A clear trend in first half FY21 results season was that companies with higher revenue and profit growth expectations generally underperformed following their result. This included sectors such as Consumer Discretionary, Healthcare, Building and Construction and Technology. The market is currently looking through short term strength in profits and considering if the current valuation levels are sustainable in the medium term. The converse was true of companies with lower growth expectations and companies in the Banking, Telecommunications and Resources sectors outperformed post reporting. The market is currently looking through short term weakness in earnings if companies have the ability to recover with economic growth returning, aided by the roll out of vaccinations and continuing government stimulus. Rising bond yields remained a feature with the US 10 year yield rising more (in percentage terms) since January 2021 than it did during the whole of 2018 when the Federal Reserve was actually increasing rates.
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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).