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 August 2020 Unit Price – A$0.9317
Welcome investors to the monthly update for the Rivkin Global Equity Fund (GEF) for August 2020. The GEF continues to recover strongly, with a gain of 6.6% in August, with the NAV price ending the month at 0.9317. Looking at the performance of equity markets more broadly, the recovery off the March lows continues, with both Australian and US share markets pushing higher throughout August. By month’s end, the ASX Accumulation Index had gained 2.83%, while in the US, the S&P500 Total Return Index added 7.19%.
| PORTFOLIOS | GEF |
|---|---|
| Latest Month | 6.65% |
| QTD | 13.11% |
| Calendar YTD | -3.52% |
| Financial YTD | 13.11% |
| 12m | 4.51% |
| Inception | -5.84% |
Monthly Commentary
We discussed last month how US equities have far outperformed local equities since the recovery began, with this performance differential only widening further throughout August. This is best demonstrated by Chart 1 below, which shows the relative performance of the ASX200, S&P500, and Nasdaq100 since March 23, which was the date that the recovery from the February to March decline began. Since that date, and up until September 2, the ASX200 has rallied 33.3%, returning prices to around the 6100 level, and still some 15% or so below the prior peak at around 7200. Compare this to both the S&P500 (+56.4%) and the Nasdaq100 (+72.8%) which have now both fully retraced the prior decline to be setting new all-time highs. This outperformance can be largely explained by the large weighting to technology stocks in the US (particularly the Nasdaq), which have been significant beneficiaries of the increased shift to online shopping and communications brought about by the COVID-19 pandemic.
Chart 1 – Relative Performance from March 23 to September 2.
In terms of the current positioning of the GEF, we ended the month of July with a cash weighting of 17.3%. By the end of August, cash as a percentage of the portfolio has been decreased to 6.9%, as we have added exposure across the Momentum, Quality, and Discretionary portfolios. We wish to reiterate that this is a snapshot as of month end. More recently in early September, we have reduced the overall exposure to equities back to approximately 75%, as US equity markets have become increasingly overbought, and at risk of a pullback in the short-term. Notable performers from the portfolio in August were Tesla (TSLA), Zoom Video Communications (ZM), and NVIDIA (NVDA) which gained 74.2%, 28.0%, and 26.0% respectively.
With the US Presidential election only a little over two months away, we believe that this will become the key event that equity investors will focus on for the foreseeable future. One thing that equity markets dislike is uncertainty, which is looking increasingly likely with the upcoming election, especially given the possibility of a large percentage of mail in voting, which will inevitably delay the result.
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
