During the year the portfolio found attractive investment opportunities across a wide variety of companies and industries from Lithium & Copper to Insurance Broking, Agriculture and Pathology testing. Being underweight expensive Tech and Healthcare names also contributed to relative performance.
While the market worried about slowing macro growth and stagflation during the year we remained focused on the prospects for individual companies with strong fundamentals, robust ESG credentials and we maintained our strong valuation discipline. This saw the Fund benefit from carrying large overweight positions in companies whose prospects were improving from a cyclical low point or where our profit forecasts were ahead of market expectations.
At the same time we avoided stocks with expensive valuations (namely Tech and Healthcare) or a low prospect of making a profit, the latter being the hardest hit in terms of their share prices in recent months. Detractors from portfolio performance included TPG Telecom (where the proposed merger benefits are manifesting slower than anticipated), IAG Limited (where natural perils and accident frequency continue to be worse than expected) and Platinum Asset Management (where performance has not delivered in this stage of the cycle and flows have not improved despite a major competitor experiencing a tough period).
Download the report for information on key stock selections and our ESG priorities for 2022
During February 2022 the Fund returned 1.87% versus the S&P/ASX 300 Accumulation Index of 2.09%, underperforming the market by 0.21%. Over the past 12 months the Fund has returned 14.7%, outperforming its benchmark by 4.45% (after fees).