During February 2020 the Ethical Partners Australian Share Fund returned -6.89% versus the S&P/ASX 300 Accumulation Index of -7.76%, outperforming the market by 0.88%(after fees). Over the last quarter the Fund benefited from underweight positions in Property and Materials. Key detractors over the last quarter included an overweight position in both Financials and Consumer Discretionary an underweight position in Healthcare.
Ethical Partners’investment process continues to be focused on investing in sound businesses at conservative valuations. As a consequence of this around 40% of the companies currently in the portfolio have net cash balance sheets (or close to), all are producing solid cash flows and all are conservatively valued on an earnings (not sales)multiple or have a valuation based on hard assets. As a result we have not had to change the way we think about stocks or our portfolio positioning in response to equities markets selling off.
Owning interests in well run businesses that produce solid cash flows has stood the portfolio in good stead. It means that we have options during market volatility and are not holding companies that rely on equities markets to be orderly for them to be well financed. Knowing our companies well means that we can selectively add to existing positions or find new holdings during market volatility.
During October 2021 the Fund returned 1.09% versus the S&P/ASX 300 Accumulation Index of 0.10%, outperforming the market by 0.99%. An overweight position in Materials added to relative performance while and overweight position in Financials detracted from relative performance.
This World Children’s Day, 20 November, we recognise the devastating and disproportionate impact the climate crisis is having and will continue to have on children. As the most anticipated event of the year, COP26, finishes, it remains clear we have never needed more urgent action from government, business and society to respond to the climate crisis
During September 2021 the Fund returned -1.19% (after fees) versus the S&P/ASX 300 Accumulation Index of -1.89%, outperforming the market by 0.70%. An underweight position in Healthcare and an overweight position in Transport added to relative performance. Over the last 12 months the Fund has returned 36.03%, outperforming the ASX300 Accum Index by 5.17%.