Antares Prof High Growth Shares (PPL0106AU) Report & Performance

What is the Antares Prof High Growth Shares fund?

Antares Prof High Growth Shares aims to outperform the S&P/ASX 200 Accumulation Index (‘Benchmark’) by 5% per annum (before fees) over a rolling five year period. The Fund seeks to enhance returns through a range of investment strategies including long/short positions and active trading. The fund is an actively managed portfolio of Australian listed equities and cash equivalent instruments, with exchange traded derivatives used for efficient portfolio management, to hedge market risks and to enhance returns.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For Antares Prof High Growth Shares

Antares Prof High Growth Shares 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 Antares High Growth Shares Fund delivered a return of -3.5% (net of fees) for the month of September 2023, compared to its benchmark’s -2.8% return.

Contributing to performance were overweight positions in Paladin (PDN) and Santos (STO) together with a short position in Orora (ORA). The uranium price rose to a decade high in September and with further increases expected as investors anticipated greater future demand for nuclear energy. PDN’s share price rose by more than 25% in September. The higher oil price helped boost the Santos share price. 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.

Detracting value were overweight positions in Botanix (BOT), Block Inc (SQ2) and Goodman Group (GMG). During the month BOT announced that the FDA had delayed approval of its Sofpironium Bromide product because the instructions for patients need amendment. While the FDA did not raise any safety, efficacy or manufacturing issues, BOT expects approval is now likely to be delayed until the second half of CY24. SQ2 suffered a small outage in its Square Seller retail point of sale equipment globally which hurt sentiment, while the march up in longer duration interest rates hurt its valuation as discount rates spiked, disproportionately impacting longer duration equities such as SQ2. GMG shares were weaker in September on no particular news. Property related stocks were sold down as bond yields moved higher.

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 High Growth SharesPPL0106AUManaged FundsDomestic EquityAustralian Long ShortDomestic Equity - Long Short IndexASX Index 200 Index401.02 M1.05%0.00%0.3%

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 High Growth Shares3.52%6.76%20.34%7.26%10.75%9.24%13.53%13.98%-2.9%-13.72%-39.1%

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 High Growth SharesDomestic Equity - Long Short Index-1.21%-0.53%NA%NA%NA%0.844.26%5.11%0.910.93

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
Antares Prof High Growth SharesYes105-153 Miller Street North Sydney, NSW 2060 Australia+61 03 8634 4721https://www.mlc.com.au/-

Product Due Diligence

What is Antares Prof High Growth Shares

Antares Prof High Growth Shares is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Long Short 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 High Growth Shares has Assets Under Management of 401.02 M with a management fee of 1.05%, a performance fee of 0.00% and a buy/sell spread fee of 0.3%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the Antares Prof High Growth Shares has returned 3.52% in the last month. The previous three years have returned 7.26% annualised and 13.98% each year since inception, which is when the Antares Prof High Growth Shares 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 High Growth Shares first started, the Sharpe ratio is NA with an annualised volatility of 13.98%. The maximum drawdown of the investment product in the last 12 months is -2.9% and -39.1% 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 High Growth Shares has a 12-month excess return when compared to the Domestic Equity - Long Short Index of -1.21% and -0.53% 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 High Growth Shares has produced Alpha over the Domestic Equity - Long Short 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 - Long Short Index category, you can click here for the Peer Investment Report.

What level of diversification will Antares Prof High Growth Shares provide?

Antares Prof High Growth Shares has a correlation coefficient of 0.93 and a beta of 0.84 when compared to the Domestic Equity - Long Short 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 High Growth Shares and its peer investments, you can click here for the Peer Investment Report.

How do I compare the Antares Prof High Growth Shares with the ASX Index 200 Index?

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

Can I sort and compare the Antares Prof High Growth Shares to do my own analysis?

To sort and compare the Antares Prof High Growth Shares financial metrics, please refer to the table above.

Has the Antares Prof High Growth Shares 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 High Growth Shares?

If you or your self managed super fund would like to invest in the Antares Prof High Growth Shares 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 High Growth Shares?

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

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the Antares Prof High Growth Shares. 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. Sector allocation The Antares High Growth Shares Fund returned -3.0% (net of fees) for the month of August 2023, compared to its benchmark’s -0.7% return.

Detracting value were overweight positions in Iress (IRE), Resmed Inc (RES) and Block Inc (SQ2). IRE’s result was accompanied by its fourth material earnings downgrade in 12 months, citing cost pressures and a weaker revenue outlook.

The company also announced that it would suspend its interim dividend. 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. Compounding this was the release of clinical trial results by Novo Nordisk, the manufacturer of Ozempic that indicated another of its weight loss products, Wegovy, could reduce the risk of serious heart problems and heart-related death by 20%. Having risen by more than 21% in July, SQ2 shares were sold down in August after reporting its 2Q23 results. This was despite the company exceeding expectations and upgrading full year EBITDA guidance. The decline appears to be driven by the outlook provided by management whereby 3Q23 gross margins were decelerating, as well as overall macroeconomic concerns. A material portion of SQ2’s earnings are exposed to transaction volumes Top 10 share holdings (alphabetical order) in small and medium sized businesses, which are adversely impacted by a slowdown in US consumer spending.

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 Antares High Growth Shares Fund delivered a return of 2.9% (net of fees) for the month of July 2023, in line with its benchmark.

Contributing to performance were overweight positions in Block Inc (SQ2), Seek (SEK) and AGL. Despite limited stock specific news, SQ2 shares rallied 21.4% as part of the risk-on trade and more positive sentiment on the resilience of the US consumer. SEK benefited from a shift in thinking about the macroeconomic environment. The market has previously been concerned about SEK’s volumes if the unemployment rate were to increase. AGL has enjoyed recent broker upgrades following the strong recovery in wholesale electricity prices.

Detracting value were overweight positions in IGO Limited (IGO) and CSL together with a short position in Woodside Energy (WDS). IGO provided a strong Q4 production and sales update. However, the company also gave FY24 production and capex guidance, of which the latter disappointed the market as it was significantly ahead of expectations. The 14.2% rise in the Brent Crude USD price during July was reflected in a buoyant performance by WDS shares. 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.

Australia’s economy is giving mixed signals with robust jobs growth and moderating inflation being countered by weak retail spending. There were strong employment gains in June as the unemployment rate edged down to 3.5% – essentially a 50-year low. Consumer price pressures also moderated in the June quarter with annual inflation coming in at 6.0%. However, the looming price rises for electricity and residential rents in the new financial year still suggest that inflation is a concern. For consumers, the squeeze on budgets from high inflation and rising interest rates has negatively impacted spending as evidenced by the sharp fall in June retail sales. While the Reserve Bank held the cash interest rate steady at 4.1% in July, it guided that further interest rate rises may be required to reduce inflation.

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 Antares High Growth Shares Fund delivered a return of 1.4% (net of fees) for the month of June 2023, compared to its benchmark’s 1.8% return.

Contributing to performance were overweight positions in Paladin Energy (PDN), AGL and Botanix (BOT). PDN performed well as its share price rebounded after being sold-down in late May driven by fears of partial government intervention in its key Namibian asset, Langer Heindrich. It also benefitted from more positive sentiment towards nuclear energy as a genuine option in the global quest to drive down emissions from energy production. AGL increased its earnings guidance for FY23 and provided guidance for FY24 that was well in excess of market estimates. BOT announced an agreement to commercialise its topical ECCLOCK treatment for severe underarm sweating in Korea and added that it was expecting FDA approval for the drug in September. The company also hosted an investor presentation during the month in the wake of increased investor interest.

Detracting value were overweight positions in CSL and TPG Telecom (TPG) and a short position in Fortescue Metals (FMG). 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. TPG Telecom (TPG) detracted from performance after the Australian Competition Tribunal rejected its proposed deal

with Telstra. In the deal, TPG would have gained access to Telstra’s leading mobile network in regional Australia, thus boosting the range and service coverage of TPG brands such as Vodaphone. Optimism that further stimulus would drive Chinese growth saw the iron ore price spike and so too FMG’s share price.

Australia’s economy has displayed more positive signs with strong jobs growth, a rebound in retail spending and inflation moderating. May saw Australia’s employment expand by a robust +75,900 jobs and the unemployment rate edge down from 3.7% to 3.6%. Consumers were also more willing to raise their retail spending in May but this also reflected promotional activity and sales events according to the Australian Bureau of Statistics. Consumer price pressures moderated in May with annual inflation coming in at 5.6% compared to 6.8% for April. However, the looming strong rises in electricity costs and residential rents in the new financial year suggest a painful squeeze on consumer budgets. The Reserve Bank again surprised with another 0.25% interest rate hike in June taking the cash interest rate to 4.1% in the hope of returning inflation back to its 2% to 3% target range.

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 Antares High Growth Shares Fund delivered a return of -1.2% (net of fees) for the month of May 2023, compared to its benchmark’s -2.5% return. Sector allocation Contributing to performance were overweight positions in Telix Pharmaceuticals (TLX) and Santos (STO) together with an underweight holding in NAB. TLX held its AGM in May at which the company noted its plans to build on the success of Illuccix, which is used in the detection of prostate cancer and also on the results from its Phase III ZIRCON study of TLX250-CDx in clear cell renal cell carcinoma. Management reiterated their strategy and confirmed $100m in R&D investment for 2023. The onset of cold weather and strong spot gas prices has boosted sentiment for gas producers. Several of STO’s plants that experienced outages early this year, including Moomba and Varanus island, have recovered, removing concerns about production. Supply disruptions for competitor Beach Energy may have been another positive for STO sentiment. 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 Antares High Growth Shares Fund delivered a return of 2.2% (net of fees) for the month of April 2023, ahead of its benchmark’s 1.8% increase. Contributing to performance was an overweight position in Telix Pharmaceuticals (TLX) and short positions in Rio Tinto (RIO) and Fortescue Metals (FMG). Shares in TLX enjoyed a stellar month after reporting revenue of A$100m for the first quarter of 2023. Consensus broker estimates of revenue for the full calendar year Sector allocation 2023 were A$360m and following the disclosure of first quarter numbers that consensus forecast was increased to A$470m, an upgrade of 30% which in turn drove the stock price up 35%. Despite some positive economic signals from China, steel demand was weak which saw iron ore and metals prices drop in April – as did both RIO and FMG shares.

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 Antares High Growth Shares Fund delivered a return of 0.8% (net of fees) for the month of March 2023.

Contributing to outperformance was an overweight position in Northern Star (NST) together with decisions not to own NAB and Macquarie Group (MQG). NST shares rallied during the month as the US banking crisis saw gold prices increase by 8%. The company provided an update on its Pogo Operation in Alaska where gold production was halted in order to repair damage to the ball mill motor that was discovered during routine repairs. While the disruption is expected to impact production by 20-40k oz in FY23, the company’s production guidance remains unchanged. The global banking turmoil impacted the sector in Australia and NAB and MQG shares were not exempt.

Detracting value were overweight positions in GPT, Goodman Group (GMG) and APM Human Services (APM). There was no company news from GPT or GMG during the month, although sentiment around the real estate sector was generally negative. Despite announcing several new north American contracts during the month, APM shares have continued to languish.

Australia’s economy still appears to be softening judging by more sedate retail spending. Consumers have become more cautious given high inflation and rising mortgage interest rates. There was only a mild rise in nominal retail spending in February, with the annual gain at 6.4% now failing to keep up with inflation. There were some encouraging signs of labour market resilience with stronger job gains in February and the unemployment rate edged down from 3.7% to 3.5%. Also positive was that consumer inflation appears to have peaked, with the new ABS monthly CPI measure showing annual inflation falling from 7.4% in January to 6.8% in February.

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 also 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 Antares High Growth Shares Fund delivered a return of -3.0% (net of fees) for the month of February 2023. Sector allocation Contributing to performance were overweight positions in Medibank Private (MPL), Aristocrat Leisure (ALL) and not holding a position in NAB. 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.

ALL held its AGM during the month and reiterated its guidance for 2023 on a reasonably positive outlook. The stock regained much of the ground lost in January. 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 value were overweight positions in Northern Star (NST), Paladin (PDN) and IGO. NST’s results for the six months to 31 December 2022 were generally in line with expectations. But, the decline in the share price was driven by the strength of the US dollar, as US interest rate expectations again began to rise and the subsequent fall in the gold price. A reduction in risk appetite likely contributed to weakness in the PDN share price.

IGO shares reflected the general weakness in resource stocks and the divergence of views on lithium prices. Top 10 share holdings (alphabetical order) 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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