The First Sentier Small Companies fund invests in in a broad selection of Australian listed small companies, with between 50 to 70 stocks typically held in the portfolio. The fund’s strategy is to favour companies with sustainable competitive advantages, strong financials, quality management and predictable earnings.
Among the top contributors to relative performance were:
Chalice Mining (not held)
The share price fell sharply following the release of the company’s Gonneville Nickel-Copper-PGE Scoping Study in August.
Seven Group Holdings (overweight)
The share price rose during the quarter, supported by the company’s FY23 earnings which showed resilience in earnings from its portfolio of underlying businesses.
TPG Telecom (overweight)
The share price rallied strongly at the end of July on the news of a potential sale of the company’s non-mobile fibre assets to Macquarie-backed Vocus Group.
Among the main detractors to relative performance were:
Iress (overweight)
The company downgraded its FY23 guidance in August set at its strategy day four months prior. The market reacted negatively, reflecting investor concern around new management’s execution of its strategy to reposition the business.
Paladin Energy (not held)
The share price rose into the combined strength of energy prices coupled with increasing interest in nuclear power.
Pro Medicus (not held)
The share price rallied in September after the company announced it had won a significant 10-year deal with US-based Baylor Scott & White valued at around A$140m.
What is CFS Wholesale Aus Small Companies CFS Wholesale Aus Small Companies is an Managed Funds investment product that is benchmarked against ASX Index MidCap 50 Index and sits inside the Domestic Equity - Mid Cap 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 CFS Wholesale Aus Small Companies has Assets Under Management of 502.79 M with a management fee of 1.11%, 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 CFS Wholesale Aus Small Companies has returned 7.88% in the last month. The previous three years have returned 4.4% annualised and 16.45% each year since inception, which is when the CFS Wholesale Aus Small Companies 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 CFS Wholesale Aus Small Companies first started, the Sharpe ratio is 0.51 with an annualised volatility of 16.45%. The maximum drawdown of the investment product in the last 12 months is -12.85% and -54.97% 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 CFS Wholesale Aus Small Companies has a 12-month excess return when compared to the Domestic Equity - Mid Cap Index of 1.94% and -0.92% 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. CFS Wholesale Aus Small Companies has produced Alpha over the Domestic Equity - Mid Cap Index of 0.11% in the last 12 months and -0.03% since inception.
What are similar investment products?
For a full list of investment products in the Domestic Equity - Mid Cap Index category, you can click here for the Peer Investment Report.
What level of diversification will CFS Wholesale Aus Small Companies provide?
CFS Wholesale Aus Small Companies has a correlation coefficient of 0.96 and a beta of 1.15 when compared to the Domestic Equity - Mid Cap 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 CFS Wholesale Aus Small Companies and its peer investments, you can click here for the Peer Investment Report.
How do I compare the CFS Wholesale Aus Small Companies with the ASX Index MidCap 50 Index?
For a full quantitative report on CFS Wholesale Aus Small Companies compared to the ASX Index MidCap 50 Index, you can click here.
Can I sort and compare the CFS Wholesale Aus Small Companies to do my own analysis?
To sort and compare the CFS Wholesale Aus Small Companies financial metrics, please refer to the table above.
Has the CFS Wholesale Aus Small Companies 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 CFS Wholesale Aus Small Companies?
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Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the CFS Wholesale Aus Small Companies. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - June 30, 2023 The S&P/ASX Small Ordinaries Accumulation Index returned -0.5% during the June quarter, underperforming the S&P/ASX 200 Accumulation Index which returned 1.0%. The S&P/ASX Small Industrials Index returned 2.3% and the S&P/ASX Small Resources Index returned -7.6%. The Gold sub industry returned -13.6%.
Quarterly returns from economic sectors in the S&P/ASX Small Ordinaries Index were mixed. IT (10.5%) was the quarter’s best performing sector, followed by Financials (8.0%), Industrials (6.2%), Health Care (3.9%), Real Estate (1.2%), and Energy (1.2%). Materials (-7.0%) was the quarter’s worst performing sector. Other sectors to finish lower were Consumer Discretionary (-3.8%), Consumer Staples (-2.1%), and Communication Services (-1.3%).
Among the top contributors to relative performance were:
News Corporation (overweight)
The share price rose after the company released better-than-expected 3Q23 results, which reported EBITDA above consensus expectations and solid progress in cost reduction initiatives.
Perseus Mining (not held)
The share price was lower amid reported instances of armed conflict in Sudan, where the company’s Meyas Sand Gold Project is based, along with a lacklustre gold price weighing on the share price.
Fletcher Building (overweight)
The share price rose steadily during the quarter likely driven by increased confidence in operating conditions following an investor day where the Company confirmed FY23 guidance and provided a positive medium term outlook.
Among the main detractors to relative performance were:
Telix Pharmaceuticals (not held)
The share price rose during the quarter following a positive 1Q23 business update in April which accompanied the company’s solid quarterly results.
Syrah Resources (overweight)
The share price fell following the release of the company’s 1Q23 report, which reported production and shipments increasing. However pricing was lower, costs were higher, and shipments of natural graphite were curtailed on lower demand. The company also issued a $28m convertible note to AustralianSuper, effectively giving them control of the company.
Premier Investments (overweight)
The share price fell during the quarter during a generally weak month for the Consumer Discretionary sector amid rising interest rates and weaker consumer spending.
Performance Commentary - March 31, 2023 The S&P/ASX Small Ordinaries Accumulation Index returned 1.9% during the March quarter, underperforming the S&P/ASX 200 Accumulation Index which returned 3.5%. The S&P/ASX Small Industrials Index returned 1.4% and the S&P/ASX Small Resources Index returned 2.9%. The Gold sub industry returned 7.2%.
Quarterly returns from economic sectors in the S&P/ASX Small Ordinaries Index were mixed. Consumer Discretionary (9.4%) was the best performing sector, followed by Health Care (8.7%), Communication Services (4.7%), Materials (4.3%), and Industrials (2.1%). Real Estate (-4.7%) was the quarter’s worst performing sector. Other sectors to finish in negative territory were IT (-4.3%), Financials (-3.8%), Energy (-3.2%), and Consumer Staples (-0.8%).
Among the top contributors to relative performance were:
Domain Holdings (overweight) The share price rose during the quarter as it continued to recover from touching multi-year lows in late December 2022, as the outlook for the residential housing market stabilised.
Corporate Travel Management (overweight) The share price rose during the quarter after dipping to multi-year lows in December as China re-opened its borders to international travellers.
Technology One (overweight)
The share price was resilient after the company provided a positive update on its product pipeline for the year ahead at its AGM in February.
Among the main detractors to relative performance were:
Liontown Resources (not held) The share price rallied at quarter-end following an unsolicited takeover proposal from Albemarle. The Liontown board rejected the proposal on the grounds it undervalued the company.
Insignia Financial (overweight) The share price fell along with its peers as the company’s leverage to equity market movements weighed on the share price. Neuren Pharmaceuticals (not held)
Performance Commentary - December 31, 2022 The S&P/ASX Small Ordinaries Accumulation Index returned 7.5% during the December quarter, underperforming the S&P/ASX 200 Accumulation Index which returned 9.4%. The S&P/ASX Small Industrials Index returned 6.6% and the S&P/ASX Small Resources Index returned 10.4%. The Gold sub industry returned 26.9%.
All economic sectors in the S&P/ASX Small Ordinaries Index finished the quarter in positive territory. Real Estate (11.8%) was the quarter’s best performing sector, followed by Materials 11.6%, Health Care (9.3%), Communication Services (6.8%), Consumer Discretionary (5.6%), Industrials (5.4%), Financials (4.8%), Consumer Staples (4.1%), and IT (3.4%). Energy (2.6%) posted the smallest gains during the quarter.
Performance Commentary - September 30, 2022 The S&P/ASX Small Ordinaries Accumulation Index returned -0.5% during the September quarter, underperforming the S&P/ASX 200 Accumulation Index which returned 0.4%. The S&P/ASX Small Industrials Index returned -1.0% and the S&P/ASX Small Resources Index returned 0.9%. The Gold sub industry returned -2.3%.
There were mixed returns from economic sectors in the S&P/ASX Small Ordinaries Index during the quarter. Energy (12.4%) was the quarter’s best performing sector, followed by Industrials (9.1%), Health Care (4.5%), Financials (2.4%), and Consumer Discretionary (0.0%). Consumer Staples (-9.6%) was the quarter’s worst performing sector. Other sectors to finish lower were Real Estate (-6.7%), Communication Services (-2.3%), IT (-1.9%), and Materials (-1.6%).
Performance Commentary - June 30, 2022 The S&P/ASX Small Ordinaries Accumulation Index returned -20.4% during the June quarter, underperforming the S&P/ASX 200 Accumulation Index which returned -11.9%. The S&P/ASX Small Industrials Index returned -18.4% and the S&P/ASX Small Resources Index returned -26.6%. The Gold sub industry returned -30.9%. Energy (2.4%) was the only economic sector to finish the quarter in positive territory. Consumer Staples (-4.7%) was the next best performer, followed by Communication Services (-10.4%), Health Care (-12.7%), Real Estate (-15.5%), Industrials (-18.3%), Financials (-20.7%), Consumer Discretionary (-22.5%), and IT (-27.9%). Materials (-31.7%) was the worst performing sector during the quarter.
Among the top contributors to relative performance were:
TPG Telecom (overweight)
The share price closed the month higher, as defensive companies were favoured by investors during a turbulent quarter, and the company’s investor day and news of a dividend policy were well received by investors.
NIB (overweight)
The share price posted solid gains over the quarter, likely due to the company’s defensive characteristics in a volatile market and strong earning tailwinds attributable to lower elective surgeries and claims expense.
Among the main detractors to relative performance were:
Whitehaven Coal (not held)
The share price rose over the quarter on strong thermal coal prices, led primarily by ongoing supply concerns due to sanctions in Russia.
Breville Group (overweight)
The share price came under pressure due to macro-economic concerns around softening consumer demand, inflation, and supply chain constraints due to Covid-related shutdowns in China for much of the quarter.
Silver Lake Resources (overweight)
The share price fell heavily following the company’s disappointing third-quarter results, the withdrawal of FY22 guidance, and a falling gold price.
Performance Commentary - March 31, 2022 The S&P/ASX Small Ordinaries Accumulation Index returned -4.2% during the March quarter, underperforming the S&P/ASX 200 Accumulation Index which returned 2.2%. The Small Industrials Index returned -9.1% and the Small Resources Index returned 14.5%. The Gold subsector returned 8.9%. Energy (23.6%) was the quarter’s best performing sector, followed by Materials (11.0%), and Industrials (1.5%). All other sectors finished the quarter lower, with Health Care (-24.2%) the worst performer, followed by IT (-17.7%), Financials (-13.8%), Consumer Discretionary (-10.9%), Consumer Staples (-6.2%), Real Estate (-4.3%) and Communication Services (-1.0%).
Among the top contributors to relative performance were:
Zip Co (not held)
The share price declined over the quarter as regulatory pressure builds on BNPL operators. Further the business raised capital to support the increasing costs of its international growth plan and its merger with Sezzle.
Silver Lake Resources (overweight)
The share price performed well after the company reaffirmed its gold sales volume forecast for the full year at its FY22 first half results. The share price was further supported by a rising gold price.
Novonix (not held)
The share price lost ground during the quarter after hitting record highs in mid-December, as investors rotated away from high growth stocks with high multiples.
Among the main detractors to relative performance were:
Whitehaven Coal (not held)
The share price rose over the quarter on strong thermal coal prices amid supply concerns due to sanctions on Russia.
Nanosonics (overweight)
The share price fell following the announcement of plans to drop GE as its sales distributor in the US, despite the 1H22 result showing signs of a recovery in their US business.
Champion Iron (not held)
The share price rose after posting a solid third quarter Activity Report, which included the announcement of an inaugural dividend and an positive update on the company’s Bloom Lake expansion project.
Performance Commentary - December 31, 2021 The S&P/ASX Small Ordinaries Accumulation Index returned 2.0% during the December quarter, broadly in line with the S&P/ASX 200 Accumulation Index which returned 2.1%. The Small Industrials Index returned -1.2% and the Small Resources Index returned 14.2%. The Gold subsector returned 20.5%. Materials (15.1%) was the best performing sector, followed by Real Estate (6.9%) and IT (3.4%). Financials (-6.2%) was the worst performing sector over the quarter. Other sectors to finish lower included Consumer Discretionary (-5.0%), Industrials (-4.0%), Energy (- 3.5%), Health Care (-2.8%), Communication Services (-1.3%), and Consumer Staples (-0.3%).
Among the top contributors to relative performance were:
Lynas (overweight)
The share price reached multi-year highs during the quarter as the demand outlook remains favourable for the company’s rare earth materials, which are a key component in electric vehicle batteries. Also, rare earth prices continued to rise in line with other metals exposed to the EV battery complex.
Capricorn Metals (overweight)
The share price rose to record highs during the month after the company posted positive project updates and outlook at its AGM. Zip (not held) BNPL firms were mostly weaker after the US Consumer Financial Protection Bureau announced it had launched an enquiry into the industry with several companies, including Zip, ordered to disclose information on their business practices.
Among the main detractors to relative performance were:
TPG Telecom (overweight)
The share price fell in December on news that founder David Teoh has entered into an agreement to sell 53 million shares in a block trade; an amount equivalent to around 3% of the Company’s issued share capital.
Pilbara Minerals (not held)
Pilbara’s share price continued to rise as investors pursue exposure to lithium, which is a key component in electric vehicle batteries.
Webjet (overweight)
The share price fell lower following the identification of a new variant of Covid-19 during the quarter, which raised concerns that domestic and international travel restrictions could be reintroduced.
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