Over the last quarter eight out of ten of our largest overweight positions outperformed including our two largest overweight positions at 31 December 2019; Bega Cheese(+30.6% out performance YTD) and Graincorp (+22.2% outperformance YTD) that were operating at bottom of the cycle conditions (and valuations) for much of the last year but are now seeing improving conditions even amidst the current downturn. With respect to industry sectors the Fund benefited from overweight positions in Consumer Staples and Financials (namely Health Insurance) and an underweight position in Banks. Key detractors over the last quarter included an overweight position in both Consumer Discretionary (namely Services and Retail)and an underweight position in Healthcare.
The Fund’s characteristics of lower leverage (debt) and higher cash flow than the overall market proved more resilient with respect to performance, without performance for the month near the market low for the month on 20 March peaking at +1.78%. With the market rallying +11.8% in the last six trading days of the month, the outperformance fell away but we believe our conservative positioning and focus on strong company fundamentals will again assist in weak markets as we look forward.
Full report attached.
While the response to climate change risk by regulators, financial institutions and publicly listed companies is welcome, it currently is not enough to ensure a safe climate. This submission provides a comprehensive assessment of the current risks relating to Australia's key export sectors.
It is estimated that 100 pairs of hands touch your clothes before they arrive in your wardrobe. That’s 100 people at risk of modern slavery, poor working conditions, and exploitation. Ethical Partners has recently signed the Investor Statement in Support of the maintenance and expansion of the Bangladesh Accord.
During March 2021 the Fund returned 3.07% versus the S&P/ASX 300 Accumulation Index of 2.30%, outperforming the market by 0.77%. An overweight position in consumer staples and an underweight position in materials contributed to relative performance while an overweight position in financials and an underweight position in consumer discretionary detracted from relative performance. The Fund is +20% over the last six months.
Globally, 15% of the population are persons with disabilities. The labor force participation rate globally for people with disabilities sits at 32.8% compared to 77.1% for those without disabilities. We believe it is imperative that investors use their shareholder voice to raise the awareness of this important diversity issue and help companies to improve their inclusion.