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.
Seek Limited » |
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| 15% Share Price Change | 1.1% Contribution to Return |
Link Group » |
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| -21% Share Price Change | -1.0% Contribution to Return |
Ooh! Media » |
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| 12% Share Price Change | 0.6% Contribution to Return |
| Seek Limited | 7.8% |
| Carsales.Com Limited | 7.3% |
| CSL Limited | 7.2% |
| Cash | 3.8% |
| Top 10 holdings | 54.9% |
Against the backdrop of soft global equity markets, May was a solid month for the Australian Growth Fund and the ASX 200 both of which returned 2.0% in A$ during the month. The ASX responded positively to a surprise Federal Election victory by the Coalition which was seen as more market friendly in comparison to the Labour Party which had been favoured to win.
Growth Fund highlights included Aristocrat (+12.5% in A$) and Resmed (+11.5%) which reported results in the month. Aristocrat’s land-based gaming business demonstrated further evidence of growing share in key markets and delivered on market expectation in its digital gaming division. Resmed’s quarterly result included an earnings rebound in its international devices division allaying concerns after a soft result in the previous quarter.
Lowlights were led by Link Administration (-21.4%) which profit warned on the back of Brexit related softness in its UK division. Link also highlighted increased costs related to an earlier than anticipated implementation of new super fund legislation in Australia which has resulted in more work for Link and its customers. We think both these factors will prove to be transitory in nature.
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.
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