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.
|36% Share Price Change||1.7% Contribution to Return|
ARB Corporation Limited
|37% Share Price Change||1.1% Contribution to Return|
|13% Share Price Change||1.0% 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 rose +6.1% in August, well ahead of the +3.4% return for the ASX 200 Index (70% hedged into NZ$).
Strong financial results in August’s earnings season drove oOH!Media (+37.3% in A$), ARB Corp (+37.1%) and Wisetech’s (+36.5%) share prices higher. oOH!Media alleviated concerns over its balance sheet strength by substantially reducing its debt through cost control and strong cash collections in the past few months. Wisetech’s outlook for 2021 pointed to accelerating demand for its core software products. With its foundations well established, it signalled a reduced appetite for acquisitions in the future which was well received by the market. ARB ended the year with record monthly sales in June and July, assisted by stimulus induced consumer spending.
Two of our highest quality businesses, Resmed (-13.7%) and Seek (-4.6%) were the portfolio’s laggards in August. Both companies reported credible financial results. In both cases, the outlook commentary pointed to a more subdued pace of earnings growth than the market was expecting.
Senior Portfolio Manager
Senior Investment Analyst
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