coal shortages loom when there is no foolproof replacement. The third reason is a scarcity of labour. Low unemployment means companies are struggling to find enough qualified workers. So firms are forced to cut production. In the US, for every two job openings in March, there was only one unemployed person.[8] A lack of workers has added to shortages when it has manifested as a disruption to transport. Think not enough truck drivers. The fourth reason is 'chipageddon', the term for a lack of microchips over the past two years because demand has outstripped global production capacity. Since a piece of silicon that contains nanoscopic electronic circuits component powers so many goods these days, the result is a shortage of everything from lightbulbs to cars to medical devices.[9] A fifth reason for shortages is the tension between China and the West that is impeding trade and investment - Intel CEO Pat Gelsinger in 2021 said Beijing-Washington strains made it hard for chipmakers to expand production.[10] As well as deterring investment, the politically driven impediments include export bans, tariffs and import quotas. Another reason for the shortages (especially of microchips) is covid-19. Lockdowns and logistic disruptions especially at ports hammered production and jammed container deliveries by ship and truck at a time when government stimulus boosted demand for goods. Freight costs rose so much companies such as Costco, Home Depot, Ikea and Walmart found it cheaper and more reliable to hire ships. China's 'zero-covid' response this year to the Omicron strain is bound to extend 'Made in China' shortages. The seventh reason is Russia's attack on Ukraine, two countries that account for 12.4% of calories traded, much of it to poor countries.[11] Western sanctions to punish Moscow are denying European businesses the Russian oil and gas they need to operate. Blackouts are possible, as are factory closures.[12] The sanctions are blocking the export of the fertiliser that helps farmers worldwide maximise crop output. In Ukraine, the fighting, Russian plundering and sabotage of rural production and Moscow's siege of Black Sea ports are blocking the export of grain staples.[13] Many warn of a global famine. The head of the UN's World Food Programme in May cautioned that hundreds of millions of people are "marching to starvation" in what could rank among the worst humanitarian disasters since World War II. The last reason given here for the shortages is fear of shortages. The panic-driven hoarding that emptied supermarkets of basic goods at the start of the covid-19 pandemic is reappearing in other forms. The US-based International Food Policy Research Institute said by early April at least 16 countries had banned export amounting to 17% of traded calories to stockpile local supplies. The list includes India outlawing wheat exports and Malaysia forbidding poultry trade at a time when 80% of the world lives in countries that are net importers of food.[14] The shortages behind delays, waste, forgone production and lost sales come with notable macroeconomic and political consequences. Economic growth will be lower than otherwise and inflation higher because scarcity makes prices much more sensitive to demand. Even if demand is steady, interruptions to the supply of goods result in the 'supply-side' inflation that central banks can do little to subdue. At the same time, high demand for labour leads to wages-price spirals that enshrine inflation, though at least central banks can calm an overheated labour market with rate increases. But the combination of reduced demand to subdue wages inflation, forgone production from supply shortages and hard-to-suppress supply-side inflation is stagflation. The political consequences of shortages and inflation are the protests directed at authorities that litter history, most prominently when hunger is driving the anger. Sri Lanka's deadly political turmoil and economic collapse is the latest example; all the more tragic because a government decision in 2021 to ban fertilisers and pesticides created a famine.[15] In a world of shortages, how can businesses and policymakers help? Governments are pondering sending in navies to get produce through the Black Sea. So far, too risky. More mundane decisions include that officials can reduce the amount of grain used in biofuels to help the world can feed itself.[16] Policymakers could prioritise fomenting another 'Green Revolution' by encouraging the adoption of 'agritech' to boost crop yields.[17] Business options include proper mapping of their suppliers, 'reshoring' and diversifying sources. Firms can use shorter shipping routes, undertake more frequent stock updates, pre-order and manage inventory levels more prudently. Truth is there are no quick solutions. The age of scarcity will pass but not for a while and not before it has shaken the world. To be sure, the 'everything shortage' is an exaggeration. Many would say that capitalism responded brilliantly to a surge in demand for medical and durable goods during the pandemic.[18] Policymakers are exaggerating the inflationary effects of shortages to shift blame from the excess demand they created with their fiscal and monetary stimulus during the pandemic. The worst appears over for shipping disruptions - peak dislocation seems to have been late last year. Same too for chip production, according to car makers,[19] while US retailers are complaining of too much inventory. But that's due to a drop in demand. Governments are taking action. Washington in June used emergency powers to solve a logjam of imports of modules and components for the solar-power industry.[20] But businesses immediately said this action would impede their efforts to boost domestic production.[21] Whatever the best way to ensure the US advances solar power, governments have the lesser role in solving today's shortages because their conventional economic tools are of little use. By and large, scarcity is a problem that business needs to solve. Babies depend on it. Organic failure In 2019, Sri Lankan President Gotabaya Rajapaksa unveiled "Vistas of prosperity and splendour," his vision for the island nation that had long been self-sufficient in food. Among many goals was one to "promote and popularise organic agriculture during the next 10 years".[22] In April 2021, Rajapaksa embarked on the world's greatest organic farming experiment when he suddenly banned the importation of chemical fertiliser and pesticides and ordered farmers to go organic without any help from imported organic fertiliser.[23] The results are tragic. Within six months, Sri Lankan rice production plunged 20% and rice prices soared 50%. The government was forced to import rice and ease the ban on chemicals.[24] But coupled with the pandemic's blow to tourism, the loss of tea exports to Russia and rising oil import prices, the U-turn wasn't enough. Sri Lanka has collapsed economically and politically. (Rajapaksa was ousted in May.) To some extent, Rajapaksa's shift to organic farming was a reversal of the great advances in farming in the 1960s when emerging countries adopted modern techniques.[25] Led by US scientist Norman Borlaug who won the Nobel Prize for Peace in 1970 for sparking the Green Revolution, crop yields surged, often doubled, across developing countries, especially the Indian subcontinent, thanks to the introduction of "higher-yielding short-strawed, disease-resistant wheat" that demanded the use of fertilisers and pesticides.[26] Organic farming produces up to 50% less food per hectare than conventional farming because it requires farmers to rotate soil out of production for pasture, fallow or cover crops.[27] Amid warnings of a global famine due to a fertiliser shortage and adverse weather, the world needs another technologically driven Green Revolution. Adversity spurs innovation.[28] If babies and others are in want, watch for technological advances in farming to ensure the world can feed itself again. By Michael Collins, Investment Specialist |
Funds operated by this manager: Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged), MFG Core Infrastructure Fund [1] The New York Times. '3 types of baby formula recalled after reported bacterial infections.' 18 February 2022. nytimes.com/2022/02/18/us/baby-formula-recall.html. A shortage of baby formula can hurt older children and even adults. See Washington Post. 'Baby formula shortage life-threatening for some older kids and adults.' 3 June 2022. washingtonpost.com/health/2022/06/03/baby-formula-shortage-metabolic-disorder/ [2] Datasembly. 'Datasembly release latest numbers on baby formula.' 10 May 2022. datasembly.com/ne [3] Bloomberg News. 'Parents are trying homemade baby formula. Doctors say they shouldn't.' 13 May 2022. bloomberg.com/news/articles/2022-05-12/why-parents-making-homemade-infant-formula-should-beware-of-serious-health-risks [4] ActionNew5. '2 Mid-South children hospitalized due to nationwide formula shortage.' 17 May 2022. actionnews5.com/2022/05/17/two-mid-south-children-hospitalized-due-nationwide-formula-shortage/ [5] Thomas Y. Choi, Dale Rogers, and Bindiya Vakil. Coronavirus is a wake-up call for supply chain management.' Harvard Business Management. 27 March 2020. hbr.org/2020/03/coronavirus-is-a-wake-up-call-for-supply-chain-management. The article notes that a Japanese semiconductor manufacturer told Harvard researchers it took a team of 100 people more than a year to 'map' the company's supply networks after the earthquake and tsunami in 2011. [6] US Department of Agriculture. USDA Agri-food supply chain assessment: Program and policy options for strengthening resilience.' 24 February 2022. Page 3. Boosting local and regional markets is one answer.ams.usda.gov/sites/default/files/media/USDAAgriFoodSupplyChainReport.pdf [7] IPCC Sixth Assessment Report. 'Climate change 2022: Impacts, adaptation and vulnerability.' 'Chapter 5. 'Food, fibre and other ecosystem products.' '5.11 The supply chain from post-harvest to food.' March 2022. ipcc.ch/report/ar6/wg2/ [8] US Bureau of Labor Statistics. Chart. 'Number of unemployed persons per job opening, seasonally adjusted.' bls.gov/charts/job-openings-and-labor-turnover/unemp-per-job-opening.htm [9] WIRED. 'Why the chip shortage drags on and on … and on.' 12 November 2021. wired.com/story/why-chip-shortage-drags-on/ [10] BBC. 'Intel chief warns of two-year chip shortage.' 28 July 2021. https://www.bbc.com/news/technology-57996908 [11] International Food Policy Research Institute. 'From bad to worse. How Russia-Ukraine war-related export restrictions exacerbate global food insecurity.' Blog. 13 April 2022. ifpri.org/blog/bad-worse-how-export-restrictions-exacerbate-global-food-security [12] Russia has restricted gas exports to Bulgaria and Poland in April over their refusal to pay in roubles and on Finland due to its application to join Nato. Russia is the world's biggest exporter of fertiliser and within a month of Russia's attack on February 24, Nola urea, a key fertiliser, had surged 60% to a 34-year height of US$880 a ton. [13] The Wall Street Journal. 'Ukraine is struggling to export its grain, and here's why.' 5 June 2022. wsj.com/articles/ukraine-is-struggling-to-export-its-grain-and-heres-why-11654421400 [14] The Economist. 'Why banning food exports does not work.' 25 May 2022. economist.com/the-economist-explains/2022/05/25/why-banning-food-exports-does-not-work [15] Reuters. 'Fertiliser ban decimates Sri Lanka crops as government popularity ebbs.' 3 March 2022. reuters.com/markets/commodities/fertiliser-ban-decimates-sri-lankan-crops-government-popularity-ebbs-2022-03-03/ [16] Håvard Halland, Rüya Perincek, and Jan Rieländer, executives at the OECD 'Links between energy and food must be weakened.' 27 May 2022. Financial Times. ft.com/content/471d4513-176c-4837-a7d4-7ef2609b720a [17] 'Agritech' is the modern term for technology solutions to boost crop yields. The term covers 'agplastics' for when plastic is used in farming for drip irrigation, coverings and much more. It enfolds genetically modified crops and hydroponics and other soil-less farming techniques. Included too are autonomous sprayers, driverless tractors, drones, imaging devices to detect diseases, laser soil analysis, microbes that boost plant growth, robot fruit pickers, vertical farming and the use of artificial intelligence and data sharing to power 'agrobots'. [18] Financial Times. Martin Sandbu. 'Shortages, what shortages? Global markets are delivering.' 15 December 2021. ft.com/content/ea89a152-ca34-4c01-8986-0d019f3cae74 [19] Bloomberg News. 'Carmakers feel chip crisis easing as global growth slows.' 4 June 2022. bloomberg.com/news/articles/2022-06-04/carmakers-feel-chip-crisis-easing-as-global-growth-slows [20] The White House. 'Declaration of emergency and authorisation for temporary extensions of time and duty-free importation of solar cells and modules from Southeast Asia.' 6 June 2022. whitehouse.gov/briefing-room/statements-releases/2022/06/06/declaration-of-emergency-and-authorization-for-temporary-extensions-of-time-and-duty-free-importation-of-solar-cells-and-modules-from-southeast-asia/ [21] The Wall Street Journal. 'White House set to pause new tariffs on solar imports for two years.' 5 June 2022. wsj.com/articles/white-house-wont-put-new-tariffs-on-solar-imports-for-two-years-sources-say-11654482582 [22] Sri Lankan government. 'National policy framework. Vistas of prosperity and splendour.' 2019. Page 25. doc.gov.lk/images/pdf/NationalPolicyframeworkEN/FinalDovVer02-English.pdf [23] US Department of Agriculture. Global Agricultural Information Network. 'Report name: Sri Lanka restricts and bans the import of fertilisers and agrichemicals.' 28 May 2021. apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName [24] Foreign Policy. 'In Sri Lanka, organic farming went catastrophically wrong.' 5 March 2022. foreignpolicy.com/2022/03/05/sri-lanka-organic-farming-crisis/ [25] See 'Green revolution'. Britannica. britannica.com/event/green-revolution [26] 'Norman Ernest. Biographical.' The Nobel Peace Prize 1970. The Nobel Prize. nobelprize.org/prizes/peace/1970/borlaug/biographical/ [27] Bjorn Lomborg. 'Organic farming is turning a food crisis into a catastrophe.' The Australian. 4 June 2022. theaustralian.com.au/inquirer/organic-farming-is-turning-a-food-crisis-into-a-catastrophe/news-story/944625bd3168b212eddccadeaed82640 [28] The Wall Street Journal. 'Fertiliser price surge drives Brazil to high-tech alternatives.' 8 June 2022. wsj.com/articles/fertilizer-price-surge-drives-brazil-to-high-tech-alternatives-11654701075 Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 ('Magellan') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should read and consider any relevant offer documentation applicable to any investment product or service and consider obtaining professional investment advice tailored to your specific circumstances before making any investment decision. A copy of the relevant PDS relating to a Magellan financial product or service may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any strategy, the amount or timing of any return from it, that asset allocations will be met, that it will be able to be implemented and its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan. |
29 Jun 2022 - Performance Report: Paragon Australian Long Short Fund
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Fund Overview | Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market. |
Manager Comments | On a calendar year basis, the fund has only experienced a negative annual return once in the 9 years and 3 months since its inception. Over the past 12 months, the fund's largest drawdown was -27.05% vs the index's -6.35%, and since inception in March 2013 the fund's largest drawdown was -45.11% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in January 2018 and lasted 2 years and 7 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by August 2020. The Manager has delivered these returns with 12.76% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.47 since inception. The fund has provided positive monthly returns 69% of the time in rising markets and 44% of the time during periods of market decline, contributing to an up-capture ratio since inception of 107% and a down-capture ratio of 92%. |
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29 Jun 2022 - Performance Report: Bennelong Concentrated Australian Equities Fund
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Manager Comments | The Bennelong Concentrated Australian Equities Fund has a track record of 13 years and 4 months and has outperformed the ASX 200 Total Return Index since inception in February 2009, providing investors with an annualised return of 14.34% compared with the index's return of 10.09% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 2 occasions in the 13 years and 4 months since its inception. Over the past 12 months, the fund's largest drawdown was -26.45% vs the index's -6.35%, and since inception in February 2009 the fund's largest drawdown was -26.45% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in December 2021 and has lasted 5 months, reaching its lowest point during May 2022. During this period, the index's maximum drawdown was -6.35%. The Manager has delivered these returns with 1.93% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.81 since inception. The fund has provided positive monthly returns 90% of the time in rising markets and 19% of the time during periods of market decline, contributing to an up-capture ratio since inception of 137% and a down-capture ratio of 96%. |
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29 Jun 2022 - Investment environment snapshot
Investment environment snapshot Laureola Advisors June 2022 The S&P declined 8.8% in April and by late May was down over 12% ytd. The Nasdaq was down 22% ytd. and Bitcoin down 38% ytd. The 10 yr Treasury finished at 2.9%; the yield has doubled in 18 mos. Concern is growing that the US Fed may be making serious policy mistakes by being weak on fighting inflation and focusing on supporting equity prices. The Fed may have to choose between two evils, both with significant negative effects. The respected economist Mr. El Erian has been vocal on this issue: "I think the Fed is going to have to decide between two policy mistakes ...". Rising rates won't help an economy already showing signs of weakness: new home sales were down 16.6% and business owners are increasingly pessimistic. The geo-political backdrop worsens as Russia and China appear to be allying more closely both economically and militarily. China has chartered 10 extra tankers in May alone to transport Russian oil and the two countries did a joint exercise flying strategic bombers over the Sea of Japan during President Biden's recent visit to Tokyo. Wheat shortages in Egypt (80% of her wheat comes from Ukraine and Russia) recently caused a riot in the streets as the subsidized bakery had no bread. The need for diversification in portfolios is greater now than ever and Life Settlements can provide the required stable, non-correlated returns even in this uncertain world. Funds operated by this manager: |
29 Jun 2022 - Thinking about industrial (and Qantas and Netflix)
28 Jun 2022 - Performance Report: Digital Asset Fund (Digital Opportunities Class)
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Fund Overview | The Fund offers a choice of three investment classes, each of which adopts a different investment strategy: - The Digital Opportunities Class identifies and trades low risk arbitrage opportunities between different exchanges and a number of digital assets; - The Digital Index Class tracks the performance of a basket of digital assets; - The Bitcoin Index Class tracks the performance of Bitcoin. Digital Opportunities Class: This class appeals to investors seeking an active exposure to the digital asset markets with no directional bias. The Digital Opportunities Class employs a high frequency inspired Market Neutral strategy trading 24/7 which uses a systematic approach designed to offer uncorrelated returns to the underlying highly volatile cryptocurrency markets. The strategy systematically exploits low-risk arbitrage opportunities across the most liquid and active digital asset markets on the most respected exchanges. When appropriate the Fund may obtain leverage, including through borrowing cash, securities and other instruments, and entering into derivative transactions and repurchase agreements. DAFM has a currency hedging policy in place for the Units in the Fund. Units in the Fund will be hedged against exposure to assets denominated in US dollars through a trading account with spot, forwards and options as directed by DAFM. |
Manager Comments | Since inception, the fund hasn't had any negative monthly returns and therefore hasn't experienced a drawdown. Over the same period, the index's largest drawdown was -55.54%. The Manager has delivered these returns with 43.99% less volatility than the index, contributing to a Sharpe ratio for performance over the past 12 months of 4.14 and for performance since inception of 1.79. The fund has provided positive monthly returns 100% of the time in rising markets and 100% of the time during periods of market decline, contributing to an up-capture ratio since inception of 9% and a down-capture ratio of -52%. |
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28 Jun 2022 - Performance Report: Bennelong Emerging Companies Fund
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Manager Comments | The Bennelong Emerging Companies Fund has a track record of 4 years and 7 months and therefore comparison over all market conditions and against its peers is limited. However, the fund has outperformed the ASX 200 Total Return Index since inception in November 2017, providing investors with an annualised return of 19.01% compared with the index's return of 8.54% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 4 years and 7 months since its inception. Over the past 12 months, the fund's largest drawdown was -23.74% vs the index's -6.35%, and since inception in November 2017 the fund's largest drawdown was -41.74% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in December 2019 and lasted 10 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by October 2020. The Manager has delivered these returns with 15.28% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past four years and which currently sits at 0.71 since inception. The fund has provided positive monthly returns 81% of the time in rising markets and 33% of the time during periods of market decline, contributing to an up-capture ratio since inception of 270% and a down-capture ratio of 129%. |
More Information |
28 Jun 2022 - 4D podcast: explaining the country review process
4D podcast: explaining the country review process 4D Infrastructure June 2022 Bennelong's Dave Whitby speaks with Greg Goodsell, 4D's Global Equity Strategist, about 4D's unique country review process - an integral part of the business's investment process - and its impact on the portfolio.
For more detail on our country review process, you can read our Global Matters article: Why country risk matters |
Funds operated by this manager: 4D Global Infrastructure Fund, 4D Emerging Markets Infrastructure FundThe content contained in this article represents the opinions of the authors. The authors may hold either long or short positions in securities of various companies discussed in the article. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely as an avenue for the authors to express their personal views on investing and for the entertainment of the reader. |
28 Jun 2022 - 4D podcast: explaining the country review process
4D podcast: explaining the country review process 4D Infrastructure June 2022 Bennelong's Dave Whitby speaks with Greg Goodsell, 4D's Global Equity Strategist, about 4D's unique country review process - an integral part of the business's investment process - and its impact on the portfolio.
For more detail on our country review process, you can read our Global Matters article: Why country risk matters |
Funds operated by this manager: 4D Global Infrastructure Fund, 4D Emerging Markets Infrastructure FundThe content contained in this article represents the opinions of the authors. The authors may hold either long or short positions in securities of various companies discussed in the article. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely as an avenue for the authors to express their personal views on investing and for the entertainment of the reader. |
27 Jun 2022 - Managers Insights | Collins St Asset Management
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Damen Purcell, COO of Australian Fund Monitors, speaks with Rob Hay, Head of Distribution & Investor Relations at Collins St Asset Management. The Collins St Value Fund has a track record of 6 years and 4 months and has outperformed the ASX 200 Total Return Index since inception in February 2016, providing investors with an annualised return of 17.87% compared with the index's return of 10.3% over the same period.
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17 Jun 2022 - The Rate Debate - Episode 28
The Rate Debate - Episode 28 Yarra Capital Management 04 May 2022 Has the RBA hit panic mode? With rates on the rise, higher inflation and wages below expectation, has Australia's central bank panicked by hiking rates by 50bps, the largest monthly move in over 20 years? The RBA's charter is to ensure the economic prosperity and welfare of the Australian people, which increasingly appears to be being overlooked in favour of an inflation target that isn't easily achievable without causing recession. |
Funds operated by this manager: Yarra Australian Equities Fund, Yarra Emerging Leaders Fund, Yarra Enhanced Income Fund, Yarra Income Plus Fund |
15 Jun 2022 - Manager Insights | Magellan Asset Management
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Damen Purcell, COO of FundMonitors.com, speaks with Chris Wheldon, Portfolio Manager at Magellan Asset Management. The Magellan High Conviction Fund has a track record of 8 years and 8 months. On a calendar year basis, the fund has only experienced a negative annual return once since its inception and has provided positive returns 88% of the time, contributing to an up-capture ratio for returns since inception of 83.03%.
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26 May 2022 - Infrastructure assets are well placed for an era of inflation
Infrastructure assets are well placed for an era of inflation Magellan Asset Management April 2022 Global stocks struggled early in 2022 because investors were concerned about faster inflation, which has risen to its highest in four decades in the US, a record high in the eurozone and highest in three decades in the UK. Long-term bond yields are climbing (bond prices are falling) because inflation reduces the value of future bond payments. Short-term bond yields are rising as central banks have increased, or are poised to lift, cash rates and terminate, even reverse, their asset-buying programs that supressed interest rates. In times of accelerating inflation and turbulent share markets, investors might find that holding global listed infrastructure securities is one way to help protect a portfolio against inflation. Inflation and asset values Inflation tends to hurt stocks in two ways. One is that inflation reduces the present value of future cash flows, a key determinant of share prices. The other way a sustained increase in inflation undermines stock valuations is that rising input costs and higher borrowing costs reduce profits - unless a business has the pricing power to boost the price of its goods or services to compensate. The lower the expected profits, the less people are willing to pay for shares. Inflation and infrastructure assets As inflation accelerates worldwide, many investors are turning to the few companies that are renowned for their inflation protection. Among these are infrastructure companies. The discussion here assumes companies defined as infrastructure meet two criteria. First, the company must own or operate assets that behave like monopolies. Second, the services provided by the company must be essential for a community to function efficiently. Such companies have predictable cash flows that make them attractive defensive assets. The main sectors within infrastructure are utilities, toll roads, airports, railroads, energy infrastructure, communications (mobile phone and broadcast towers). Each sector exhibits diverse investment characteristics and reacts differently to faster inflation, as explained below. The key thing to note though is most of these businesses are protected from inflation, which should help support their share prices if inflation becomes entrenched. Utilities Utilities include water utilities, electricity transmission (high-voltage power lines) and electricity distribution (urban power lines) and gas transmission and distribution. In most countries, utilities are monopolies. Consequently, government regulators control the prices these entities charge and adjust rates to provide utilities with an appropriate return on invested capital. This process requires regulators to take into account the changes to borrowing, construction and operating costs and changes in the value of the assets that utilities own. While all the regulatory regimes that Magellan considers to be investment-grade feature mechanisms that allow for the recovery of rising utility input and financing costs, the intricacies of different regulatory regimes affect the timeliness of that recovery. Regulatory systems that strike return allowances in real terms, escalate revenues with inflation, and index debt costs to market yields, including those in Australia and the UK, provide the most timely protection against inflation. By contrast, regulatory systems such as those in Spain and the US that strike return and cost allowances in nominal terms protect against inflation with a modest lag. Toll roads The typical business model for a toll road is that a government signs a contract that allows a toll-road operator to collect tolls for a set time and increase those tolls on a regular basis in a defined way. At the end of this contract, the road is returned to government ownership in a good state of repair. In most countries, the toll road is often not the only road route available to motorists. Consequently, the toll road is not a monopoly. The toll road, however, generally exists because alternative routes are much slower. The opening of a toll road inevitably reduces traffic on the free alternative. But over time, the free alternative can become congested more quickly than the toll road. As that occurs, the toll road behaves more like a monopoly and gives toll roads increased pricing power. However, toll price changes are generally pre-defined under a contract. Table 1 shows a cross-section of how toll prices are set in a range of contracts. Sources: Company releases, Magellan As can be seen, the pricing mechanism for many of these toll roads picks up any increases in inflation with minimal lag. Moreover, due to their strong pricing power, toll roads can expect that there will be minimal, if any, loss in traffic when tolls increase so revenues will fully recover the inflationary hit. Additionally, one of the key characteristics of toll roads that insulates them from inflationary impacts is their high profit margins. Table 2 shows the gross profit margins of a selection of international toll roads. The average margin of 75% from the sample is substantially above other industrial companies. Source: Company releases, Magellan The other key area where inflation can hurt profits is by increasing the cost of capital expenditure companies need to undertake. With most toll roads, however, the capital expenditure on operating roads is minimal and generally limited to resurfacing and replacing crash barriers, etc. Airports When looking at airports and inflation, it's best to consider airports as two businesses. The 'airside' operations primarily involve managing the runways and taxiways of the airport. Airside revenue is generated by a charge levied per passenger or a charge levied on the weight of the plane, or a combination. In most jurisdictions, the onus is on the airport to negotiate appropriate charges with the airlines. This side of the operation therefore behaves much like a regulated utility. The other business is the 'landside' operation that involves the remainder of the airport. These operations cover three primary areas: retail, car parking and property development. In most airports, the airport owner does not run the retail outlets. Instead, the owner acts as the lessor and receives a guaranteed minimum rental that is normally inflation-linked plus a share of sales. These revenues are therefore protected from a jump in inflation. The parking operations at the airport generally behave like a monopoly although there is some substitution threat; that is, passengers can use taxis instead of driving. As such, airports have significant ability to increase prices in response to higher inflation. In regard to costs, airport profit margins exhibit much greater variability than toll roads, as evident from Table 3. Source: Company releases, Magellan Efficient airports such as those in Auckland and Sydney are more insulated from faster inflation than those (typically European) airports that are struggling to reduce the workforces that were in place when they were privatised. (Even these less-efficient airports still exhibit higher margins than the average industrial company.) Finally, airports also have the highest capital expenditure requirements of any of the transport infrastructure subsectors. Airside capital expenditure includes widening and extending runways and taxiways. It is generally only undertaken after consultation and agreement with the airlines and regulatory authorities. Over time, airside charges will rise to recover these costs. Landside capital expenditure relates to increasing the retail, parking and general property leasing facilities. Higher inflation may change the financial viability of such capital expenditure. But airports, having an unregulated monopoly in these areas, can increase prices to compensate for inflation. Consequently, inflation is unlikely to hurt the value of an airport asset. Railroads (Class 1 freight rail) The railroads that meet Magellan's definition of infrastructure are primarily North American Class 1 railroads. These railroads typically have no regulator-approved capability to pass through inflation. Instead, their respective national regulators provide for lighter economic regulation using a broad 'revenue adequacy' standard. Thus, regulations have allowed railroad operators to charge rates that support prudent capital outlays, assure the repayment of a reasonable level of debt, permit the raising of needed equity capital, and cover the effects of inflation whilst attempting to maintain sufficient levels of market-based competition. Arguably, this framework has provided railroads with greater discretion around the rates they charge customers and thus, the ability to more than account for inflation. Chart 1 shows how North American railroads have increased rates at levels well ahead of inflation over the past 20 years. Source: US Bureau of Labor Statistics; Federal Reserve and AAR This isn't to suggest that regulation provides the key source of inflation protection for North American railroads. Rather, we think the rails generate most of their inflation protection from pricing power (which is derived from the lack of alternatives and the regional duopolistic regional markets) and operating efficiencies. Energy infrastructure The energy-infrastructure companies that meet our definition of infrastructure have dominant market positions and real pricing power, which is reflected in long-term, typically inflation-linked, take-or-pay contracts or regulated returns. Given the long-term nature of energy infrastructure contracts, pipeline and storage operators typically use pre-agreed price increases to protect real revenues and hedge against rising costs. Given the strategic and monopolistic nature of some assets such as transmission pipelines, some of these pipelines are regulated. Australia, for instance, has a mix of regulated and unregulated gas pipelines. In Canada, tariffs are negotiated within a regulatory framework. In the US, the regulator sets pipeline rates to allow the operator to earn a fair return on their invested capital. All methods protect these companies from inflation. Tank-storage providers that meet our definition of infrastructure need to have terminals in favourable locations and typically sell capacity, predominantly under long-term contracts, with no exposure to movements in commodity prices. Long-term storage contracts are usually indexed in a similar way to pipeline contracts. Netherlands-based storage provider Royal Vopak has long-term contracts (longer than one year) linked to the CPI of the country where the storage takes place (with annual indexation), while the bulk of costs are in the local currency of those countries, which provides a strong hedge against inflation Communications infrastructure Communications infrastructure, as defined by Magellan, is comprised of independently owned communication sites designed to host wireless communication equipment, primarily towers. Although these sites are mainly used by wireless carriers, they may host equipment for television, radio and public-safety networks. Despite the complexities of the technology that underpins wireless communication networks, the business model for these tower companies is simple. These companies generate most of their revenue through leasing tower space to wireless carriers such as mobile-service providers that need a place to install equipment. In return for providing this space, the tower company receives a lease or services agreement that provides a long-term and reliable income stream. The terms of these contracts are usually favourable for tower companies because data demand is strong and competition is low. Thus, leases are long term and revenue increases are priced into the contract. Source: Magellan Even so, we consider some, primarily US-based, communication towers to be relatively more sensitive to changes in inflation than other infrastructure sectors. This is due to communication towers in the US typically having limited inflation protection on the revenue side in the near term. In sum, we consider their protection to be partial. The second order effect of higher interest rates The traditional policy approach from central banks in response to higher inflation is to raise nominal interest rates, which has potentially two effects on our investment universe: The impact of changes in interest rates on the underlying financial performance of the businesses in which we invest; and the impact on the valuation of those businesses. As discussed above, regulated utilities can recover the cost tied to a rise in inflation through the periodic regulatory process. This generally includes the costs of servicing higher interest rates on their debt, thus exposure to interest rates will be limited to the length of time between reset periods, albeit in practice those utilities that are exposed to this kind of risk tend to hedge it by issuing fixed rate debt with a term that aligns with the regulatory period. Overall, the past decade has witnessed a significant lengthening in the duration of the debt portfolio for the majority of infrastructure and utilities businesses. Many of these companies are well protected from higher rates because they have taken advantage of the low interest rates of recent years to lock in cheap, fixed rate debt for long periods. Ultimately, we are confident that any shifts in interest rates will not hamper the financial performance of the companies in the portfolio for the foreseeable future. In terms of valuation, an increase in interest rates can be expected to lead to a higher cost of debt, and an increase in the rate at which investors value future earnings (the higher this 'discount rate', the less investors are willing to pay for future income streams). While our forecasts and valuations take these factors into account, the history of financial markets leads us to expect increasing uncertainty if rates rise or look like rising. Companies that are regarded as 'defensive' are often shunned when interest rates rise as investors prefer higher-growth sectors. However, it is our experience that provided businesses have solid fundamentals, their stock prices over the longer term will reflect their underlying earnings. In recent history, there have been three occasions where we have seen a spike in US 10-year yields of about 0.9%. At face value, these three increases in prevailing interest rates appear to have led to declines in the market value of listed infrastructure. However, if we look over the combined period then a different picture emerges. The following chart shows the performance of the Magellan Infrastructure Fund from June 2012 to December 2019. The chart shows that the hit from higher interest rates was short term. Once the interest-rate rises were digested and it was established that the outlooks for infrastructure businesses were largely unaffected then the share prices recovered. Conclusion Infrastructure remains well placed in an environment of increasing inflation due to its inflation-linked revenues, low operating costs and consequent high margins, with the second order impact of higher interest rates being muted by the lengthening of company debt portfolios over the past decade. These characteristics offer investors a haven when inflation is at decade highs around the world. |
Funds operated by this manager: Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged), MFG Core Infrastructure Fund [1] This is on a post-lease payments basis. Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 ('Magellan') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should read and consider any relevant offer documentation applicable to any investment product or service and consider obtaining professional investment advice tailored to your specific circumstances before making any investment decision. A copy of the relevant PDS relating to a Magellan financial product or service may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any strategy, the amount or timing of any return from it, that asset allocations will be met, that it will be able to be implemented and its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan. |
06 May 2022 - The Rate Debate - Episode 27
The Rate Debate - Episode 27 Yarra Capital Management 04 May 2022 Is the RBA risking a recession to solve inflation? The RBA hikes rates by 25bps, with more set to come in 2022 as Australia's central bank attempts to keep a grip on inflation. With oil and commodity prices set to continue to be at elevated levels due to Russia's war with Ukraine, could a series of rapid rate hikes rates push the Australian economy into recession?? Tune in to hear Darren and Chris discuss this in episode 27 of The Rate Debate. |
Funds operated by this manager: Yarra Australian Equities Fund, Yarra Emerging Leaders Fund, Yarra Enhanced Income Fund, Yarra Income Plus Fund |
04 May 2022 - Update on Q1 2022 Webinar Recording
Update on Q1 2022 Webinar Recording Laureola Advisors April 2022 On Wednesday, April 27, Laureola Advisors shared an update on Q1 2022. Request for the recording now! ABOUT LAUREOLA ADVISORS The best feature of the asset class is the genuine non-correlation with stocks, bonds, real estate, or hedge funds. Life Settlement investors will make money when others can't. Like many asset classes, Life Settlements provides experienced and competent boutique managers like Laureola with significant advantages over larger institutional players. In Life Settlements, the boutique manager can identify and close more opportunities in a cost effective manner, can move quickly when necessary, and can instantly adapt when opportunities dry up in one segment but appear in another. Larger investors are restricted not only by their size and natural inertia, but by self-imposed rules and criteria, which are typically designed by committees. The Laureola Advisors team has transacted over $1 billion (US dollars) in face value of life insurance policies. Funds operated by this manager: |
03 May 2022 - Twitter bids, social media monetisation and control in volatile markets
Twitter bids, social media monetisation and control in volatile markets Forager Funds Management 02 May 2021
In this episode, CIO Steve Johnson is joined by whisky-naysayer (and Senior Analyst) Chloe Stokes to discuss the bid for Twitter, social media monetisation, and control in volatile markets. Chloe also shares her experience as a younger investor and reveals the stocks (and burgers) currently on her watchlist. "As shareholders, we can't help but be disappointed. We bought [Twitter] because we thought the platform had a lot of potential," Chloe tells Steve. "It's obvious that we think it's worth more than the bid, because we held it through periods where it was trading much higher and still thought it was worth more than those higher prices. So, we are definitely not happy from a price perspective, but on the other hand, we can't stop talking about it." Timestamps 02.30 Start |
Funds operated by this manager: Forager Australian Shares Fund (ASX: FOR), Forager International Shares Fund |
20 Apr 2022 - The Ardea Alternative - Foreign Currency Management
The Ardea Alternative - Foreign Currency Management Ardea Investment Management 28 March 2022 Key Portfolio Construction Trade-Offs Dr. Laura Ryan and Tamar Hamlyn are joined by Dr. Nigel Wilkin-Smith to discuss the importance of currency management for AUD investors, along with the backdrop created by the regulatory environment in superannuation, particularly the YFYS performance test. |
Funds operated by this manager: Ardea Australian Inflation Linked Bond Fund, Ardea Real Outcome Fund |
07 Apr 2022 - The Rise of the Contactless Economy
The Rise of the Contactless Economy Insync Fund Managers March 2022 Fingertip readers and facial recognition used to be something we only saw in Hollywood movies, now they are staples in our economy. The way we purchase has dramatically adjusted to the new normal. Covid-19 has created an unprecedented global change in how we pay for things. There has been a profound and permanent change in behaviour in Australia and many parts of the world. Payment apps are easy to use, they offer improved security and the work from home offers balance, since Covid means more time to browse from home via laptops and phones.
Insync's Portfolio Manager, John Lobb tells us more on the The Rise of the Contactless Economy Megatrend: Funds operated by this manager: Insync Global Capital Aware Fund, Insync Global Quality Equity Fund |
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