Perennial Value Shares Wholesale Trust aims to grow the value of your investment over the long term via a combination of capital growth and income, by investing in a diversified portfolio of Australian shares, and to provide a total return (after fees) that exceeds the S&P/ASX 300 Accumulation Index measured on a rolling three-year basis. The Trust aims to achieve this objective by investing into the Perennial Value Australian Shares Trust. Perennial Value Management Limited (PVM) is a clearly defined bottom-up value driven manager with a value bias less pronounced than that of a deep value investment manager. PVM aims to identify and invest in quality companies, with sustainable businesses where the share price is trading at a discount to valuation. Lonsec’s style analysis confirms PVM’s adherence to its discipline and time tested true to label process.
Markets were weaker again in September, with stronger than expected economic data pushing bond yields higher. By contrast, the economic news from China continued to be weak. This saw the S&P500 fall -4.9%, the NASDAQ decline -5.8%, and the Nikkei 225 give back -2.3%. The FTSE100 bucked the trend, rising +2.3% as inflation data in the UK came in lower than expected. After a sharp fall last month, the Shanghai composite was relatively stable, down only – 0.3%, as a number of additional stimulus measures were put in place over the month.
The Australian market was also weak, with the ASX300 Accumulation Index finishing the month down -2.9%. The domestic economic data remains strong, and inflation continues to ease, allowing the RBA to remain on hold at its September meeting. However, we would caution that this data is backward looking, and given the long lags in the transmission of monetary policy, the impact of previous rate increases is still yet to be fully felt on the real economy.
Energy (+2.2%) was the only sector to deliver a positive return in September, as production cuts by OPEC+ combined with strong demand to see the oil price rise to over US$87/bl. Metals and Mining (-1.4%) outperformed as the iron ore price remained resilient, despite the China weakness. Financials (-1.6%) also outperformed in a relative sense, with signs of an easing in mortgage competition supporting the banks. Interest rate sensitive sectors underperformed as bond yields rose, with REITs (8.7%), IT (-7.7%) and Healthcare (-6.4%), the worst performing sectors.
What is Perennial Value Shares Wholesale Trust Perennial Value Shares Wholesale Trust 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 Perennial Value Shares Wholesale Trust has Assets Under Management of 568.56 M with a management fee of 0.92%, a performance fee of 0.00% and a buy/sell spread fee of 0.6%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Perennial Value Shares Wholesale Trust has returned 7.11% in the last month. The previous three years have returned 10.14% annualised and 14.28% each year since inception, which is when the Perennial Value Shares Wholesale Trust 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 Perennial Value Shares Wholesale Trust first started, the Sharpe ratio is 0.39 with an annualised volatility of 14.28%. The maximum drawdown of the investment product in the last 12 months is -7.39% and -44.41% 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 Perennial Value Shares Wholesale Trust has a 12-month excess return when compared to the Domestic Equity - Large Value Index of 1.03% and -0.32% 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. Perennial Value Shares Wholesale Trust has produced Alpha over the Domestic Equity - Large Value Index of 0.05% in the last 12 months and -0.06% 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 Perennial Value Shares Wholesale Trust provide?
Perennial Value Shares Wholesale Trust has a correlation coefficient of 0.98 and a beta of 1.09 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 Perennial Value Shares Wholesale Trust and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Perennial Value Shares Wholesale Trust with the ASX Index 200 Index?
For a full quantitative report on Perennial Value Shares Wholesale Trust compared to the ASX Index 200 Index, you can click here.
Can I sort and compare the Perennial Value Shares Wholesale Trust to do my own analysis?
To sort and compare the Perennial Value Shares Wholesale Trust financial metrics, please refer to the table above.
Has the Perennial Value Shares Wholesale Trust 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 Perennial Value Shares Wholesale Trust?
How do I get in contact with the Perennial Value Shares Wholesale Trust?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Perennial Value Shares Wholesale Trust. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - August 31, 2023 Markets were generally softer in August, with good economic news in the US being interpreted as bad for equities as it suggested rates will remain higher for longer. At the same time, bad economic news in China was interpreted as also being bad for equities, as what has been the main engine of global growth continued to splutter. This saw the S&P500 fall -1.8% and the NASDAQ decline -2.2%, while the FTSE100 fell -3.4% and the Nikkei 225 gave back -1.7%. The continuing weak Chinese data, and renewed concerns over the property market, saw the Shanghai composite fall -5.2%.
After selling off in the early part of the month, the Australian market staged a late recovery, with the ASX300 Accumulation Index finishing the month down only -0.8%. Reporting season was the highlight of the month. Many of the more cyclical stocks delivered better than feared results, while many of the defensives disappointed. Overall, results were sound, and highlighted that the economy continues to perform strongly. The RBA remained on hold at its August meeting, and inflation continued to ease. Retail sales bounced, house prices continued to rise, and employment remained strong.
The better than feared results from consumer-facing stocks saw Consumer Discretionary (+5.8%) the best performing sector for the month, followed by REITs (+2.2%), which also experienced a relief rally. Energy (+0.7%) also outperformed. By contrast, Metals and Mining (-2.5%) underperformed, weighed down by the negative China sentiment and generally softer commodity prices. Consumer Staples (-3.1%) were also softer as investors rotated towards more discretionary exposures.
Performance Commentary - July 31, 2023 After selling off in the earlier part of the month, markets staged a strong recovery to finish up strongly. While most central banks raised rates in July, improving inflation data supported the view that we are close to the end of the tightening cycle. At the same time, ongoing healthy economic data gave rise to optimism that a soft landing may be achievable. This saw the S&P500 gain +3.1%, the NASDAQ rally +4.0% and the FTSE100 rise +2.2%. Despite Chinese economic data continuing to be weak, the Shanghai composite added +2.8% on hopes of further stimulus measures. By contrast, the Nikkei 225 eased -0.1%, following its very strong recent performance.
The Australian market was also strong, with the ASX300 Accumulation Index finishing the month up +2.9%. The market reacted positively as the RBA paused its rate increases, leaving the cash rate unchanged at 4.1% in July. As in other markets, there are clear signs that inflation has peaked, while economic data remains robust, with key measures such as employment, spending and house prices remaining resilient. However, we would caution that this data is backward looking and given the long lags in the transmission of monetary policy, the impact of previous rate increases is still yet to fully felt on the real economy.
Energy (+8.4%) was the best performing sector, with the oil price rallying on OPEC+ production cuts and the improving global outlook. Easing inflation and interest rate expectations also saw Financials (+4.9%), IT (+4.8%), Utilities (+4.0%) and REITs (+3.9%) outperform.
Performance Commentary - June 30, 2023 Markets were strong in June, with improving inflation trends and a pause by the Fed, seeing a broadening of the rally in US equities from the Tech sector to other parts of the market. The NASDAQ added +6.6%, while the S&P500 rallied +6.5% on stronger economic data and the hope that the rate rise cycle is over, despite Jerome Powell saying that more rate rises are expected. The Nikkei 225 rose +7.5%, while the FTSE 100 was up a more modest +1.1%. The exception was the Shanghai Composite, which eased -0.1%, on concerns over the faltering Chinese post-COVID recovery.
The Australian market was also strong, with the ASX300 Accumulation Index finishing the month up +1.7%. Despite the RBA lifting the cash rate again, investors took a positive stance as inflation eased and economic data remained robust, with retail sales rebounding, house prices rising and very strong jobs growth in May. However, we would caution that this data is backward looking, and the impact of previous rate increases is still yet to be fully felt. While the economy is proving very resilient, some cracks are starting to appear, with several retailers issuing profit downgrades and building approvals falling sharply.
Metals and Mining (+5.0%) was the best performing sector, with commodity prices generally higher over the month, despite the Chinese growth concerns. Financials (+3.1%) also outperformed, as the major banks found some support. Defensive sectors were weaker as sentiment turned more positive on the economic outlook.
Healthcare (-6.4%) was the man detractor, led lower by CSL, while Telcos and REITs also underperformed.
Performance Commentary - May 31, 2023 During the month we took profits and trimmed our holdings in Tabcorp, United Malt and Newcrest. Proceeds were used to increase our holdings in the Resources and Energy sectors following their being sold off. At month end, stock numbers were 53 and cash was 4.2%.
The Trust delivered -2.7%, after-fees in May, underperforming the benchmark by -0.2%. Key positive contributors to performance included Telix Pharmaceuticals (+15.3%), which added to its very strong performance in April.
James Hardie (+13.1%) was also stronger, with indications that the US housing market has stabilised after being impacted by the rapid rise in mortgage rates. James Hardie is primarily exposed to the renovation, as opposed to new construction market, however, it has still been impacted by the current slowdown. While the company is subject to the cycle, over time it has consistently outgrown the overall market as its premium, differentiated products take share from other building materials. Management continue to focus on investing in the brand and distribution channels and we expect this to continue to drive double-digit earnings growth over the medium term.
Healthcare stocks were stronger during the month, with Integral Diagnostics and Healius (both +5.7%) outperforming as industry data showed that patient volumes were recovering from COVID disruptions. CSL (+1.9%) also outperformed, with plasma collections having rebounded to above pre-COVID levels.
Performance Commentary - April 30, 2023 Further indications that inflation has peaked, combined with the banking sector issues apparently abating, saw markets trade positively in April. Key global indices rose, with the S&P500 +1.5%, the FTSE100 +3.1%, the Nikkei 225 +2.9%, the Shanghai Composite +1.5% and the NASDAQ +0.4%.
The decision by the RBA to pause its rate rises at the April meeting lifted sentiment and boosted the Australian market, which returned +1.8% for the month. The prospect of interest rates having peaked saw a relief rally in those sectors most leveraged to bond yields, with REITs (+5.2%) and IT (+4.5%) the best performing sectors over the month. The rally was broad-based, with Australian economic data remaining strong.
The unemployment rate continues to be at record lows and consumer spending remains robust. Further, the housing market appears to have stabilised, with prices showing modest gains in March and April. This was very positive for sentiment, with housing being a key underpinning of the economy. Metals & Mining (-3.2%) was the only sector to deliver a negative return in April, as commodity prices weakened on concerns over slowing Chinese growth.
Performance Commentary - March 31, 2023 Further indications that inflation has peaked, combined with the banking sector issues apparently abating, saw markets trade positively in April. Key global indices rose, with the S&P500 +1.5%, the FTSE100 +3.1%, the Nikkei 225 +2.9%, the Shanghai Composite +1.5% and the NASDAQ +0.4%. The decision by the RBA to pause its rate rises at the April meeting lifted sentiment and boosted the Australian market, which returned +1.8% for the month. The prospect of interest rates having peaked saw a relief rally in those sectors most leveraged to bond yields, with REITs (+5.2%) and IT (+4.5%) the best performing sectors over the month. The rally was broad-based, with Australian economic data remaining strong. The unemployment rate continues to be at record lows and consumer spending remains robust. Further, the housing market appears to have stabilised, with prices showing modest gains in March and April. This was very positive for sentiment, with housing being a key underpinning of the economy. Metals & Mining (-3.2%) was the only sector to deliver a negative return in April, as commodity prices weakened on concerns over slowing Chinese growth.
Performance Commentary - February 28, 2023 The Trust returned -2.0%, after-fees in February, outperforming the benchmark by +0.5%. The market continues to oscillate between optimism that inflation has peaked, meaning that the interest rate increases are close to an end, and pessimism that inflation will prove persistent and that rate rises have a way to go yet. On this front, n y’s optimism gave way to pessimism, as strong economic data suggested that Central Banks have more work to do. The reporting season was the highlight of the month in the domestic market. For the past several reporting periods, results have come in slightly ahead of market expectations, with the stronger than expected economic backdrop providing good support to corporate earnings.
This period, however, while results were solid, overall they came in slightly below market expectations, with the first signs of slowing starting to appear. While revenue growth was stronger than expectations, margins are beginning to be pressured by rising input costs and guidance indicated that consumer spending has eased in the early part of this year. Key positive contributors to performance included packaging company, Orora (+18.5%), which delivered a solid result and reiterated full-year guidance. The market had been concerned that its US business would be experiencing some weakness, however, this has proven not to be the case.
Their Australian operations also continue to perform well and have baked-in growth from capacity expansions in their can business, which are due to come online shortly. This expanded capacity has been pre-sold to existing customers under long-term contracts, locking in the necessary return on investment. Orora is a major supplier of wine bottles and there is further upside to this business should the thaw in relations see Chinese wine tariffs removed, as this would significantly increase export volumes and demand for bottles. Orora has many attractive attributes in the current market, with relatively defensive earnings and low risk organic growth, combined with strong management and an attractive valuation.
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