Australian Ethical International Shares Fund aims to provide long-term growth through investment in international companies, which meet the Australian ethical charter.
The International Shares Fund declined -8.4% (-8.3% Wholesale) over the June quarter versus its benchmark (MSCI World ex Australia) which decreased -8.4%, resulting in slight outperformance for the Wholesale fund of 0.1%. The global equities markets reacted negatively to inflation pressures and rising interest rates over the quarter, particularly the US which represents the Fund’s largest holding. The sectors positively contributing to the Fund’s performance were Consumer Discretionary and Materials, with both sectors being substantial underweight positions. The underweight positions were the driver of the contribution as both sectors underperformed their benchmark.
The sectors which detracted from performance were Real Estate and Financials. The Fund is substantially overweight both these sectors due to our ethical selection process. The Real Estate sector underperformed its benchmark due to interest rate movements. The associated effect of rising interest rates also resulted in the Financials sector underperforming.
What is Australian Ethical Intl Shr WS Australian Ethical Intl Shr WS is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Responsible 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 Australian Ethical Intl Shr WS has Assets Under Management of 80.14 M with a management fee of 0.85%, a performance fee of 0.00% and a buy/sell spread fee of 0.1%.
How has the investment product performed recently? The recent investment performance of the investment product shows that the Australian Ethical Intl Shr WS has returned 2.32% in the last month. The previous three years have returned 11.06% annualised and 11.73% each year since inception, which is when the Australian Ethical Intl Shr WS 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 Australian Ethical Intl Shr WS first started, the Sharpe ratio is 0.74 with an annualised volatility of 11.73%. The maximum drawdown of the investment product in the last 12 months is -5.46% and -18.9% 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 Australian Ethical Intl Shr WS has a 12-month excess return when compared to the Foreign Equity - Large Responsible Index of 2.63% and -0.89% 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. Australian Ethical Intl Shr WS has produced Alpha over the Foreign Equity - Large Responsible Index of 0.3% in the last 12 months and -0.07% since inception.
What are similar investment products? For a full list of investment products in the Foreign Equity - Large Responsible Index category, you can click here for the Peer Investment Report.
What level of diversification will Australian Ethical Intl Shr WS provide? Australian Ethical Intl Shr WS has a correlation coefficient of 0.98 and a beta of 0.95 when compared to the Foreign Equity - Large Responsible 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 Australian Ethical Intl Shr WS and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Australian Ethical Intl Shr WS with the Developed -World Index? For a full quantitative report on Australian Ethical Intl Shr WS compared to the Developed -World Index, you can click here.
Can I sort and compare the Australian Ethical Intl Shr WS to do my own analysis? To sort and compare the Australian Ethical Intl Shr WS financial metrics, please refer to the table above.
Has the Australian Ethical Intl Shr WS 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 Australian Ethical Intl Shr WS? If you or your self managed super fund would like to invest in the Australian Ethical Intl Shr WS please contact Level 8, 130 Pitt Street. Sydney NSW 2000 via phone 1800 021 227 or via email enquiries@australianethical.com.au.
How do I get in contact with the Australian Ethical Intl Shr WS? If you would like to get in contact with the Australian Ethical Intl Shr WS manager, please call 1800 021 227.
Comments from SMSF Mates SMSF Mate does not receive commissions or kickbacks from the Australian Ethical Intl Shr WS. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - December 31, 2021 There has been no shortage of headlines through the quarter which induced volatility into asset prices. Concerns about rising inflation, the rapid spread of a new variant of COVID, and the escalation of geopolitical tensions as the threat of a Russian invasion of the Ukraine appeared to become more imminent. These headlines were reflected in asset prices, and the VIX (a market measure of uncertainty) exceeded 28 in late November – compared to a long run median of 17, and a post emergence covid median of 23. While uncertainty was high as supportive economic data continued and as fears of widespread global lockdowns eased – the VIX declined back below 20 and equities actually ended the quarter on a positive note and long-term yields on Australian government bonds after exceeding 2% at the end of October were basically unchanged by the end of the quarter.
The International Shares Fund appreciated 6.0% (6.1% Wholesale) over the December quarter versus its benchmark (MSCI ex Australia) which increased 7.2%, resulting in underperformance of 1.2% (1.1% Wholesale). The sectors positively contributing to the Fund’s performance were Financials, IT and Real Estate, sectors where the Fund has overweight positions. In Financials, stock selection was the key input into outperformance whereas for IT, the driver was sector weight. Consumer Discretionary is a substantial underweight position but provided the most positive attribution as the stocks held significantly outperformed in the sector.
Performance Commentary - June 30, 2021 Global markets posted another strong quarter with the MSCI World Index appreciating 7.7%. This was driven by the US where the S&P 500 rose 8.6%, and closely followed by Europe (MSCI Europe ex UK) which rose 7.1%. Australia kept pace, the ASX 200 was up 8.3% driven by cyclicals. In Asia performance was subdued relative to other regions; including the Nikkei which was down 1.2%. Performance in global equity markets was driven by improved economic activity, the roll out of the vaccination program and strong monetary and fiscal support. This improved economic activity was reflected in a rising Purchasing Managers’ Index. Unemployment rates have fallen faster than anticipated, and YoY Inflation rates have continued to rise – prompting investors to pay close attention to how Central Banks will react. However, despite the inflation concerns bond yields fell over the quarter with questions remaining around whether the rise in inflation will be sustained.
The International Shares Fund appreciated 8.6% (Wholesale class: 8.8%) over the June quarter versus its benchmark (MSCI ex Australia) which increased 9.33%, resulting in underperformance of 0.34%. The sectors contributing mostly to the Fund’s performance were Industrials, IT and Communication Services, sectors where the Fund has overweight positions. Industrials contributed 0.52% of the outperformance, but it was stock selection which generated most of the positive attribution.
Performance Commentary - December 31, 2020 The International Shares Fund increased 6.8% (7.1% Wholesale Fund) over the December
quarter versus its benchmark (MSCI ex Australia) which increased 5.7%, resulting in
the outperformance of 1.1% (1.4% Wholesale Fund). It was an eventful quarter where
markets reacted positively to a vaccine being rolled out, Biden ousting Trump and the
Brexit agreement being finalized. This resulted in very strong global performance,
particularly driven by the US, where the S&P 500 increased 11.7% and the Nasdaq
increased 15.4%.
The sectors contributing most to the Fund’s performance were Industrials and Utilities.
The Fund is overweight Industrials, with the overweight stocks outperforming over the
quarter. Stock selection in Utilities was also the main driver of the positive performance,
with the stocks held contributing positively while those not held underperformed the
benchmark. The Fund is overweight the IT sector which contributed 0.21% of
outperformance and for the first time this year, the stocks held performed strongly,
negating the non-holding of Apple, which returned 0.27% over the benchmark. The
sectors which detracted from performance were Energy and Materials, both of which the
Fund has zero weighting to due to our ethical selection criteria. Both sectors generated
positive returns relative to the benchmark, as the oil price increased 21% over the
quarter and metal prices increased on average 14%. The Fund is underweight the
Consumer Discretionary sector, which for the first time did not detract from performance
due to the below-benchmark performance of Amazon (not held).
Performance Commentary - September 30, 2020 The International Shares Fund increased 1.8% (2.1% Wholesale Fund) over the September quarter versus it benchmark (MSCI ex Australia) which increased 3.78%, resulting in underperformance of 1.9% (1.7% Wholesale Fund). The good performance of the overall global markets was driven by the very strong performance of the US, where the S&P 500 increased 8.5% and the Nasdaq increased 11%. In August the US indices broke record highs due to resilient company earnings, a shift in the Federal Reserve approach to monetary policy and optimism about a vaccine. As the Fund is underweight the US market (62% versus benchmark of 68%) it contributed to the underperformance.
The two sectors which contributed positively to the Fund’s performance were Energy and Utilities. The Fund is underweight Energy (the sector declined as the oil price decreased in September) due to our ethical selection criteria, which provided a positive contribution as the sector underperformed. Stock selection in Utilities contributed to the positive performance. The two sectors which detracted from performance were IT and Communication Services, both of which the Fund is overweight. Both IT and Communication Services provided positive returns, but relative to the benchmark the sectors underperformed due to stock selection. In the IT sector the Fund underperformed by 1.53%, with 0.88% of the underperformance attributable to the Fund not holding Apple due to our ethical selection criteria. The other negative contributor was Consumer Discretionary, a sector which the Fund is underweight. The largest stock in this sector is Amazon which the Fund does not hold, contributing an underperformance of 0.28% of the overall underperformance.
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