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 October 2020 Unit Price – A$0.8709
Welcome investors to the monthly update for the Rivkin Global Equity Fund (GEF) for October 2020. For US equities, the month of October was marked by an initial rally, only to be followed by a quick decline into month end. As a result, the initial gains were more than completely reversed by month end, with the S&P500 closing 2.66% lower, while the tech heavy, Nasdaq100 declined 3.20% for the month. The NAV price for the GEF as at 30th October was 0.8709, representing a decline of 4.32% for the month.
| PORTFOLIOS | GEF |
|---|---|
| Latest Month | -4.32% |
| QTD | -4.32% |
| Calendar YTD | -9.75% |
| Financial YTD | 5.80% |
| 12m | -4.38% |
| Inception | -11.92% |
Monthly Commentary
As we mentioned in our update for September, we suspected that volatility would increase during October, largely because of the US election in early November. And while we did see a minor selloff into month end, prices have rebounded rather quickly during the first week of November, suggesting that any major fears surrounding the election were unfounded.
We have maintained a relatively aggressive allocation to equities over this time, with the cash weighting in the GEF decreasing from 22% at the end of September to be at 13.6% by the end of October. In terms of our allocation to US shares, which collectively account for 86.4% of total assets, our largest weightings are currently in technology and consumer discretionary stocks, at 32.2% and 23.0% respectively.
With the uncertainty of the US election now largely behind us, equity markets will begin discounting what 2021 has in stall. With Joe Biden holding a commanding position to take the presidency, while the Republicans will likely retain the Senate, we are currently looking towards at least 2 years of gridlock in Washington. This may actually prove a positive for US equity markets, as the proposed US corporate tax hikes by Biden will now likely stall, while the recent push by the Republicans to break up the tech giants will now be off the table. The big unknown will be the size of the next round of government stimulus, however post-election, both parties will be more eager to get a deal done.
Another consideration is that November and December tend to be good months for US equity markets from a seasonal perspective, with prices tending to lift higher into the Xmas period.
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
