Fund Objective: The Rivkin Global Equity Fund aims to produce positive average annual returns while seeking to maintain a level of volatility lower than that of the MSCI World ex Australia 100% Hedged to AUD Index over the same investment period.
31 December 2020 Unit Price – A$1.0018
Welcome investors to the monthly update for the Rivkin Global Equity Fund (GEF) for December 2020. For the month of December, the GEF gained 3.02%, concluding with a NAV price of 1.0018.
| PORTFOLIOS | GEF |
|---|---|
| Latest Month | 3.02% |
| QTD | 9.90% |
| Calendar YTD | 3.66% |
| Financial YTD | 21.53% |
| 12m | 3.66% |
| Inception | 1.17% |
Monthly Commentary
December tends to be a quieter month for equities, with volumes declining markedly, particularly over the last two weeks, as Christmas holidays begin. Despite the decrease in activity, historically, December has also been a very positive one in terms of performance. Assessing the performance for 2020, the broad S&P500 slowly ground higher for much of the month, finishing with a gain of 3.71%. Unlike the ASX200, the main US stock Indices have all managed to fully recouped the large declines from earlier in the year, moving to new all-time highs.
Overall, equity markets remain buoyant, despite much of the news flow remaining pessimistic. The two major global events at present remain the Covid-19 pandemic, which shows no sign of slowing. More so, despite the rollout of vaccines across the US and UK, infection rates continue to surge, leading to new lockdowns being imposed. Even in Australia, Brisbane has recently announced a 3-day hard lockdown, based on a confirmed case of the more virulent strain of the virus from the UK. Such measures, while necessary, will only serve to prolong the road to recovery within the real economy.
The other major event is the transition in power in the US, which is going less than smoothly, thanks to continued claims of fraud from Trump. At least on this front, this should be well behind us come our update at the end of January, with Joe Biden due to be sworn in on Inauguration day, which is January 20th. We expect that once the Biden administration takes office, one of the first tasks will be to implement an additional stimulus package, in order to support jobs, and the economy more broadly. There is already talk that in addition to the US$2,000 in cash payments, Biden is looking at a US$3 trillion infrastructure and tax package. We envisage that while such measures are focused on the real economy, the benefits will flow through to stock prices as well.
In terms of the current composition of the portfolio, there has been little change over the course of December. We continue to hold a relatively small cash weighting of 8.5% as of month end. Our Momentum and Quality strategy are largely fully invested; however we have reduced our overall exposure to these strategies slightly, in favour of some additional discretional names, which in particularly, we believe will benefit from some of the new policies that the Biden team have flagged they will focus on, more specifically around solar and renewable energy. Specific examples include Enphase Energy (ENPH) and SunPower Corp. (SPWR), which have both performed strongly since entry into the portfolio. Information technology (33.5%), and health care (+20.8%) remain our largest sector exposures at present.
2020 was quite an extraordinary year, both in terms of global events, but also share market performance. The speed of the February to March decline, as well as the relentless recovery since then goes to highlight the near impossible task of predicting stock market performance. It is partly for this reason, i.e. the difficulty in prediction, that so many of our strategies use a systematic approach to guide our investments. As it relates to our momentum strategies, which can and do go to cash when markets roll over, with strong uptrends currently in place, our portfolios remain fully invested as we start the new year.
If you have any questions regarding the above or your investments with Rivkin in general, please call us on 02 8302 3605.
Performance
NAV Price Chart
Monthly Returns
Portfolio Composition
Sector Breakdown
Top 10 Stock Holdings
Strategy Weighting
Fund Description & Information
The Fund invests predominantly in listed Global companies listed on developed market exchanges whose characteristics satisfy one or more of the strategies that occupy the portfolio. These strategies include: Momentum, being securities that are enjoying positive price trends; Quality, being companies with robust earnings profiles that are priced favourably versus their peers; and Defensive, being securities that provide a combination of characteristics including fixed income or high yield returns, negative or low short-term correlation to risk markets like equities or outcomes that we consider to be market-neutral. The Fund operates within the context of a rules-based framework that encourages a disciplined, long-term approach to equity exposure among developed global markets.
Important Disclaimer
The Rivkin Global Equity Fund is available to wholesale investors only. Past performance is not a reliable indicator of future performance. The value of your investment may rise and fall, and you may not receive the amount originally invested.
Contact
Thomas Silitonga – Director, Rivkin Asset Management
thomas.silitonga@rivkin.com.au – +612 8302 3605
