MLC Wholesale IncomeBuilder aims to provide an income stream (excluding capital gains) that grows each year, by actively investing primarily in Australian shares. It suitable for investors wanting to invest in shares in Australian companies that are expected to deliver a growing dividend stream over time.
The Australian share market posted relatively flat returns over the June 2023 quarter. MLC Wholesale IncomeBuilder provided a relative degree of resilience. The portfolio’s return of 1.8% (before deducting fees and taxes) outperformed the broader Australian share market (ASX300) by 0.8%.
The ASX 300 lagged global markets over the quarter as the strong lead from overseas was tempered by somewhat unexpected Reserve Bank of Australia interest rate hikes which made investors more cautious. The drivers in the June quarter were similar to those which have played out for most of this year, with Technology and Consumer stocks doing much of the heavy lifting as investors attempt to put a value on Artificial Intelligence (AI) and assess any productivity gains this technology might produce. Materials were weaker in line with lower commodity prices and consumer facing sectors also struggled as interest rates continue to bite.
Both of the fund’s underlying managers, Antares Equities and Maple Brown Abbott, outperformed the ASX300 but underperformed the ASX 200 All Industrials over the quarter.
What is MLC Wholesale IncomeBuilderTM MLC Wholesale IncomeBuilderTM 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 MLC Wholesale IncomeBuilderTM has Assets Under Management of 374.16 M with a management fee of 0.72%, a performance fee of 0.00% and a buy/sell spread fee of 0.5%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the MLC Wholesale IncomeBuilderTM has returned 5.48% in the last month. The previous three years have returned 11.3% annualised and 12.8% each year since inception, which is when the MLC Wholesale IncomeBuilderTM 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 MLC Wholesale IncomeBuilderTM first started, the Sharpe ratio is 0.33 with an annualised volatility of 12.8%. The maximum drawdown of the investment product in the last 12 months is -7.06% and -44.65% 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 MLC Wholesale IncomeBuilderTM has a 12-month excess return when compared to the Domestic Equity - Large Value Index of -0.01% and -1.76% 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. MLC Wholesale IncomeBuilderTM has produced Alpha over the Domestic Equity - Large Value Index of 0.04% in the last 12 months and -0.12% 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 MLC Wholesale IncomeBuilderTM provide?
MLC Wholesale IncomeBuilderTM has a correlation coefficient of 0.96 and a beta of 0.92 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 MLC Wholesale IncomeBuilderTM and its peer investments, you can click here for the Peer Investment Report.
How do I compare the MLC Wholesale IncomeBuilderTM with the ASX Index 200 Index?
For a full quantitative report on MLC Wholesale IncomeBuilderTM compared to the ASX Index 200 Index, you can click here.
Can I sort and compare the MLC Wholesale IncomeBuilderTM to do my own analysis?
To sort and compare the MLC Wholesale IncomeBuilderTM financial metrics, please refer to the table above.
Has the MLC Wholesale IncomeBuilderTM 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 MLC Wholesale IncomeBuilderTM?
How do I get in contact with the MLC Wholesale IncomeBuilderTM?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the MLC Wholesale IncomeBuilderTM. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - September 30, 2022 In what was a weak quarter for Australian shares following moves globally, the MLC Wholesale IncomeBuilder portfolio whilst not immune, provided a relative degree of resilience. The portfolio’s return of -7.3% (before deducting fees and taxes) outperformed the broader Australian share market.
Australian shares joined the sharp sell-off in global share markets over the course of the second quarter of 2022. Many central banks engaged in monetary tightening, raising interest rates to combat high inflation. This in turn heightened investor fears of a global economic recession. The concerns over a slowing global economy and a reduction in demand saw oil prices pull back as the quarter progressed. Iron ore prices also fell sharply as China’s zero-COVID policy continued to weigh negatively on economic activity and therefore demand for iron ore.
There continued to be a rotation out of growth and higher multiple companies into value stocks, particularly in defensive areas of the market. The heavy fall of the ASX over the June quarter saw all sectors finish lower except for the Utilities and Energy sectors which both eked out small gains. Particularly hard hit were the Information Technology, Materials and Consumer Discretionary sectors as investors repositioned their portfolios more defensively for the expected softer economic times ahead.
Both of the fund’s managers, Antares Equities and Maple Brown Abbott, strongly outperformed the market over the quarter.
Performance Commentary - June 30, 2022 The fund benefited from the market’s continued sell-off of growth companies and shift to favour value companies which tend to have higher earnings.
The February earnings reporting season came and went without too many surprises. In general, Australian companies reported strong operating performance over the December half. Around half of all companies reporting beating earnings expectations, while a quarter were in-line. Notably, retail sales remained resilient and confidence in a post-COVID economic recovery was high.
The major banks performed well on expectations of interest rate rises and the positive flow on effect this could have on their net interest margins.
Both of the fund’s managers, Antares Equities and Maple Brown Abbott, strongly outperformed the market over the quarter and outperformed by 6% over the year.
Performance Commentary - March 31, 2022 The fund benefited from the market’s continued sell-off of growth companies and shift to favour value companies which tend to have higher earnings.
The February earnings reporting season came and went without too many surprises. In general, Australian companies reported strong operating performance over the December half. Around half of all companies reporting beating earnings expectations, while a quarter were in-line. Notably, retail sales remained resilient and confidence in a post-COVID economic recovery was high.
The major banks performed well on expectations of interest rate rises and the positive flow on effect this could have on their net interest margins.
Both of the fund’s managers, Antares Equities and Maple Brown Abbott, strongly outperformed the market over the quarter and outperformed by 6% over the year.
Performance Commentary - June 30, 2021 The fund delivered another very strong return in the June quarter, up 5.8% (before deducting fees and taxes). The “COVID crash” in March 2020 has dropped out of the one year returns so the fund returned an extraordinary 32.2% for the year to 30 June 2021.
The strong June quarter performance reflects positive returns by the market benchmark in April, May and June. Australia’s economic recovery and improved earnings growth contributed to the market’s positive return. Since the profit reporting period early in the year which exceeded expectations, the ongoing release of good economic data resulted in upgraded earnings forecasts for the financial year just concluded and 2022. However, these positive market developments occurred before the deterioration in COVID-19 infections with the outbreak of the Delta variant in Sydney requiring an extended lockdown.
In terms of industries, Information Technology (12.1%) recorded the highest return, due in part to the performance strength of AfterPay. The Consumer Discretionary index increased by 11.2% as consumer sentiment and retail spending returned to pre-pandemic levels. The favourable response to Telstra’s corporate restructure and intention to return approximately $1.4 billion to shareholders following the sale of 49% of its mobile tower infrastructure business contributed to the 10.6% return of the Communications Services index.
Performance Commentary - December 31, 2020 The fund’s return (before deducting fees and taxes) turned sharply upwards, delivering 16.3% in the December quarter. The one year return is still weak, largely due to the significant falls earlier in the year during the “COVID crash” in MarchThe exceptional December quarter performance was due largely to positive news that a number of COVID-19 vaccines had been developed. Expectations that the rollout of the vaccine in 2021 would lessen the economic impact of COVID-19 raised company earnings forecasts and led to improved performance by industries and companies closely exposed to the anticipated economic recovery. The more positive market tone was also helped by improved local economic data and a further loosening of monetary policy with the cash rate reduced to 0.1% by the Reserve Bank of Australia. Strength in commodity prices also helped the local share market, with the iron ore price pushing above US$150/t and the price of oil rising sharply.
Even the Financial sector joined in as confidence that Australia’s economic recovery would reduce loan repayment deferrals led to rises in the fund’s holdings in banks.
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