Antares Prof Dividend Builder (PPL0002AU) Report & Performance

What is the Antares Prof Dividend Builder fund?

Antares Prof Dividend Builder’s primary objective is to regularly deliver higher levels of dividend income on a tax effective basis than the Benchmark. The Fund’s other objective is to achieve moderate capital growth in a tax effective manner over a rolling 5 year period. The Fund is an actively managed Australian share fund which aims to deliver regular dividend income and to achieve moderate capital growth by investing in a diversified portfolio of Australian companies. Antares’ strategy is to invest in a diversified portfolio of high yielding Australian companies that aim to grow their dividends over time, with an emphasis on securing franked income and minimizing portfolio turnover to keep net realized capital gains low.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For Antares Prof Dividend Builder

Antares Prof Dividend Builder Fund Commentary September 30, 2023

The Australian market was not exempt from the decline in global shares. The Real Estate and Information Technology sectors led the market declines given concerns about the impact of higher interest rates for longer. Healthcare and Consumer Discretionary sectors were sold down on worry about the consumer’s ability to tolerate higher inflation and interest rates. The Resources sector proved more resilient given the surprising rise in iron ore prices to US$120 per ton despite a weak Chinese property sector. The only positive sector was Energy on the back of higher oil prices.

The annual distribution return to 30 September 2023 for the Antares Dividend Builder Fund was 5.3%. The fund delivered a total return of -2.2% (net of fees) for the month of September which compared to a decline of 2.8% for the S&P/ASX200 Total Return Index. Dividends were received from APA Group, Aurizon, BHP, CBA, IAG, Suncorp, Telstra, The Lottery Corporation, Viva Energy and Woodside during the month.

Contributing to the Fund’s outperformance were overweight holdings in Suncorp (SUN), Ventia Services (VNT) and Nine Entertainment (NEC). SUN’s share price enjoyed a good September as the market favoured insurance companies and their favourable pricing environment in which they have been able to put through substantial premium increases. SUN’s AGM was also held during the month and was generally upbeat about the company’s prospects, and optimistic about the sale of its banking business to ANZ. VNT delivered a good half year result and is expected to produce a FY result at the top end of the company’s guidance range. Also positive for VNT’s share price was the further sell down of stock by former majority owners CIMIC and Apollo which have reduced their combined holding to less than 12%. NEC shares performed relatively well as the company continued with its share buyback program.

Detracting from performance were overweight positions in Orora (ORA) and The Lottery Corporation (TLC) together with not owning Fortescue Metals (FMG). Early in September, ORA announced the acquisition of global high end wine and spirits glass bottles producer Saverglass for A$2.1bn. Simultaneously it announced it would partially fund this via proposed A$1.3bn institutional and retail equity raisings. TLC’s share price has continued to slip on no particular news. Despite widespread concern about the Chinese property market, the iron ore price rose during September and was reflected in the FMG share price.

Australia’s economy continues to display significant signs of slowing down with inflation concerns. Retail spending is subdued as consumers struggle with the squeeze from higher prices, rising mortgage interest rates and rents. Consumer annual inflation rose from 4.9% in July to 5.2% in August largely on the back of higher fuel prices according to the ABS monthly indicator. Employment has been a positive surprise with strong job gains in August despite lower vacancies. The Reserve Bank again held the cash interest rate steady at 4.1% but maintained guidance that further interest rate rises may be required to get inflation back to their target range of 2% to 3%.

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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.
Antares Prof Dividend BuilderPPL0002AUManaged FundsDomestic EquityAustralia Large ValueDomestic Equity - Large Value IndexASX Index 200 Index130.46 M0.6%0.00%0.31%

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.
Antares Prof Dividend Builder0.26%-0.44%10.96%8.08%7.33%9.48%10.98%13.65%-6.39%-9.25%-45.18%

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.
Antares Prof Dividend BuilderDomestic Equity - Large Value Index0.55%-0.03%NA%NA%NA%0.912.28%4.09%0.980.96

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
Antares Prof Dividend BuilderYes105-153 Miller Street North Sydney, NSW 2060 Australia+61 03 8634 4721https://www.mlc.com.au/-

Product Due Diligence

What is Antares Prof Dividend Builder

Antares Prof Dividend Builder 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 Antares Prof Dividend Builder has Assets Under Management of 130.46 M with a management fee of 0.6%, a performance fee of 0.00% and a buy/sell spread fee of 0.31%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the Antares Prof Dividend Builder has returned 0.26% in the last month. The previous three years have returned 8.08% annualised and 13.65% each year since inception, which is when the Antares Prof Dividend Builder 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 Antares Prof Dividend Builder first started, the Sharpe ratio is NA with an annualised volatility of 13.65%. The maximum drawdown of the investment product in the last 12 months is -6.39% and -45.18% 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 Antares Prof Dividend Builder has a 12-month excess return when compared to the Domestic Equity - Large Value Index of 0.55% and -0.03% 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. Antares Prof Dividend Builder has produced Alpha over the Domestic Equity - Large Value Index of NA% in the last 12 months and NA% 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 Antares Prof Dividend Builder provide?

Antares Prof Dividend Builder has a correlation coefficient of 0.96 and a beta of 0.91 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 Antares Prof Dividend Builder and its peer investments, you can click here for the Peer Investment Report.

How do I compare the Antares Prof Dividend Builder with the ASX Index 200 Index?

For a full quantitative report on Antares Prof Dividend Builder compared to the ASX Index 200 Index, you can click here.

Can I sort and compare the Antares Prof Dividend Builder to do my own analysis?

To sort and compare the Antares Prof Dividend Builder financial metrics, please refer to the table above.

Has the Antares Prof Dividend Builder 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 Antares Prof Dividend Builder?

If you or your self managed super fund would like to invest in the Antares Prof Dividend Builder please contact 105-153 Miller Street North Sydney, NSW 2060 Australia via phone +61 03 8634 4721 or via email -.

How do I get in contact with the Antares Prof Dividend Builder?

If you would like to get in contact with the Antares Prof Dividend Builder manager, please call +61 03 8634 4721.

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the Antares Prof Dividend Builder. 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 - August 31, 2023

Australian shares disappointed in August with a mild decline given concerns over China’s prospects as well as the Australian consumer. The Utilities and Consumer Staples sectors led the market declines given concerns about the consumer’s ability to absorb higher electricity & gas prices as well as rising mortgage interest rates and rents. Information Technology declined in line with a more cautious view after their recent strong gains. Despite a rebound in the iron ore price to above US$110 per ton, the Resources sector posted a -1.8% negative return with concerns over China’s prospects. There were some positives with surprisingly strong gains for Consumer Discretionary and Real Estate on hopes that the Reserve Bank has ceased raising interest rates.

August is also reporting season for most Australian companies and while results were largely in line with expectations, the prospect of rising costs and a slowing economy saw reasonably soft guidance for the FY24 year which flowed through to earnings downgrades.

The annual distribution return to 31 August 2023 for the Antares Dividend Builder Fund was 5.4%. The fund delivered a total return of -1.6% (net of fees) for the month of August which compared to a return of -0.7% for the S&P/ASX200 Total Return Index. Dividends were received from Metcash, Region and Transurban during the month.

Contributing to the Fund’s performance was an overweight Medibank Private (MPL) holding and decisions not to own Resmed (RES) or Wisetech (WTC). MPL delivered a strong profit result for FY23 and a higher dividend. As well as a boost to investment income, the company reported an increase in net policy holders which it attributed to its customer focus. RES’ 4Q result was below market expectations, driven by lower margins and higher costs. There is also some concern that the increased use of Ozempic for weight loss could reduce the prospect of sleep apnoea and subsequent demand for RES’ machines.

Performance Commentary - July 31, 2023

Australian shares made strong gains on lower inflation and hopes that China will pursue more stimulatory policy settings. The energy sector led the market gains as oil prices surged. Financial shares also rebounded with optimism that the Reserve Bank interest rate hiking cycle was coming to an end. Information Technology continued to perform well, fuelled by the mania for AI related shares. Resources shares gained on China stimulus hopes. But there was some weakness in the Consumer Staples and Health Care sectors given concerns that the Australian consumer is struggling.

The annual distribution return to 31 July 2023 for the Antares Dividend Builder Fund was 5.6%. The fund delivered a total return of 3.5% (net of fees) for the month of July which compared to a return of 2.9% for the S&P/ASX200 Total Return Index. Dividends were received from ANZ, CSR and NAB during the month.

Sector allocation Contributing to the Fund’s performance were overweight holdings in CSR and Nine Entertainment (NEC) as well as an underweight holding in CSL. CSR shares benefitted as sentiment towards building product manufacturers has become more positive on expectations that the housing market appears to have bottomed.

Despite weaker ad market data, NEC shares rallied in July in line with the broader consumer discretionary sector ahead of August reporting season as investors are increasingly pricing in a soft landing. CSL’s share price has continued to languish since issuing disappointing FY24 guidance in June following news that margin recovery in its Behring plasma collection division would take longer than the market expected.

Detracting from performance were overweight holdings in Ventia Services (VNT), Aurizon (AZJ) and Telstra (TLS). VNT shares were relatively weaker in July, having performed strongly over the past months. This was despite being included in the S&P/ASX200 from 24 July. AZJ shares finished the month weaker. Late in the month the company held an investor day where it provided FY23 EBITDA guidance towards the bottom end of its previous target range of $1.42-1.47bn due to the impact of wet weather, production issues and labour shortages. In addition, the company provided FY24 EBITDA guidance of $1.59-1.68bn. At the investor day, Aurizon announced bullish FY30 targets for its Bulk business and containerised freight strategy, which the market is not yet giving the company credit for as it is early days on execution. Having earlier enjoyed investor support on news of its post-paid mobile price increases, TLS shares lagged the broader market in July. During the month, its rival Optus announced it had struck a deal with Elon Musk’s Starlink for Mobile to Satellite services. This increases Optus’ coverage which has always been one of TLS’ competitive advantages. This followed the previous month’s decision by the Australian Competition Tribunal to disallow TLS’ proposed network sharing agreement with TPG.

Performance Commentary - June 30, 2023

Australian shares made mild gains in June given signs that inflation pressures were abating and hopes that China will pursue more stimulatory policy settings.

The Resources sector surged on China growth hopes with strong gains in iron ore prices. The Information Technology sector also made strong gains on the back of investors’ enthusiasm for anything remotely connected with AI. Financials rebounded, reversing May’s weakness with signs of resilience in the Australian economy mitigating credit risks. Healthcare was weak as investors became more cautious about the sector’s prospects.

The annual distribution return to 30 June 2023 for the Antares Dividend Builder Fund was 5.6%. The fund delivered a total return of 2.3% (net of fees) for the month of June which compared to a return of 1.8% for the S&P/ASX200 Total Return Index. Dividends were received from Aurizon, CBA, Region, Westpac and Woodside Energy during the month.

Contributing to the Fund’s performance was an underweight CSL holding and overweight positions in Ventia Services (VNT) and Aurizon (AZJ). CSL provided a trading update indicating currency headwinds would impact its FY23 result. More significantly it noted margin recovery in its Behring plasma collection division would take longer than the market expected, as both donor fees and labour cost inflation remain higher than anticipated. This meant that CSL’s FY24 guidance was below consensus and the stock was sold down. In June, VNT continued to win new business and extend its existing contracts. We have liked VNT for its contract risk management processes and its exposure to contracts in relatively economically insensitive areas, such as defence. AZJ benefitted from a realisation in the market that its Central Queensland Coal Network asset is a beneficiary of the higher inflationary environment. This led to several broker upgrades which took the stock higher as investors sought inflation havens.

Performance Commentary - May 31, 2023

Australian shares fell in May as lower commodity prices, higher interest rates and weak consumer spending cautioned investors. The sharpest falls were in the consumer discretionary and staples sectors given signs of a retail recession for consumer spending. The combination of higher mortgage interest rates, rising rents and stubborn inflation pressures is squeezing purchasing power. There was also notable weakness in the resource sector given lower coal and iron ore prices on China concerns. Financials also disappointed given the prospect of lower profit margins with higher deposit interest rates and more sedate credit demand. Echoing the US market and the surge of investment interest in anything remotely related to artificial intelligence (AI), the Australian Information Technology sector posted a double-digit gain for May.

The annual distribution return to 31 May 2023 for the Antares Dividend Builder Fund was 5.6%. The fund delivered a total return of -2.2% (net of fees) for the month of May which compared to a return of -2.5% for the S&P/ASX200 Total Return Index. Dividends were received from BHP, Medibank Private, Transurban and Ventia Services during the month.

Contributing to the Fund’s performance were overweight positions in Suncorp (SUN) and Ventia Services (VNT) together with not holding a position in Wesfarmers (WES). SUN shares moved counter to the broader financials in May on no particular news including on ANZ’s proposed acquisition of its banking business. At VNT’s AGM which was held in May, the company reaffirmed its guidance and confidence for 2023 and beyond, citing the strong and growing markets in which it operates and its diverse and resilient portfolio of businesses. The company also announced the extension of a facilities maintenance contract with the Auckland City Council late in the month. WES flagged uncertain market conditions at its May investor day. The company also noted there were challenges with wage inflation and labour productivity which is likely to put downward pressure on margins in the near term.

Detracting from performance were overweight holdings in Metcash (MTS), Nine Entertainment (NEC) and NAB. With consumers becoming very price sensitive and looking to house brands, the independent supermarkets are reported to be Top 10 share holdings (alphabetical order) losing share to rivals Coles and Woolworths. NEC presented at an investor conference early in the month where it noted TV markets remained challenging.

Notwithstanding this, the company indicated it would continue to grow market share and flagged further cost reductions. NAB shares were under pressure after the bank released its first half results for 2023. Despite some positives, including a lift in dividend, the market reacted to comments from the bank on the impact of lower house prices and volume growth amid increased competition. This was reflected in a $393m credit impairment charge.

Performance Commentary - April 30, 2023

Australian Shares made solid gains in April given the global share rebound and signals from the Reserve Bank for a pause in raising interest rates. The strongest gains were from the AREITs which benefitted from the lower rates and the Information Technology sector which followed its global peers higher. The Resources sector was dragged down by the Materials stocks as iron ore prices corrected on weak steel demand, but this was partly mitigated by gains in Energy and Gold stocks.

The annual distribution return to 30 April 2023 for the Antares Dividend Builder Fund was 5.7%. The fund delivered a total return of 1.7% (net of fees) for the month of April which compared to a return of 1.8% for the S&P/ASX200 Total Return Index. Dividends were received from CSL, Nine Entertainment, Orora, South32 and Woodside Energy during the month.

Sector allocation Contributing to the Fund’s performance were overweight positions in CSR and Medibank Private (MPL) together with the decision not to own Rio Tinto (RIO). As a major supplier of building products, CSR has been seen as a beneficiary of the growing discussion that Australia has a housing shortage and a need to build more homes. The news that the Australian housing market has bottomed was also positive for sentiment. Investor interest in Medibank (MPL) shares has returned post the huge sell-off when the company announced it had been subject to a cyber security attack. Contrary to concerns that the attack on MPL would lead to a significant deterioration in policyholder numbers and earnings, MPL has been able to increase policy holder numbers and delivered a much stronger than expected 1H23 result. Despite some positive economic signals from China, steel demand was weak which saw iron ore and metals prices drop in April – as did RIO’s share price.

Performance Commentary - March 31, 2023

Australian shares slipped into negative territory in March. The sharpest falls were in the real estate and financial sectors given the turmoil in the global banking system and lower bond yields. However, strength in the resource sector on hopes of a Chinese economic recovery helped limit the downside in Australian share markets. There were also gains for communications, consumer discretionary and consumer staples sectors on hopes that the Reserve Bank would pause on further interest rate increases.

The annual distribution return to 31 March 2023 for the Antares Dividend Builder Fund was 5.5%. The fund delivered a total return of -0.2% (net of fees) for the month of March which compared to a return of -0.2% for the S&P/ASX200 Total Return Index. Dividends were received from Ansell, APA Group, Aurizon, BHP, IAG, Medibank Private, Suncorp, The Lottery Corporation, Telstra and Viva Energy during the month.

Contributing to the Fund’s performance were overweight positions in Ventia (VNT) and BHP together with not owning Macquarie Group (MQG). VNT shares were stronger after delivering a CY22 result in late February that beat consensus expectations and prospectus guidance and a major share sell-down by its majority shareholders. The result highlighted the predictability of its contracted revenue stream and a business that has managed costs well in an inflationary environment. VNT also provided guidance for CY23 NPATA growth of 7-10%, underpinned by strong pipeline visibility and record work-in-hand. VNT’s share price rallied after Apollo and CIMIC sold down 93 million shares in March, representing 22% of the company’s issued capital which has improved liquidity in the stock and reduced the stock overhang concerns that had affected the share price. BHP shares performed well on hopes of Chinese economy recovery following the release of a larger than expected increase in the China Manufacturing PMI Index. The global banking turmoil impacted the sector in Australia and MQG shares were not exempt.

Detracting from performance were overweight holdings in NAB and Suncorp (SUN) and not holding a position in Newcrest Mining (NCM). NAB and SUN reflected the general weakness in bank stocks. NCM shares were beneficiaries of the higher gold price and were underpinned by the scrip takeover offer of former owner and gold producer, Newmont

Performance Commentary - February 28, 2023

Australian shares slipped into negative territory in February. The sharpest falls were in the resource sector with some disappointments over the profit reports of BHP and Rio. Financial shares fell with the banks being squeezed by lower net interest margins and concerns over falling house prices. Real estate sector shares were also negatively impacted by rising bond yields. There were some positives with Insurers performing well on positive news from Medibank Private together with a general sector lift as higher bond yields drive high investment income given asset class restrictions for insurers. Utilities also delivered solid gains on a higher than expected (albeit lower) revised bid for Origin from Brookfield. Information technology recovered some ground after the sector was savaged in 2022.

The annual distribution return to 28 February 2023 for the Antares Dividend Builder Fund was 6.5%. The fund delivered a total return of -1.6% (net of fees) for the month of February which compared to a return of -2.4% for the S&P/ASX200 Total Return Index. Dividends were received from Transurban during the month.

Contributing to the Fund’s outperformance were overweight positions in Medibank (MPL) and Orora (ORA) together with not owning CBA. We have maintained our view that the market over-reacted to the potential impact on MPL’s customer retention after its cyber security incident. This was partially vindicated in its half year result as policy numbers stabilised and began to grow again in February, whilst claims inflation was lower than expected. These factors helped support the stock. ORA shares jumped after the company announced a boost to interim net profit and dividend and indicated it expects continued growth in its North American business in the second half. Banks have generally underperformed on concerns about net interest margins peaking amid fierce competition for home mortgages and the prospect of higher bad debts as interest rates increase.

Detracting from performance were overweight holdings in BHP, NAB, and Aurizon (AZJ). Disappointing profit reports from BHP and AZJ saw their share prices weaker. Of particular concern for AZJ was that the growth engine of the business, bulk haulage, struggled in the half, following a disappointing 2H FY 2022. On further investigation, we have concluded the market has made some incorrect assumptions about this business given the impact of weather down Australia’s east coast. We also believe the market has overlooked the substantial progress being made in its transition away from bulk coal haulage with its major new contract win with Toll.

Australia’s economy appears to be softening judging by more subdued retail spending and falling house prices. Consumers have become more cautious with high inflation and rising mortgage interest rates. Even the labour market is cooling after the strong jobs growth in 2022 with the unemployment rate edging up from 3.5% to 3.7% in January.

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