Pan Tribal Global Equity Fund seeks to outperform the MSCI ACWI (in AUD), over the medium to long-term, by investing in companies with attractive long-term growth potential in both developed and developing markets.
Global equity markets were generally subdued in September as investor sentiment remained cautious towards recessionary risks. The exceptions being Japan (up slightly) and the UK which rallied modestly in local currency terms. The PAN-Tribal Global Equity Fund fell by 4.22% (net of fees) in Australian dollar terms whilst the MSCI ACWI (in AUD) fell by 3.80% over the month.
Security selection detracted from relative performance of the Fund during September. Stock selection was positive within the Information Technology and Materials sectors with HollySys (China) and Teck Resources (Canada), respectively, the largest relative contributors. However this was more than offset by underperformance within the Consumer Discretionary and Financials sectors where holdings such as Delivery Hero (Germany), MGM Resorts (US) and AIA Group (Hong Kong) were amongst the main laggards.
Regional allocation was flat for the month, whilst sector allocation boosted relative returns. The Fund’s overweight to the Financials sector contributed given the sector was the second best performing MSCI sector during September (despite negative returns in Australian dollar terms). The Fund was underweight both the worst performing sector (Information Technology) and the best performing sector (Energy) which negated the impact of either.
With regard to individual company contributions, Danske Bank (Denmark, Financials) and Meta (US, Communication Services) contributed positively in addition to companies mentioned above; whilst Amazon (US, Consumer Discretionary) and Julius Baer (Switzerland, Financials) were amongst the main detractors not already mentioned.
KE Holdings is a newly purchased company in the Fund. It is the parent entity of Beike, a leading Chinese platform (both online and offline) for housing transactions and services.
What is Pan-Tribal Global Equity Fund Pan-Tribal Global Equity Fund is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Growth 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 Pan-Tribal Global Equity Fund has Assets Under Management of 366.15 M with a management fee of 1.2%, 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 Pan-Tribal Global Equity Fund has returned 1.28% in the last month. The previous three years have returned 2.77% annualised and 13.73% each year since inception, which is when the Pan-Tribal Global Equity Fund 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 Pan-Tribal Global Equity Fund first started, the Sharpe ratio is NA with an annualised volatility of 13.73%. The maximum drawdown of the investment product in the last 12 months is -8.77% and -26.9% 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 Pan-Tribal Global Equity Fund has a 12-month excess return when compared to the Foreign Equity - Large Growth Index of 2.5% and -3.05% 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. Pan-Tribal Global Equity Fund has produced Alpha over the Foreign Equity - Large Growth Index of NA% in the last 12 months and NA% since inception.
What are similar investment products? For a full list of investment products in the Foreign Equity - Large Growth Index category, you can click here for the Peer Investment Report.
What level of diversification will Pan-Tribal Global Equity Fund provide? Pan-Tribal Global Equity Fund has a correlation coefficient of 0.7 and a beta of 0.7 when compared to the Foreign Equity - Large Growth 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 Pan-Tribal Global Equity Fund and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Pan-Tribal Global Equity Fund with the Developed -World Index? For a full quantitative report on Pan-Tribal Global Equity Fund compared to the Developed -World Index, you can click here.
Can I sort and compare the Pan-Tribal Global Equity Fund to do my own analysis? To sort and compare the Pan-Tribal Global Equity Fund financial metrics, please refer to the table above.
Has the Pan-Tribal Global Equity Fund 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.
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Performance Commentary - August 31, 2023 Softer economic data out of China combined with renewed concerns about the Chinese property sector gave rise to heightened volatility across global markets over August. Emerging markets underperformed, down by almost an additional 4% for the month (in USD terms) versus their developed market counterparts. Against this backdrop the PAN-Tribal Global Equity Fund declined by 2.99% in Australian dollar terms (net of fees), with rolling 1-year performance to end-August of 22.63% (net of fees).
The Davis Investment Discipline is underpinned by fundamental research to identify and purchase durable businesses with expanding earnings at value prices and hold them for the long term. Stock selection is key to this process and was also the main determinant of the Fund’s performance over August.
Ping An Insurance (China) and Capital One Financial (US) were the main companies contributing to underperformance within the Financials sector; with JD.com (China) and Prosus (Netherlands) underperformers within the Consumer Discretionary sector. Stock selection within the Communication Services sector also detracted over the month, albeit to a lesser extent.
Sector allocation detracted slightly from relative performance over the month. The Energy sector was the best performing MSCI sector during August (continuing its strong run since July) and as such the Fund’s underweight detracted, as did the overweight positioning in Financials. Furthermore the underweight to Health Care detracted marginally. At a regional level, the Fund’s overweight to Emerging Markets dragged down relative performance, due mostly to the overweight positioning in China. Both sector and regional allocations result from bottom-up individual company exposures in the Fund, rather than top-down macro views.
Amongst the individual stocks contributing the most in absolute terms over the month were Amazon (Consumer Discretionary, US), HollySys (Information Technology, China), Berkshire Hathaway (Financials, US) and Viatris (Health Care, US). The main laggards have previously been mentioned.
There were no new companies purchased during August, whilst Intel (Information Technology, US) was the only position exited.
Performance Commentary - July 31, 2023 During July, global equity markets continued the upward trajectory that has been characteristic of the calendar year to date. The MSCI ACWI (in AUD) rose 2.40% over the month as investors took confidence from inflation and GDP data across developed markets that suggested a softer landing for economies than had previously been anticipated. The PAN-Tribal Global Equity Fund returned 5.64% (net of fees) during July, outperforming the MSCI ACWI (in AUD) by over 3%.
In keeping with the bottom-up, active, stock picking investment philosophy of Davis Advisors, the main driver of the Fund’s outperformance over the month was security selection. Chinese holdings JD.com and Meituan were among the companies driving strong stock selection within the Consumer Discretionary sector. Likewise Ping An Insurance (China) and Julius Baer (Switzerland) outperformed within the Financials sector, whilst the only sector with marginally negative stock selection was Information Technology.
Sector allocation also contributed to relative outperformance of the Fund. The overweight position to Financials bolstered returns moderately, whilst the portfolio’s overweight to Communication Services, and underweight to both Health Care and Information Technology also contributed albeit to a lesser extent. Detracting slightly from sector allocation was the underweight position in Energy which was the best performing MSCI sector over July. At a regional level, emerging markets outperformed developed markets and this was evident in the Fund’s performance with the overweight to China contributing significantly.
At an individual stock level (in addition to companies already mentioned) the Fund’s absolute returns benefitted from its holding in Meta (Communication Services, US) as well as additional Financials holdings in DBS Group (Singapore) and Wells Fargo (US). There were only five holdings in the portfolio that were down in absolute terms over the month, with the main laggards of these being Liberty Media (Communication Services, US), AIA (Financials, Hong Kong) and HollySys (Information Technology, China).
MGM Resorts International (Consumer Discretionary, US) was purchased as a new holding in the Fund over the month.
Performance Commentary - June 30, 2023 Global equity markets rallied across the board during the month of June, with the MSCI ACWI (in AUD) delivering a positive return of 2.87%. The PAN-Tribal Global Equity Fund benefitted from strong stock selection returning 5.09% over the month (net of fees), outperforming the MSCI AWCI by 2.22%. This takes performance of the Fund over the 2022/23 financial year to 20.92% (net of fees) in absolute terms.
The Davis Investment Discipline has its foundations in fundamentals-based, bottom-up research. We see this philosophy reflected in the attribution data with the key driver of relative performance over the month of June being stock selection. Stock selection was strongest within the Communication Services sector with Meta (US) being the largest contributor to relative return. Strong selection was also seen within the Financials, Healthcare and Industrials sectors, with Danske Bank (Denmark), Cigna (US) and Owens Corning (US), respectively, all performing well.
At the asset allocation level, sector allocation contributed somewhat to relative performance over the month, however this was more than offset by regional allocation, noting that both sector and regional positioning are a direct outcome of the individual holdings within the portfolio, with neither being determined by top-down macro views. At the sector level, the Fund’s overweight to the Consumer Discretionary sector was positive, as was the underweight positioning to the Health Care and Consumer Staples sectors.
Weighing on relative performance was the underweight to Industrials and the overweight to Communication Services. From a regional standpoint, Asia ex-Japan underperformed US and European equity markets during June, and as such the Fund’s overweight exposures to China, Singapore and South Korea all contributed in roughly equal parts to relative underperformance at a regional level.
Performance Commentary - May 31, 2023 Global economic data was mixed over the month of May. Labour market data was positive throughout the US, UK & Europe with low unemployment and steady wages growth, however all three economies also reported data signalling a contraction in manufacturing activity. Against this mixed backdrop the MSCI ACWI (in AUD) gained 1.02% over the period. The PANTribal Global Equity Fund was slightly down by 0.45% (net of fees) over May with stock selection the main detractor from relative performance.
Lagging performance from both Meituan (China) and Prosus (Netherlands) drove relative underperformance from a stock selection point of view within the Consumer Discretionary sector during the month. Also weighing on performance was stock selection within the Financials and Materials sectors driven by companies such as Julius Baer (Switzerland) and Teck Resources (Canada), respectively. Although not a direct holding in the portfolio, the failure of First Republic Bank in the US continued to weigh on banking stocks more broadly and contributed to heightened volatility across the Financials sector. Positively, strong performance from US companies Meta (Facebook) and Alphabet (Google) contributed to outperformance within the Communication Services sector.
Sector allocation was slightly negative over May. The Fund’s underweight positioning to the Consumer Staples, Energy and Healthcare sectors contributed to relative performance, as did the overweight to Communication Services. However, this was offset by the overweight to Financials and underweight to Information Technology, the latter being the strongest performing MSCI sector during the month. From a regional perspective the Fund’s exposure to emerging markets also weighed on relative performance.
Amongst the top contributors to the Fund’s absolute performance over the month (in addition to companies mentioned already) were Amazon (US, Consumer Discretionary), Capital One Financial (US, Financials) and Samsung (Korea, Information Technology). Conversely, Financials holdings Ping An Insurance (China), DBS Group (Singapore) and AIA (Hong Kong) weighed on the Fund’s returns.
There were no new positions established in the Fund during May, nor positions exited.
Performance Commentary - April 30, 2023 The MSCI ACWI (in AUD) returned 2.80% over the month of April with global equity markets continuing the upward trajectory they have enjoyed calendar year to date. Economic data pointed to growth ahead of expectations in the US, UK & Europe, and Q1 GDP data out of China was also stronger than anticipated. The PAN-Tribal Global Equity Fund delivered a return of 3.93% (net of fees), outperforming the MSCI ACWI by 1.13%.
The ‘Davis Investment Discipline’ focuses on bottom-up stock selection and seeks to purchase durable businesses with expanding earnings at value prices and to hold these for the long term. In keeping with this discipline, the driver of outperformance during the month can be attributed to stock selection. Sector allocation was neutral whilst regional allocation detracted (noting that sector and regional allocations are direct consequences of each individual stock holding). Strong stock selection was observed in each of the Communication Services, Financials and Materials sectors with Meta (US), Ping An Insurance (China) and Teck Resources (Canada), respectively, key contributors. Conversely JD.com (China) underperformed, weighing down stock selection within the Consumer Discretionary sector.
With regard to sector allocation the Fund’s overweight to Financials and underweight to Information Technology contributed to relative performance. However, this was offset by underweights to Health Care, Energy and Consumer Staples, and the overweight to Consumer Discretionary, all of which combined to detract from relative returns.
Performance Commentary - March 31, 2023 Performance of global equities surprised on the upside over the March quarter, despite the ongoing conflict in Ukraine, US-China tensions, and the collapse of Silicon Valley Bank (SVB) which placed downward pressure on US and European financial stocks in the latter part of the quarter (noting that the Fund did not have any exposure to SVB). The PAN-Tribal Global Equity Fund returned 6.77% (net of fees) over the quarter, whilst the MSCI ACWI returned 8.65% in Australian dollar terms. Over the rolling 12 months, the Fund finished 4.25% (net of fees) ahead of the index.
In line with the active, bottom-up investment discipline of Davis Advisors, stock selection was the predominant detractor from the Fund’s relative underperformance over the quarter. Sector allocation also detracted slightly whilst regional allocation was broadly flat. Strong stock selection was seen within the Communication Services sector with Meta (US) the standout performer. However, this was offset by relative underperformance within the Consumer Discretionary sector where JD.com (China), Delivery Hero (Germany) and Meituan (China) all underperformed. Stock selection also detracted, albeit to a lesser extent, within the Health Care and Information Technology sectors.
Performance Commentary - February 28, 2023 After outperforming strongly in January, the PAN-Tribal Global Equity Fund consolidated some of its previous gains to return negative 0.38% in February in what was a more subdued month for global equities. The MSCI ACWI (in AUD) returned 1.50%. While the US Federal Reserve increased interest rates over the month, such an increase was widely anticipated by the market and therefore failed to surprise investors.
Stock selection was strong within the Communication Services sector over the month led by Meta (US) and iQiyi (China), however, this was more than offset by underperformance within the Consumer Discretionary sector.
Neither JD.Com, China’s largest online retailer, nor Delivery Hero, a large European online food delivery service were immune to the protracted downward pressure on global consumer discretionary spending with investors selling off both stocks sharply.
Sector allocation detracted slightly from relative performance during February whilst regional positioning detracted more markedly, with the overweight to emerging markets (notably via China) the largest underperformer. It’s important to recall that both sector and regional positioning within the Fund is a direct output of the bottom-up stock selection process.
The Fund exited its position in Alibaba during February, whilst there were no new purchases over the month.
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