Download nikko am australian share concentrated fund

AS AT
30 June 2017
Australian equities
NIKKO AM AUSTRALIAN SHARE CONCENTRATED
FUND
Fund Update
Fund Performance (%)
1 Mth
3 Mths
6 Mths
1 Yr
2 Yrs
p.a.
3 Yrs
p.a.
4 Yrs
p.a.
5 Yrs
p.a.
10 Yrs
p.a.
15 Yrs
p.a.
20 Yrs
p.a.
Since
Inception
p.a
Fund growth return
Fund distribution return
Total Fund (net)
Benchmark return
-3.25
3.09
-0.16
0.17
-7.40
6.75
-0.66
-1.58
-4.11
7.65
3.54
3.16
5.07
10.50
15.57
14.09
0.01
6.96
6.98
7.11
-0.90
7.01
6.11
6.63
0.04
10.03
10.08
9.23
2.90
10.81
13.71
11.81
-----
-----
-----
1.52
9.03
10.55
8.85
Excess Return
-0.33
0.92
0.38
1.48
-0.13
-0.52
0.84
1.90
--
--
--
1.70
Source: BNP Paribas. Fund growth return is the change in redemption prices over the period. Fund distribution return equals Total Fund minus fund growth return. Fund net
returns are post fees, pre tax using redemption prices and assume reinvestment of distributions. Inception date for the Fund is 26 May 2010.
Past performance is not an indicator of future performance.
The Fund underperformed the benchmark over the month.
Key contributors to relative performance:
• Overweight Insurance Australia Group. IAG outperformed
after upgrading margin guidance. IAG announced that there
would be materially larger than expected positive reserve
releases into profit after better than expected claims
experience.
• Overweight IOOF. IOOF outperformed on the back of market
data indicating that the company continues to gain financial
adviser numbers, a positive indicator for future growth in net
funds under administration.
• Overweight Whitehaven Coal. Whitehaven outperformed
driven by a circa 10% lift in thermal coal prices. This was
partly a function of higher prices in China as they enter a
higher demand season.
• Overweight Amcor. Amcor outperformed in June after
hosting an analyst and investor tour in the US. Growth
remains a strong priority with the focus on flexible packaging
in the Americas, as well as specialty rigid plastic packaging.
• Overweight Aristocrat Leisure. Aristocrat continued to
outperform in June on the back of strong 1H17 results
released in late May. Aristocrat continues to win market share
in the US and in online social gaming, with operating
leverage providing an additional positive surprise.
•
•
•
Overweight SkyCity Entertainment. SkyCity
underperformed late in June as the market was spooked by a
substantial shareholder exiting their entire holding 12 hours
prior to the Chairman announcing his pending retirement.
We are confident that the two events are unrelated.
Overweight Woodside
Woodside Petroleum. Woodside
underperformed primarily as a result of weakness in oil prices.
Overweight Iluka Resources. Iluka detracted from
performance after a pull-back early in June following three
months of outperformance.
Top 10 Holdings
Security Name
Westpac Bank
ANZ Bank
Commonwealth Bank
National Australia Bank
Lendlease
Aristocrat Leisure
Insurance Australia Group
Woodside Petroleum
Wesfarmers
Amcor
% of Fund
7.74
7.59
7.26
7.02
5.46
5.28
4.89
4.62
4.34
3.89
Top 5 Over/Underweight Positions
Key detractors from relative performance:
• Overweight Origin Energy. Origin underperformed given
weakness in the oil price and the negative sentiment around
the government's gas crisis review.
• Not holding CSL. CSL detracted from performance as the
company performed strongly after announcing a USD 352
million (80%) stake in Chinese plasma fractionator Wuhan
Zhong Yuan Rui De Biologics.
n i kko am.c o m.au
4.8%
LENDLEASE
ARISTOCRAT LEISURE
4.3%
INSURANCE AUSTRALIA GROUP
3.8%
SKYCITY ENTERTAINMENT
3.4%
JANUS HENDERSON GROUP
3.2%
BHP BILLITON
-5.0%
CSL
-4.2%
-2.2%
COMMONWEALTH BANK
-2.2%
WOOLWORTHS
-2.0%
MACQUARIE GROUP
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NIKKO AM AUSTRALIAN SHARE CONCENTRATED FUND
sector was Energy (-6.9%) which was dragged lower by the
falling oil price.
Fund Metrics
Price to Earnings
Ratio*
Forecast Dividend
Yield (%)*
14.91
15.83
4.66
4.54
Fund
Benchmark
Actual figures may vary. Forecasts are 12 months forward.
* Based on Broker Consensus forecast.
Amongst stock specific news, Vocus received a takeover offer
from private equity firm KKR which saw the stock up 19.5% for
the month. The Tabcorp and Tatts Group merger was
approved by the Australian Competition Tribunal, but is
contingent on the sale of Tabcorp's Odyssey Gaming Services.
Sector Exposure (%)
Fund Objective
Consumer Discretionary
Consumer Staple
Energy
Financials
Health Care
Industrials
Info Technology
Materials
Real Estate
Telecom Services
Utilities
Cash & Equivalents
The Fund aims to provide long-term capital growth and
income by investing in a concentrated selection of shares. The
Fund is constructed on a benchmark unaware basis, which
means stock weightings in the Fund can vary considerably
from the S&P/ASX 200 Index.
Fund
Benchmark
0
10
20
30
40
50
Market Commentary
The S&P/ASX 200 Accumulation Index was up 0.2% during the
month. The Australian market managed a marginally positive
return in June while global equity markets were mixed. Global
markets were higher initially, with the Dow, S&P 500 and
NASDAQ all hitting record highs. However equities suffered
late in the month as bond markets sold-off after the UK and
Europe indicated the potential for reduced stimulus measures.
During the month, the Reserve Bank of Australia (RBA)
maintained the cash rate at 1.50%. The RBA has maintained its
prior view on the economy; that the temporary drags from the
first quarter are reversing, that the labour market is improving,
house prices are easing and that global growth remains
positive. The RBA does have growing concerns over the
outlook for consumers and elevated levels of debt growth.
In the latest economic data, Q1 GDP rose 0.3% for the quarter,
with the annual rate at 1.7% (down from 2.4% previously), the
slowest year on year pace since 2009. Retail sales for April grew
a stronger than expected 1.0%. Building approvals for April
were up 4.8%. Employment for May exceeded expectations,
rising by 42,000 positions, driven largely by full-time
employment. The unemployment rate fell to 5.5%, the lowest
rate since February 2013. The NAB business confidence survey
was lower at +7 in May from +13 in April. Meanwhile the
business conditions survey remained steady, with a May
reading of +12.
Sector returns were mixed during the month. The Healthcare
sector was the best performer, up 6.1%. Financials ex-REITs
(1.6%), Materials (0.6%) and Consumer Discretionary (0.5%)
were also positive. The Industrials (-0.4%), Telecommunications
(-1.5%), Consumer Staples (-2.6%), Utilities (-2.7%) and
REITs (-4.8%) sectors were all negative. The worst performing
n i kko am.c o m.au
Key Facts
Responsible Entity
Nikko Asset Management
Australia Limited
Buy/Sell Spread
0.30%/0.30%
APIR Code
TYN0040AU
Management Cost
1.00% p.a.
Portfolio Manager
Tim Johnston, Jason Kim
Distribution Frequency
Quarterly
Asset Allocation
Equity
(Min 90%, Max 100%)
Cash
(Min 0%, Max 10%)
Fund Size
AUD 61.56 million*
Minimum Investment
AUD 20,000 or platform
nominated minimums
Fund Rating+
Recommended by Lonsec
Recommended by Zenith
Bronze by Morningstar
* Provisional
+ Research House Disclaimers:
www.nikkoam.com.au/ntascf-research-house-disclaimers
Contact Us
Nikko AM Limited
Level 31, 420 George Street, Sydney NSW 2000, Australia
Phone: 1800 251 589
Fax: +61 2 8072 6304
Email: [email protected]
Important Information
This material was prepared and issued by Nikko Asset Management Australia
Limited ABN 34 002 542 038, AFSL 229664 (Nikko AM Australia) who is the
responsible entity and issuer of units in the Nikko AM Australian Share
Concentrated Fund ARSN 143 598 556 (Fund). Nikko AM Australia is part of the
Nikko AM Group. The information contained in this material is of a general
nature only and is not personal advice. It does not take into account the
objectives, financial situation or needs of any individual. Investors should
consult a financial adviser as well as the information contained in the Fund's
current Product Disclosure Statement (PDS) and the 'Additional Information to
the PDS' which are available at www.nikkoam.com.au/pds before deciding to
invest in the Fund. Applications will only be accepted if made on a current
application form. An investment in the Fund is not a bank deposit and
distributions and the return of capital are not guaranteed. Past performance is
not an indicator of future performance. Any references to particular securities
or sectors are for illustrative purposes only and are as at the date of publication
of this material. This is not a recommendation in relation to any named
securities or sectors and no warranty or guarantee is provided that the
positions will remain within the portfolio of the Fund.
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