The investment objective of the Sub-Fund is to achieve a long term capital growth.The Sub-Fund will seek to achieve its investment objective primarily through investment in equity securities listed and traded on the stock exchanges in countries included in the developed and emerging markets as defined by MSCI.
The Fund returned -4.31% (after fees) in September, to underperform the Index return of -3.80% by 50 basis points (bps). Over the longer term (7 years), the Fund’s return of 12.53% per annum (p.a.) is 126 bps p.a. ahead of the Index return of 11.27% p.a.
Key contributors to relative performance:
• Samsonite International S.A. continued to perform well, despite the weakness seen in many China and Hong Kong-listed shares last month. The driver was continued positivity, stemming from a robust trading update released in mid-August. As management met investors following the release, they have continued to express confidence in the businesses potential to achieve strong sales and profit growth.
• Haleon plc outperformed as the overhang created by planned stake reductions by GlaxoSmithKline and Pfizer cleared and we saw renewed investor appetite for stable growth companies, as economic data continued to deteriorate.
• Progressive Corporation responded well to solid monthly financial performance. Premium growth remained strong (at 16%) and costs remained well controlled, meaning that loss ratios came in lower than expected and earnings per share higher.
• Schlumberger N.V. and Worley Limited benefitted from the renewed strength in the oil price, as investors weighed the likely impact of continuing tight control over production rates by OPEC+, at the same time as stockpiles.
Key detractors to relative performance:
• Masimo Corporation was weak in sympathy with much of the MedTech space, as investors continued to weigh the potential impact of obesity drugs on an increasingly wide range of surgical procedures. It is fair to say, however, that Masimo’s stock specific beta / earnings risk also appears somewhat elevated because of their acquisition of Sound United and more volatile recent trading.
• Netflix, Inc. experienced some profit taking as a response to comments made by its management during a broker conference. These remarks indicated that the acceleration of revenue growth, driven by their efforts to curtail account sharing, had slightly diminished in September. Management remains confident, however, that this initiative is continuing to drive growth in revenues, without meaningfully increasing customer churn.
• Bio-Techne Corporation suffered as the company and other Life Science tools peers presented at several broker conferences this month. Although there were no new negatives (over and above the well-known headwinds posed by post-COVID destocking and tighter biotech funding), there was no concrete evidence yet that things are meaningfully improving. With rising bond yields also pressuring growth stocks this month, these factors combined to see the stock underperform.
• Amadeus IT Group SA underperformed as concerns grew that the rate of recovery in their travel booking business may be slowing, in sympathy with broader gauges of economic activity. With the company continuing to invest in their long-term growth drivers, this could lead to some short-term margin pressure.
• TransUnion succumbed to profit taking after a period of stronger performance. The catalyst was a renewed push higher in US mortgage rates, as bond yields rose over the month.
What is Nikko AM Global Share Nikko AM Global Share is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Fundamental 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 Nikko AM Global Share has Assets Under Management of 134.04 M with a management fee of 0.99%, a performance fee of 0.00% and a buy/sell spread fee of 0.4%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Nikko AM Global Share has returned 2% in the last month. The previous three years have returned 5.62% annualised and 11.55% each year since inception, which is when the Nikko AM Global Share 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 Nikko AM Global Share first started, the Sharpe ratio is 0.23 with an annualised volatility of 11.55%. The maximum drawdown of the investment product in the last 12 months is -6.6% and -48.26% 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 Nikko AM Global Share has a 12-month excess return when compared to the Foreign Equity - Large Fundamental Index of -9.73% and 0.31% 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. Nikko AM Global Share has produced Alpha over the Foreign Equity - Large Fundamental Index of -0.49% in the last 12 months and 0.04% since inception.
What are similar investment products?
For a full list of investment products in the Foreign Equity - Large Fundamental Index category, you can click here for the Peer Investment Report.
What level of diversification will Nikko AM Global Share provide?
Nikko AM Global Share has a correlation coefficient of 0.96 and a beta of 0.76 when compared to the Foreign Equity - Large Fundamental 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 Nikko AM Global Share and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Nikko AM Global Share with the Developed -World Index?
For a full quantitative report on Nikko AM Global Share compared to the Developed -World Index, you can click here.
Can I sort and compare the Nikko AM Global Share to do my own analysis?
To sort and compare the Nikko AM Global Share financial metrics, please refer to the table above.
Has the Nikko AM Global Share 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 Nikko AM Global Share?
How do I get in contact with the Nikko AM Global Share?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Nikko AM Global Share. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - August 31, 2023 The Fund returned 2.36% (after fees) in August, to outperform the Index return of 1.14% by 123 basis points (bps). Over the longer term (7 years), the Fund’s return of 13.07% per annum (p.a.) is 137 bps p.a. ahead of the Index return of 11.69% p.a.
Key contributors to relative performance:
• Samsonite International S.A. outperformed on the back of a strong set of quarterly numbers, with sales in all regions returning to pre-COVID levels and significantly stronger margins, because of the new expense structure. Management commentary on continued global travel demand was very encouraging.
• Encompass H ealth Corporation rallied after releasing strong quarterly earnings. Patient volume growth is recovering more quickly than expected, following the disruption caused by COVID-19. At the same time, some of the cost pressures related to the public health emergency are continuing to normalise (principally staffing costs). The combination of these factors saw quarterly profits come in 15% ahead of market expectations and the company raised its full year guidance at the same time.
• Progressive Corporation was strong after issuing a reassuring trading update during the month. In particular, premium growth remained strong (at 21%) and the combined ratio came in lower than expected in its auto insurance business, after seeing some short-term pressure the previous month.
Key detractors to relative performance:
• Palomar Holdings, Inc. underperformed, as the company continues to face reinsurance headwinds. Despite this, the company should be able to successfully manage its way through these issues due to its sensible approach to underwriting, unique earthquake-focused book, and growth opportunities in the earthquake insurance market.
• Box, Inc. shares declined after cutting its full-year revenue forecast in its quarterly earnings release. The challenging macroeconomic environment has been affecting Box customers’ IT budgets, hampering user growth and revenue retention for the company.
• The Japanese market had been performing well versus other markets due to a combination of a more stable currency and a greater push amongst market participants for better capital allocation amongst listed companies. However, over the last few months, we have seen a combination of profit taking and renewed weakness in the Japanese yen, and this has been the major factor behind the relative weakness of Sony Group Corporation. Lacklustre results in August also weighed on the shares.
Performance Commentary - July 31, 2023 The Fund returned -0.25% (after fees) in July, to underperform the Index return of 2.40% by 265 basis points (bps). Over the longer term (5 years), the Fund’s return of 11.12% per annum (p.a.) is 74 bps p.a. ahead of the Index return of 10.38% p.a.
Key contributors to relative performance:
• Oilfield services companies Schlumberger N.V. and Champion X Corporation both performed well on strong results and an elevated oil prices.
• Booking Holdings Inc. outperformed on the back of positive travel trends. In particular, Americans are taking more time off work and vacationing more than they have in over a decade. This has benefitted Booking, which supports customers in making travel reservations.
• Singaporean bank DBS Group Holdings Ltd. outperformed after a lackluster first half of the year. DBS continues to deliver very strong return on equity and while loan growth remains subdued, management have managed asset quality well.
• PT Bank Mandiri (Persero) Tbk an Indonesian bank performed well on strong results. Higlhlighted by loan growth of 12%, improved margins, resilient asset quality and a notable reduction in non-performing loans.
Key detractors to relative performance:
• Hexagon AB declined following a short report which alleged that organic growth had been exaggerated, the exCEO’s investment company – Greenbridge – had been frontrunning Hexagon investments, buying mature earnings with low growth. The manager is not convinced that organic growth has been exaggerated, as the company is compliant with accounting rules and has been open about the fact that a reasonable proportion of growth is acquisition related. Regarding Greenbridge, this news is outdated and has already been addressed during the legal proceedings involving Hexagon’s former CEO, Ola Rollen. He was completely cleared of the allegations. The accusation regarding acquisitions with mature earnings and low growth is true regarding Integraph in the early 2000s but less obvious with later acquisitions such as Infor.
• Masimo Corporation fell sharply after issuing a profit warning at the start of the month – as demand undershot expectations in both its Healthcare and Consumer segments, the company was too slow to react (probably because senior management were distracted by the proxy fight with an activist shareholder). Thankfully, almost all the softness in their healthcare business was attributable to short-term factors (such as component and labour shortages), and management confirmed that incoming order growth was still running in the low double digit percentage rates. The Consumer division’s weakness may prove longer lasting and likely strengthens the hand of activist shareholders, who comprehensively won the recent proxy fight with management & are pursuing reforms that we believe will release substantial value for shareholders.
Performance Commentary - June 30, 2023 The Fund returned 2.17% (after fees) in June, to underperform the Index return of 2.87% by 70 basis points (bps). Over the longer term (5 years), the Fund’s return of 11.39% per annum (p.a.) is 101 bps p.a. ahead of the Index return of 10.38% p.a. Key contributors to relative performance:
• Chart Industries Inc. share price surged following the announcement of the sale of one of its non-core divisions – Roots, a low-pressure compression and vacuum business – for 300 million USD to Ingersol Rand. Divesting non-core assets was one of the core objectives for Chart’s CEO, Jill Evanco, after the company’s large acquisition of Howden Engineering, announced in November 2022. The acquisition had shone a light on Chart’s gearing and balance sheet strength, so this divestment was a welcome relief for shareholders.
• Schlumberger N.V. and ChampionX Corporation recovered after senior management reconfirmed their confidence in forecasts and future strength in energy services for the medium term at a sell side conference. Additionally, the Kingdom of Saudi Arabia further cut their oil production quota in response to continued weak commodity prices
Key detractors to relative performance:
• The Japanese market had been performing well versus other markets due to a combination of a more stable currency (as normalisation of policy was expected) and a greater push amongst market participants for better capital allocation amongst listed companies. However, in June, we have seen a combination of profit taking and renewed weakness in the Yen, and this has been the major factor behind the relative weakness of both Hoya Corporation and Sony Group Corporation over the period.
• Worley Limited struggled to keep up with a rising market, there was no stock specific reason that, in the manager’s view, could explain its weaker performance.
Performance Commentary - May 31, 2023 The Fund returned -0.75% (after fees) in May, to underperform the Index return of 1.02% by 178 basis points (bps). Over the longer term (5 years), the Fund’s return of 11.36% per annum (p.a.) is 119 bps p.a. ahead of the Index return of 10.16% p.a.
Performance Commentary - April 30, 2023 The Fund returned 4.57% (after fees) in April, to outperform the Index return of 2.80% by 177 basis points (bps). Over the longer term (5 years), the Fund’s return of 11.73% per annum (p.a.) is 182 bps p.a. ahead of the Index return of 9.91% p.a. In dollar terms, an investment of $10,000 in the Fund five years ago would be worth $17,412 today, comparaed to $16,039 if it was invested passively in the Benchmark.
Performance Commentary - February 28, 2023 The Fund outperformed the benchmark over the month.
Key contributors to relative performance:
• Palomar Holdings shares outperformed, fueled by a positive reaction to their fourth quarter earnings release. Reinsurance pricing was the focus of investors heading into the print and whilst the tougher reinsurance market was acknowledged, management were able to ease investor concerns and evidence their ability to obtain sufficient reinsurance capacity at a better price than peers. Earnings visibility continues to improve with growth in Palomar’s fronting business and prudent management of potential losses.
• Progressive Corporation had a strong month, helped by a positive reaction to the release of their February results which showed robust growth in policy numbers. On top of this, rising bond yields offered a tailwind in February.
• Box, Inc. shares started the month strong and held onto those gains despite increased headwinds for the growth end of the market as the month progressed. This came after Box faced some pressure in February from an analyst downgrade, which prevented it from fully participating in the bounce last month.
Key detractors from relative performance:
• AdaptHealth Corporation shares fell at the end of the month after reporting a poor Q4 result. Investors were particularly disappointed by the lowering of full year guidance which accompanied the earnings release. While the revised guidance reflected only a minor lowering in top-line and earnings expectations, it was the fact that the existing guidance only lasted 6 weeks before adjustments had to be made which hit the share price.
Performance Commentary - January 31, 2023 The Fund underperformed the benchmark over the month.
Key contributors to relative performance:
• The credit reporting agency TransUnion recovered some of the losses it incurred during 2022. Last year’s weak performance was attributable to rising interest rates, which forced a decline in new mortgage applications, negatively impacting TransUnion’s credit business. Now that it seems like rates may have peaked, the shares look oversold.
• Online travel business Booking Holdings Inc. outperformed in January echoing the market’s preference for cyclicals over defensives. The Fed slowed the pace of rate hikes in December on the back of encouraging inflationary data, indicating that a softer landing could be on the cards in 2023. Additionally, demand for overseas holidays remains robust, supporting growth in travel-related stocks like Booking.
• The Spanish technology provider for the global travel and tourism industry, Amadeus IT Group, benefitted from similar factors to Booking during the month of January. Cyclicals outperformed defensives on the back of speculation that the Fed could be nearing the end of its aggressive interest rate cycle. Furthermore, robust demand for overseas travel remains a favourable trend for Amadeus.
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