The Income Fund gives our clients access to a diverse portfolio of fixed interest investments from around the globe. This fund combines our rigorous investment research with active portfolio management. As well as being an option to invest in this fund as part of a diversified investment strategy across our managed funds, this fund offers an alternative to bank deposits. Your money is invested throughout the world in a range of industries and sectors that are not available in Australasia, providing added diversification. Because this fund is designed to be a more conservative fund there are no investments in shares. You can also access your money at any time and there is a low minimum for investment.
Cash and fixed interest plays an important stabilising role in any investment portfolio. Think of it as something of a financial umbrella to offer your portfolio protection in difficult market conditions. This is because these types of investments are expected to offer more stable, though lower, returns over the long term.
The Fund holds a range of different investments, including corporate and Government bonds, as well as cash holdings. See below for more detail on these.
Long term interest rates across several key offshore markets dipped lower this month. This pushed bond prices higher, helping the Fund register a strong return.
In company news, Nike Inc reported very strong results for the year ended May 2021 with revenue increasing 19% which, in part, reflected a 64% increase in digital sales. While it is difficult to predict the lasting impact of the global pandemic, we do think the trend towards more online shopping will continue to increase. Nike is well placed to benefit from this. When coupled with its robust balance sheet, strong free cash flow, and globally recognised brand we believe this investment remains on a firm and improving path.
Sherwin Williams, a market leader in paints and coatings, also updated investors regarding its long-term strategic priorities which centre on providing unique solutions for customers through product innovation. The executive team increased the group’s sales growth expectation for 2021 while also remaining committed to a strong balance sheet. Owing to leading market positions and global scale, we expect the company to continue to generate strong free cash flow in the years ahead.
A lowlight this month was the fund’s position in Banca Monte dei Paschi di Siena, the Italian banking group. The bank continues to progress with plans to improve its capital position. But a series of local press reports generated uncertainty regarding this process. As long-term investors, we believe in looking through short term headlines that reveal no new material information. Given this, we have maintained our investment position as we believe the bank will improve its operating metrics and balance sheet over the coming years.
Senior Portfolio Manager
Senior Investment Anaylst
Senior Investment Analyst
Is there anything we
can help you with?