Airlie Australian Share Performance Review | News

What is the Airlie Australian Share fund?

Airlie Australian Share aims to provide long-term capital growth and regular income through investment in Australian equities.

Long only, bottom up specialized and focused Australian equities fund.
Concentrated portfolio of 15-35 stocks (target 25).
Active, high conviction approach – Airlie’s ‘best ideas’

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Growth of $1000 Investment Over Time

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Latest News & Updates For Airlie Australian Share

Airlie Australian Share Fund Commentary September 30, 2023

The Fund rose 1.6% for the quarter, which represented outperformance of 2.4% vs the S&P/ASX 200 benchmark return of -0.8%. While we wrote about the value we saw in discretionary retail names in our investor letter for the June quarter, we were surprised by the speed of the rerate, with portfolio holdings Premier Investments (+22%), Nick Scali (+23%) and Wesfarmers (+7%) amongst our best performing holdings in the quarter. We consider that the consumer discretionary sector remained remarkably resilient in the face of 12 consecutive interest rate hikes from the RBA. While for the last four halves, this resilience has been accompanied by commentary of “sure it’s resilient now, but the slowdown is coming!”, we remain of the view that the balance sheets and differentiated positioning of our portfolio holdings put them in a strong place to navigate the most anticipated downturn of all time when it arrives.

Other contributors include Seven Group (+23%), with a FY23 result highlighting the strength of WesTrac and Coates’s market position and end-markets, as well as News Corp (+8%), where tight cost management offset some anticipated weakness in advertising and circulation. Pleasingly, the tilt of the Dow Jones business to more of a subscription-led and professional services focus is taking hold, and we expect this to continue as Rupert Murdoch officially steps down as Chairman.

On the other side of the equation, detractors to the portfolio include all REIT exposures, with Charter Hall Group (-11%), Waypoint REIT (-8%) and Region Group (-10%) underperforming as rates rose and occupancy softened, particularly in the Office sector. We continued to add to our Charter Hall Group (CHC) position as it underperformed the REIT sector. Our view is that CHC faces near-term headwinds to AUM growth due to rising interest rates, which are resulting in devaluations as well as reduced transaction activity as buyers and sellers wait for rates to peak to know where to transact. There is uncertainty on how long it could take for these factors to resolve. However, we consider CHC is fundamentally cheap at 12.6x FY24 EPS guidance (vs ~17x historical average); we believe FY24 represents trough earnings as it consists mostly of the recurring fee streams and has minimal transaction and performance fees. While there are valid concerns around the Office sector more broadly, we would note it only accounts for ~34% of CHC’s overall FUM with the balance allocated to Industrial and Logistics (~28%), Retail (~16%), Listed Equities (~18%) and Social Infrastructure (~4%). CHC’s Office Portfolio consists of high-quality tenants in good assets as reflected by the 96% occupancy and 89% retention rate on new leasing transactions in FY23.

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Product Snapshot

Product Overview
Performance Review
Peer Comparison
Product Details

Product Overview

Fund Name	APIR Code ? A Product Code is unique a identifier code issued by a group or governing body, to reference products in a large group. For an example, APIR codes are commonly used for Funds and Ticker codes are commonly used for Securities such as ETFs and Stocks.	Structure ?	Asset Class ? An Asset Class breakdown provides the percentages of core asset classes found within a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and beyond) generally refer to broad categories such as equities, fixed income, and commodities.	Asset Category ? An Asset Category is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset categories (or a sub-asset class) are made up of instruments which often behave similarly to one another in the marketplace, looking down to the Asset Category level is important if looking to build a diversified portfolio.	Peer Benchmark Name ? A Peer Index (benchmark) refers to a peer group of investment managers who have the same investment style or category. It is used to compare the performance of one manager to their peer group, which makes it simpler for investors to choose between the vast number of investment managers.	Broad Market Index ? A Market Index (benchmark) refers to a hypothetical portfolio of investments that represents a segment, asset or category of an investable market. Market Indices are used to benchmark managers performance, to assist their style reliability and ability to provide excess returns.	FUM ? Funds/Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.	Management Fee ? A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting finanical products and managing the portfolio.	Performance Fee ? A performance fee is a payment made to an investment manager for generating positive returns. This is as opposed to a management fee, which is charged without regard to returns. A performance fee can be calculated many ways. Most common is as a percentage of investment profits, often both realized and unrealized. It is largely a feature of the hedge fund industry, where performance fees have made many hedge fund managers among the wealthiest people in the world.	Spread ? A spread can have several meanings in finance. Basically, however, they all refer to the difference between two prices, rates or yields. In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity. This is known as a bid-ask spread.
Airlie Australian Share	MGE9705AU	Managed Funds	Domestic Equity	Australia Large Value	Domestic Equity - Large Value Index	ASX Index 200 Index	45.00 M	0.78%	0.00%	0.28%

Performance Review

Fund Name	Last Month ? Returns after fees in the most recent (last) month).	3 Months Return ? Returns after fees in the most recent 3 months.	1 Year Return ? Trailing 12 month returns.	3 Years Average Return ? Average Annual returns from the last 3 years.	Since Inc. Average Return ? Average (annualised) returns since inception	1 Year Std. Dev. (Annual) ? The standard deviation (or annual volatility) of the last 12 months.	3 Years Std. Dev. (Annual) ? The average standard deviation (or annual volatility) from the last 3 years.	Since Inc. Std. Dev. (Annual) ? The average standard deviation (or annual volatility) since the fund inception.	1 Year Max Drawdown ? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.	3 Year Max Drawdown ? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.	Since Inc. Max Drawdown ? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Airlie Australian Share	7.46%	8.96%	15.38%	12.08%	10.66%	13.22%	14.29%	15.93%	-7.23%	-16.31%	-23.8%

Peer Comparison

Fund Name	Peer Index Name ? A group of individuals who share similar characteristics and interests are called peer groups. Peer group analysis is an essential part of assessing a price for a particular stock in investment research. The emphasis here is on making a comparison, meaning that the peer group constituents should be more or less identical to the company being examined, especially in terms of their main business and market capitalization areas.	12 Months Excess Return ? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.	Excess Return Annualised Since Inception ? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.	12 Months Alpha ? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over 12 months. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.	Alpha Annualised Since Inception ? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market annualized since inception. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.	12 Months Beta ? Rolling 12Month Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).	Beta Annualised Since Inception ? Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).	12 Months Tracking Error ? 12Month Tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark over the last 12 months. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.	Tracking Error Since Inception ? Since Inception tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark since inception. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.	12 Months Correlation ? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.	Correlation Since Inception ? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Airlie Australian Share	Domestic Equity - Large Value Index	5.87%	3.12%	0.41%	0.29%	0.29%	1.17	4.96%	4.95%	0.94	0.95

Product Details

Fund Name	Verifed by SMSF Mates	Manager Address	Phone	Website	Email
Airlie Australian Share	Yes	MLC Centre, Level 36, 19 Martin Place, Sydney NSW 2000	612 9235 4888	https://www.magellangroup.com.au/	-

Product Due Diligence

What is Airlie Australian Share

Airlie Australian Share is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Large Value Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Airlie Australian Share has Assets Under Management of 45.00 M with a management fee of 0.78%, a performance fee of 0.00% and a buy/sell spread fee of 0.28%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the Airlie Australian Share has returned 7.46% in the last month. The previous three years have returned 12.08% annualised and 15.93% each year since inception, which is when the Airlie Australian Share first started.

How is risk measured in this investment product?

There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Airlie Australian Share first started, the Sharpe ratio is 0.64 with an annualised volatility of 15.93%. The maximum drawdown of the investment product in the last 12 months is -7.23% and -23.8% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.

What is the relative performance of the investment product?

Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Airlie Australian Share has a 12-month excess return when compared to the Domestic Equity - Large Value Index of 5.87% and 3.12% since inception.

Does the investment product produce Alpha over its Peers?

Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Airlie Australian Share has produced Alpha over the Domestic Equity - Large Value Index of 0.41% in the last 12 months and 0.29% since inception.

What are similar investment products?

For a full list of investment products in the Domestic Equity - Large Value Index category, you can click here for the Peer Investment Report.

What level of diversification will Airlie Australian Share provide?

Airlie Australian Share has a correlation coefficient of 0.95 and a beta of 1.17 when compared to the Domestic Equity - Large Value Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.

How do I compare the investment product with its peers?

For a full quantitative report on Airlie Australian Share and its peer investments, you can click here for the Peer Investment Report.

How do I compare the Airlie Australian Share with the ASX Index 200 Index?

For a full quantitative report on Airlie Australian Share compared to the ASX Index 200 Index, you can click here.

Can I sort and compare the Airlie Australian Share to do my own analysis?

To sort and compare the Airlie Australian Share financial metrics, please refer to the table above.

Has the Airlie Australian Share been independently verified by SMSF Mate?

This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.

How can I invest in Airlie Australian Share?

If you or your self managed super fund would like to invest in the Airlie Australian Share please contact MLC Centre, Level 36, 19 Martin Place, Sydney NSW 2000 via phone 612 9235 4888 or via email -.

How do I get in contact with the Airlie Australian Share?

If you would like to get in contact with the Airlie Australian Share manager, please call 612 9235 4888.

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the Airlie Australian Share. All data and commentary for this fund is provided free of charge for our readers general information.

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Historical Performance Commentary

Performance Commentary - June 30, 2023

Performance Commentary - March 31, 2023

Over the quarter the performance of portfolio companies reflected the macro influences of strong performance from USA exposed cyclicals – Aristocrat, Reece, and James Hardie – as a potential pause in rate hikes would benefit the housing market. Meanwhile the poorer-performing portfolio holdings were mostly interest-rate sensitives – Charter Hall, Macquarie, NAB, and CBA – which also fell on worries of banking contagion and commercial real estate exposure.

Performance Commentary - January 31, 2023

Performance Commentary - December 31, 2022

The Airlie Australian Share Fund rose 8.7% for the quarter, underperforming the ASX200 index by 0.7% net of fees. Contributors to performance included PWR Holdings and EBOS Group. EBOS Group is Australia’s largest pharmacy wholesaler, and also owns a pet food business and distributes medical devices. We recently attended EBOS’ investor day in Melbourne in November, which coincided with the company’s 100th year of corporate history. We’d always put EBOS in the “under the radar” camp, a quietly-achieving company with a really solid track record of returns and earnings growth. However the very well-attended investor day, and subsequent strong performance of the share price over the quarter (+18%) has made it clear to us that this stock is very much on the radar, possibly over the radar. We have trimmed our position on valuation grounds, however it remains a core holding.

Our two largest detractors for the quarter were James Hardie and Medibank Private. While we were aware that we were effectively “taking the cycle on” in investing in James Hardie as the US housing market turned, we felt the valuation compensated for this. We also believed a sizeable backlog of activity would delay the coming earnings decline. We got this last part wrong, and were surprised by the speed with which a decline in new housing activity is being felt within the Hardie’s business, as evidenced by the November earnings downgrade. That said, after a 10% share price drop in the quarter, we feel the narrative of a sharp decline in US housing activity is factored into the current share price (if not consensus estimates which still look stubbornly high to us).

The cyber incident at Medibank Private totally sideswiped us, as is the nature of these incidents. However, the strength of the balance sheet (net cash and with surplus capital), and favourable underlying trends in private health insurance gave us conviction to add to our positions while the headlines were very ugly. While it remains to be seen how many people switch as a result of the cyber incident, in our minds inertia is a powerful force.

Performance Commentary - September 30, 2022

The Airlie Australian Share Fund rose 4.15% in the September quarter, an excess return of 3.76% after fees vs the S&P ASX200 index, which returned 0.39%. The flat performance of the benchmark belies another extraordinarily volatile quarter for equity and debt markets- the ASX200 traded a 20% high/low range, whilst the Australian 10-year government bond traded in a 106bp range.

Overall, the portfolio saw a sizeable rebound for most holdings from the very weak June quarter. Key portfolio moves include:

A big quarter for lithium as the market re-rated all names due to prolonged strong pricing for spodumene and lithium hydroxide. Portfolio holding Mineral Resources (+36%) also benefited from a mooted potential spin-out of its lithium assets into a separate vehicle.

PWR Holdings rose 35% in the quarter, with a cracking FY22 result highlighting incredible growth in the emerging technologies division.

Consumer discretionary stocks in the portfolio rebounded strongly led by Premier Investments (+17%) – as it reported a strong 2H22 profit result. Nick Scali (+12%) and Wesfarmers (+2%) also produced very solid profit results. Consumer spending has been remarkably resilient despite the rapid increase in mortgage rates. Obviously, this is not expected to last, however the rebound over the quarter shows what can happen when results are ‘less bad’ than expected.

Performance Commentary - June 30, 2022

The Airlie Australian Share Fund fell 14.5% in the June quarter whilst the benchmark (the S&P ASX 200 Index) was down 11.9%. A disappointing quarter for the Fund. Historically we’d expect to outperform in such a hefty down market given our focus on financial strength and business quality – attributes that usually prove resilient in times of market stress. However, our underweight in the Energy sector and overweight in Consumer Discretionary caused the underperformance. Despite being on the wrong side of the current ‘macro’ influences we can make a solid case for all our individual portfolio holdings.

Performance Commentary - March 31, 2022

The Airlie Australian Share Fund (‘Fund’) fell 2.1% over the March quarter while the benchmark (the S&P/ASX 200 Accumulation Index) was up 2.2%. For the 12 months to March 2022, the Fund returned +20.6% (after fees) versus the benchmark’s rise of 15.0%. For the March 2022 quarter, being underweight resources, particularly energy, was a major cause of the divergence between fund performance and benchmark.

The best performing stocks in the Fund included:
• BHP (+25%) – Due to strong iron ore, copper, and oil prices. Also, positive index effects of unification of the company’s Australian and UK registers.
• PWR Holdings (+10%) – Solid profit result and outlook.
• National Australia Bank (+12%) – Turnaround of the franchise continues. Solid asset growth and margin outcomes.
• Northern Star (+14%) – Gold price rally on the invasion of Ukraine.

For the quarter the portfolio holdings that detracted were:
• James Hardie Industries (-27%) – Fears of the super cycle in US housing coming to a rapid end as mortgage rates shift higher.
• Aristocrat Leisure (-16%) – Fears of a looming recession in the US as the Fed hikes rates to combat inflation.
• Nick Scali Furniture (-26%) – Reversal from previous strong quarter as slowdown in consumer spending expected.
• Mineral Resources (-6%) – Disappointing 1H22 profit result due to higher costs in the iron ore business.

Airlie Australian Share (MGE9705AU) Report & Performance