Epoch Gbl Eq Shldr Yld Fd Hgd is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Currency Hedged 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 Epoch Gbl Eq Shldr Yld Fd Hgd has Assets Under Management of 280.77 M with a management fee of 1.3%, a performance fee of 0.00% and a buy/sell spread fee of 0.4%.
The recent investment performance of the investment product shows that the Epoch Gbl Eq Shldr Yld Fd Hgd has returned 3.28% in the last month. The previous three years have returned 5.8% annualised and 12.43% each year since inception, which is when the Epoch Gbl Eq Shldr Yld Fd Hgd first started.
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 Epoch Gbl Eq Shldr Yld Fd Hgd first started, the Sharpe ratio is NA with an annualised volatility of 12.43%. The maximum drawdown of the investment product in the last 12 months is -8.18% and -34.57% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
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 Epoch Gbl Eq Shldr Yld Fd Hgd has a 12-month excess return when compared to the Foreign Equity - Currency Hedged Index of -3.59% and -1.42% since inception.
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. Epoch Gbl Eq Shldr Yld Fd Hgd has produced Alpha over the Foreign Equity - Currency Hedged Index of NA% in the last 12 months and NA% since inception.
For a full list of investment products in the Foreign Equity - Currency Hedged Index category, you can click here for the Peer Investment Report.
Epoch Gbl Eq Shldr Yld Fd Hgd has a correlation coefficient of 0.92 and a beta of 0.91 when compared to the Foreign Equity - Currency Hedged 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.
For a full quantitative report on Epoch Gbl Eq Shldr Yld Fd Hgd and its peer investments, you can click here for the Peer Investment Report.
For a full quantitative report on Epoch Gbl Eq Shldr Yld Fd Hgd compared to the Developed -World Index, you can click here.
To sort and compare the Epoch Gbl Eq Shldr Yld Fd Hgd financial metrics, please refer to the table above.
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For the month of August, the Fund posted a return of -2.2% while the broader market returned -1.9% as measured by the MSCI World Ex Australia Index Net dividends in AUD (100% hedged into $A). The Fund was protective on the downside when markets fell but ended slightly behind the benchmark after a few AI related mega-cap stocks in the index took off at month end, riding a rebounding tailwind. Low beta benefitted the Fund during the month, while negative exposure to medium-term momentum detracted.
Absolute return was positive in most sectors, with the largest contributions coming from information technology and health care. Return in information technology came mostly from a communications equipment holding that saw an outsized return for the month. Within health care, pharmaceutical stocks primarily accounted for performance.
On a relative basis, the Fund finished the month slightly behind the broad market benchmark. Sector results were mixed, with the largest contribution coming from information technology and the largest detraction coming from utilities. Stock selection drove return in information technology, primarily due to underexposure to a technology and hardware stock that suffered heavily when markets fell despite rallying at month end. The drag on return from utilities was attributable to an overweight allocation, as the sector was the worst performer in the index.
Global equity markets were positive in July, with the Fund posting a return of 2.1% and the broader market returning 2.8% as measured by the MSCI World Ex Australia Index in AUD (100% hedged into $A). A lower-than-expected June CPI report drove more traction for a softlanding narrative that has been building all year. The month saw some slowing of the sharp big tech rally that has been fuelling market returns year to date on the back of a few high-profile earnings disappointments and valuation concerns in the cohort. The Fund’s low beta and low volatility exposure remained headwinds to return.
Absolute return was positive in almost all sectors, with financials contributing by far the most to performance. Banks drove performance for the sector, as the dissipation of concerns following the turmoil in the industry earlier this year continued to accelerate, and thus far the regulatory response to the crisis has remained measured. Furthermore, strong 2Q earnings for select holdings showcased resilient profitability and healthier-than-feared credit quality.
Global equity markets rose during the quarter, though surging indexes painted a misleading picture, as market leadership continued to be astoundingly narrow. A handful of mega-cap tech stocks that have seen multiples blow out on the back of AI mania accounted for the majority of broad market return.
The Fund recorded positive absolute returns in most sectors, with Information Technology by far the biggest contributor, followed by Industrials and Consumer Discretionary. Information Technology was buoyed primarily by technology hardware and storage names and a semiconductor stock that benefitted from the AI hype tailwind. Returns in Industrials came largely from electrical equipment companies and trading companies and distributors. Consumer Discretionary performance was driven by a restaurant name that outperformed on strong earnings.
On a relative basis, the Fund finishing behind the broad MSCI World ex Australia benchmark, though it outperformed the MSCI World High Dividend Index. Communication Services was the largest detractor to relative returns due to stock selection, underperformance came primarily from exposure to a diversified telecommunications name that lagged along with very strong returns in two interactive media and services companies that are outside of our investable universe due to not paying a dividend. Information Technology was the next biggest drag, owing primarily to an underweight allocation, as the sector was the top performer in the index. Underexposure to a technology hardware storage and peripherals name that saw an outsized return for the quarter also detracted meaningfully.
Turmoil spilled into May, as First Republic became the 3rd U.S. bank failure this year. Despite uncertainty around a U.S. debt ceiling resolution and continued warnings of a looming recession, mega-cap tech stocks aggressively decoupled from the broader market, posting outsized returns driven by AI mania. The Fund’s high dividend yield and low beta were headwinds to Index relative returns during the month.
Absolute returns were negative for the month with the largest detractions coming from Financials and Materials, while holdings in Information Technology and Consumer Discretionary were positive contributors. Financials continue to face headwinds following banking failures, and banks and insurance companies primarily accounted for performance in the sector. The negative return in Materials was largely driven by a chemicals company that came under pressure due to weaker than expected earnings and guidance.
Global equity markets were positive in April, as sentiment appeared to remain driven by investors betting on the timing of an end to interest rate hikes and the likelihood of a recession in the near term. The banking turmoil seen in March looked to be easing through most of the month but crept back into headlines near month end.
Absolute returns were positive in all sectors except for Information Technology, with the largest contributions coming from Health Care and Financials. Within Health Care, pharmaceuticals were the primary driver of return, while Insurance stocks were the main driver of return within Financials.
On a relative return basis, the Fund finished roughly in-line with the broad MSCI World ex Australia benchmark and ahead of the MSCI World High Dividend Yield Index. Consumer Discretionary was the largest contributor to relative return owing mostly to stock selection, with the most impact coming from having no position in an automobile stock that was pressured heavily during the month. The biggest detractor to relative return was stock selection within Information Technology, as exposure to a few underperforming semiconductor stocks was a drag on performance.
Despite shifting sentiment, equity markets finished strong in the first quarter of 2023. A steep, growth-led rally kicked the year off on the back of disinflation and a perceived rising likelihood of an economic soft landing. Hotter-than-expected January PPI numbers and a reassessment upwards of peak-rate expectations cooled sentiment in February, reversing the bull run. The end of the quarter was defined by the collapse of Silicon Valley Bank, Signature Bank, and Credit Suisse and subsequent intense scrutiny of industry peers. While the crisis drove significant outflows from financials, it also accelerated a rally in mega-cap tech stocks that buoyed markets into quarter end, with investor positioning signalling broad expectations for a dovish pivot by central banks in response to systemic risk in the banking system. broad expectations for a dovish pivot by central banks in response to systemic risk in the banking system.
All sectors except for Financials contributed to the Fund’s positive absolute return in Q1, with the largest contributions coming from Information Technology and Industrials. Semiconductors drove return within IT, as investors looked through current industry inventory digestion to a potential rebound in the second half of the year. Performance in Industrials was fuelled by air freight and logistics companies.
Stocks fell in February, giving back some of January’s gains. The weakest results came from the Energy, Healthcare, and Consumer Staples sectors while the Materials, Financials, and Communications Services sectors provided modest gains. In January, U.S. inflation slowed for the seventh consecutive month, but not by enough to meet expectations. Despite the continued reduction in inflation, the Federal Reserve has indicated that a policy pivot is unlikely to occur in 2023. Japan continued to see rising wages and inflation grew to 4.3% in January. Inflation continued to ease in the euro zone, PMI indicators rose, and consumer confidence increased. The European Commission published its Winter 2023 Economic Forecast indicated that the EU economy is likely to avoid a recession.
Absolute returns were positive in all sectors except for Consumer Discretionary, with the largest contributions coming from Information Technology and Financials. Semiconductors drove performance in Information Technology, owing largely to one holding in particular that rose on a strong earnings report. Banks and insurers accounted for return within Financials, with contributions spread broadly across holdings. On a relative performance basis, the Fund finished slightly ahead of both the broad market MSCI World ex Australia benchmark as well as the MSCI World High Dividend Index. Health Care was the largest contributor to relative return on the back of stock selection. The contribution came primarily from exposure to a biotech stock that was one of the top performers in the index for the month. Energy was the next biggest aid to relative performance due to stock selection within oil, gas and consumable fuel names. A majority of industry companies in the index struggled during the month, and the portfolio’s exposure to a handful of out-of-benchmark holdings that held up well aided relative return.
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