The Australian Growth Fund gives you access to invest in quality, growing Australian businesses. The Australian market is deeper and broader than in New Zealand, which provides numerous opportunities to invest in great businesses. Being such a broad market with so many investment opportunities means some companies are often poorly researched and not well understood by the market. The outcome of this is that high quality companies can trade below their inherent value. Our team making investment decisions are well informed and spend their time conducting their own research on this market.
There is a lot of diversity in the products and services that companies in the Australian market offer. Because of the population size,the growth path for Australian companies can be smoother than in New Zealand. This is important as it provides these companies a broader growth opportunity domestically, before they need to consider the challenging step of exporting their business model to chase growth.
|Commonwealth Bank of Australia||5.50%|
|-12% Share Price Change||-0.80% Contribution to Return|
|11% Share Price Change||0.60% Contribution to Return|
|-10% Share Price Change||-0.40% Contribution to Return|
In the portfolio holdings below you will find a diverse range of companies. Some of these will be brands you know well, and others may be new to you. The companies we invest in range from banks and fast food brands, to companies in the healthcare and tech sectors.
The Australian Growth Fund returned +4.5% (net) in June. This compares to a +2.6% return for the ASX 200 Index (70% hedged into NZ$).
Resmed’s (+20.8%) share price rose strongly as it stands to benefit from the problems encountered by its key competitor, Philips. Philips announced a recall of a key product used to treat sleep disordered breathing because the foam Philips uses in the product degrades and potentially impacts patients’ health. Resmed does not use the same foam in its devices. It therefore stands to gain market share in the near term as Resmed’s products will likely fill the void in the market created by the Philips recall.
Having risen strongly over the previous few months, the share prices of three of our Australian banks gave back some of this in June, with NAB (-2.7%), Westpac (-2.3%) and ANZ (-2.0%) all falling in the month. Gobally, financials had a softer month in equity markets. The Australian banks were also impacted by negative sentiment affiliated with broadening COVID related lockdowns across NSW and other states. The banks are well positioned to weather the negative impacts of these lockdowns.
Senior Portfolio Manager
Senior Investment Analyst
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