Alleron Investment Management Limited Monthly Report August 2016 Portfolio performance and attribution analysis Market commentary nounced strong passenger growth Global markets were mixed due to both domestically and internationally. Since Inception (Annualised) Month increased speculation of a US rate Portfolio commentary hike in September from strong em- Portfolio +10.452% +1.975% Positives: ployment numbers. The Bank of Eng- CWY - The CEO’s turnaround strat- Benchmark +7.145% -1.556% land eased monetary policy to 0.25%. egy is starting to take effect with The Australian milk powder and vita- Top 3 and bottom 3 performing stocks FY16 results showing improved mar- mins industry suffered shrinking vol- Top 3: Cleanaway Waste Management Ltd (CWY), Treasury Wine gins and cash flow. Estates Ltd (TWE), Mineral Resources Ltd (MIN). umes due to China’s recent tax on imported goods. Most currencies were Bottom 3: Monadelphous Group Ltd (MPL), Medibank Private TWE - The CEO’s branding strategy flat against the USD with the A$ and recent Diageo acquisition have Ltd (MPL), AMP Ltd (AMP). steady at US75 cents. Iron ore was delivered results ahead of schedule. steady at US$59 per tonne and oil Portfolio changes MIN - The share price rose in antici- rose to US$48 per barrel intra month pation of the first lithium shipment. Stocks joined or increased: before closing flat at US$43 due to oversupply concerns. Negatives: Navitas Ltd (+1.00%; Entry): An Australian education provider. MND - The outlook remains subdued University partnership segment has shown strong organic growth The Australian market underper- in Monadelphous’ traditional mining in both US and Australian markets. formed in reporting season, led by the big banks and Telstra. The RBA re- and energy markets as the company Commonwealth Bank Ltd (+1.00%; Entry): An Australian bank. duced interest rates from 1.75% to focusses on services and infrastruc- Retail banking, the company’s largest segment, has been growing 1.50%. Woodside reported solid first ture. strongly at a double digit pace. half cashflows with breakevens at MPL - The company’s priority will be US$9 a barrel. Fortescue delivered on the customer to reduce market Stocks Removed or Reduced: strong operating cash flow and C1 share losses. costs of US$13 in June 2016. Co- Mineral Resources Ltd (-1.50%): An Australian miner and mining AMP - The company’s wealth protec- chlear reported continued double digit services company. The share price has factored in the earnings tion continues to weigh down the growth with an increasing emphasis uplift from the Mt Marion lithium project. results of other successful segments. on customer engagement. Seek Westpac Banking Corporation (-0.50%): An Australian bank. Net showed growth in domestic and inter- Portfolio focus interest margin has been under increasing pressure and earnings national businesses and pledged fur- Alleron’s investment process focusses growth momentum is slowing. ther reinvestment to strengthen its on companies with a competitive market leading position in Australia. advantage and a developing organic AMP Ltd (-0.50%): A wealth management and financial services Nanosonics announced its first full growth profile. An investment will be provider. The company’s income protection business has struggled year profit and further R&D spend to made once an identified investment to overcome poor claims experience. develop new infection prevention trigger occurs. technology. Sydney Airport an- Current portfolio Top ten holdings Sector analysis Portfolio analysis: Stock 31/08/16 Industry Classification Weight Top 100 81.89% of fund Consumer Discretionary 6.83% National Australia Bank Ltd 5.76% Ex 100 16.27% of fund Consumer Staples 4.89% Resmed Inc 5.75% Energy 4.06% Sydney Airport Holdings Ltd 5.69% Financials 30.19% Cochlear Ltd 5.56% Healthcare 16.04% Seek Ltd 5.03% Industrials 21.10% Treasury Wine Estates Ltd 4.89% Information Technology 2.49% Rio Tinto Ltd 4.49% Materials 12.57% Fortescue Metals Group Ltd 3.73% Telecommunications 0.00% Cash 1.84% AMP Ltd 3.72% Total 100.00% Suncorp Group Ltd 3.71% Disclaimer: This communication is issued by Alleron Investment Management Limited ABN 71 109 874 160 AFSL 278856 Suite 402, Level 4, 71 Walker Street, North Sydney NSW 2060. This information does not constitute a recommendation, offer or solicitation to buy or sell any securities. It reflects Alleron's Model Portfolio at the end of the month stated and Alleron's views at the date of preparation. Both the Model Portfolio and Alleron's views are subject to change without notice. Past performance figures are no guarantee of future returns and exclude Alleron's fees. Date of preparation: 05 September 2016 .