Realindex Australian Small Companies - Class A (Net of Fees) Factsheet
30 Nov 2019
Fund strategy Fund facts Realindex forms a universe of companies listed on the Australian Securities Exchange that are Benchmark ASX Small Ords Accum outside both the ASX 100 and the 100 largest companies based on accounting measures. Factors Funds under management $1196 million such as quality, near-term value and momentum are applied to form a final portfolio of companies. Inception Date 17 November 2008 The resulting portfolio has a value tilt relative to the benchmark and provides the benefits of being lower in cost, lower turnover and highly diversified compared to traditional active investment strategies. By weighting the portfolio based on accounting measures and factors such as quality, value and momentum Realindex aims to generate higher returns versus the benchmark over the long term.
Commentary The Realindex Australian Small Companies Fund returned +0.25% (net of fees) during November, versus the S&P/ASX Small Ordinaries benchmark which returned +1.56%.
The ASX 200 traded in line with global benchmarks throughout November, rallying 3.3% and reaching a record high of 6893.7; the Small Ordinaries was not as strong but still returned 1.6%. From a factor perspective, it was another inconsistent month with momentum and the more cyclical value factors struggling, whilst yield and low volatility worked well. The S&P Small Cap Australia Value (+1.7%) and Growth (+1.7%) performed in line with each other over the month.
The largest detractor from performance came from Consumer Discretionary, however this largely came from stock selection rather than the overweight allocation. In particular, the portfolio’s overweight to AP Eagers (-20.1%) which was weaker - but is still up almost 65% over 2019.
The strong performing Information Technology sector was also a headwind, primarily due to the underweight allocation. Key negative contributors were the underweights to index heavyweights Technology One (+25.9%), Appen (+12.0%) and NextDC (+3.1%), whilst not holding smallers names such as EML Payments (+19.7%) and Audinate Group (+22.1%) also detracted.
Financials also detracted value, more specifically, much of the performance was lost due to positioning within fund managers; specifically not holding Pendal (+19.7%), Janus Henderson (+14.5%) or IOOF (+6.1%). The portfolio does not hold Pendall or IOOF as both are considered a ‘large’ company according to its accounting measures, whilst Janus Henderson is domiciled in the UK, and only Australian or New Zealand domiciled stocks can be held in the portfolio. Overweights to Perpetual (+10.6%) and Platinum (+3.4%) did help to offset some of the losses.
The only meaningful sector contributor was Healthcare, again mainly due to stock selection. This included an overweight to Fisher & Paykel Healthcare (+17.7%) which jumped after reporting a strong 1H result and not holding Polynovo (-20.8%) or Clinuval (-8.1%).
The portfolio offers a valuation discount to the market-cap benchmark, as measured by price-to-sales (24.1% discount) and price-to-book (9.8% discount), as well as a dividend yield higher than the benchmark (30.6% premium).
Note: Percentage figures in parenthesis show total return in Australian dollars for the month ending 30 November 2019 unless otherwise noted.
Since Net performance (After fees, before tax) 1 month 3 month 6 month 1 year2 year 3 year 5 year 7 year 10 year inception Realindex Australian Small Companies - Class A 0.25% 2.80% 6.53% 18.32%7.68% 10.06% 12.84% 12.18% 8.95% 12.25% ASX Small Ords Accum 1.56% 3.68% 5.14% 16.62%7.10% 11.39% 10.81% 7.31% 4.60% 8.02% Excess NET returns -1.31% -0.88% 1.39% 1.70%0.57% -1.33% 2.03% 4.87% 4.35% 4.22% All returns are calculated on an annualised basis using exit price to exit price with distributions reinvested, net of management costs, transaction costs. All return calculations exclude any individual taxes payable by the investor and all other fees and rebates disclosed in the relevant product disclosure statements available on our website or by calling us.
Top 10 holding comparison ASX Small ASX Small as at 30 Nov 2019 Fund Ords Accum Active Weight Sector Holding comparison Fund Ords Accum Active Weight Super Retail Group Limited 2.03% 0.70% 1.33% Consumer Discretionary 19.52% 14.50% 5.01% A.P. Eagers Limited 1.82% 0.83% 0.99% Materials 16.40% 20.27% -3.87% Chorus Limited 1.76% 0.66% 1.10% Real Estate 16.17% 12.83% 3.34% Fisher & Paykel Healthcare Corporation Limited 1.69% 1.50% 0.19% Financials 9.23% 11.39% -2.16% Australian Pharmaceutical Industries Ltd 1.49% 0.26% 1.23% Communication Services 9.10% 4.92% 4.18% SKYCITY Entertainment Group Limited 1.48% 0.56% 0.92% Industrials 7.44% 8.12% -0.68% Growthpoint Properties Australia 1.40% 0.62% 0.78% Health Care 6.92% 8.05% -1.13% Premier Investments Limited 1.39% 0.95% 0.43% Consumer Staples 6.52% 7.57% -1.05% Cromwell Property Group 1.34% 1.17% 0.18% Information Technology 5.27% 8.99% -3.72% Event Hospitality & Entertainment Ltd. 1.32% 0.00% 1.32% Energy 2.60% 3.03% -0.43% Utilities 0.83% 0.32% 0.51%
Top 5 relative contributors for the month Value added Top 5 relative detractors for the month Value lost Nufarm Limited 0.17% A.P. Eagers Limited -0.26% Polynovo Limited 0.17% OceanaGold Corp Shs Chess Depository Interests repr 1 shs -0.21% Saracen Mineral Holdings Limited 0.14% CSR Limited -0.18% Chorus Limited 0.13% BT Investment Management Limited -0.16% Lynas Corp Ltd 0.08% Technology One Limited -0.15%
Contact To find out more, please contact us on 1300 809 204 or email [email protected]. Disclaimer This information has been prepared and issued by Colonial First State Managed Infrastructure Limited (ABN 13 006 464 428, AFSL 240550) (CFSMIL). It is directed at persons who are professional, sophisticated or wholesale clients and has not been prepared for and is not intended for persons who are retail clients. A copy of the Financial Services Guide for CFSMIL is available from Colonial First State Global Asset Management on its website. This material contains general information only. It is not intended to provide you with financial product advice and does not take into account your objectives, financial situation or needs. Before making an investment decision, you should consider, with a financial adviser, whether this information is appropriate in light of your investment needs, objectives and financial situation.
The product disclosure statement (PDS) and Information Memorandum (IM) for the Realindex Australian Share Fund, (ARSN 132 950 433), Realindex Australian Small Companies Fund, (ARSN 132 950 175), Realindex Global Share Fund, (ARSN 132 951 083), Realindex Global Share Hedged Fund, (ARSN 132 951 467), Realindex Global Share Fund (Screened), (ARSN 604 604 873), Realindex Enhanced Equal Weighted Global Share Fund, (ARSN 149 308 976), Realindex Emerging Markets Fund, (ARSN 140 973 075) (Fund(s)), issued by Colonial First State Investments Limited (ABN 98 002 348 352, AFSL 232468) (CFSIL), should be considered before deciding whether to acquire or hold units in the Fund(s). The PDS or IM are available from Colonial First State Global Asset Management which is the trading name for Colonial First State Asset Management (Australia) Limited (ABN 89 114 194 311, AFSL 289017) (CFSAMA). Realindex Investments Pty Ltd ABN 24 133 312 017, AFSL 225281 (Manager) is the investment manager of the Fund as at the date of issue of this material.
MUFG, the Commonwealth Bank of Australia (Bank) and their respective affiliates do not guarantee the performance of the Fund(s) or the repayment of capital by the Fund(s). Investments in the Fund(s) are not deposits or other liabilities of MUFG, the Bank nor their respective affiliates, and investment-type products are subject to investment risk including loss of income and capital invested. CFSMIL, CFSAMA and the Manager are members of MUFG, a global financial group. CFSIL is a subsidiary of the Bank.
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Total returns shown for the Fund(s) have been calculated using exit prices after taking into account all ongoing fees and assuming reinvestment of distributions. No allowance has been made for taxation. Past performance is no indication of future performance.
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