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 May 2020 Unit Price – A$0.7888
Welcome investors to the monthly update for the Rivkin Global Equity Fund (GEF) for May 2020. The GEF gained 0.50% throughout the month of May, with the NAV price at 0.7888 as of month end.
| PORTFOLIOS | GEF |
|---|---|
| Latest Month | 0.50% |
| QTD | 8.06% |
| Calendar YTD | -18.17% |
| Financial YTD | -13.15% |
| 12m | -9.57% |
| Inception | -20.13% |
Monthly Commentary
As we have done in the Australian Equity Fund (AEF), throughout the month of May, we made the decision to remove our allocation to the Resco Macro Credit Fund, which we had been using as a defensive allocation, given the negative correlation to equity markets. We wish to reiterate, that this is not based on our short-term view of the current landscape, but more a longer-term desire to focus the GEF to be 100% focused in US equities. As some investors may or not know, we do offer a Low Volatility strategy as a standalone portfolio, which can be used to reduce overall investment risk if desired.
The GEF portfolio remains defensively positioned as of month end, with a cash weighting of 50.9%, thanks mainly to the fact that the US Momentum strategy remains fully in cash. This is likely to change over the coming weeks however as US equities continue to recover from the February to March decline. The process of the Momentum strategy building cash can be a two-edged sword, in that while such an approach will reduce the portfolio drawdown in the event of a sustained bear market, it can leave the portfolio underinvested when the market experiences a sharp decline and subsequent reversal.
Similarly to what we have done with the AEF, the 20% that had been earmarked for defensive, will now be allocated to a discretionary portfolio of US equities, focused on large cap stocks that as an investment team we find compelling. In the current environment we are favouring those companies that will benefit from the continued shift to online commence, while also focusing on ‘bricks and mortar’ companies that focus mainly on necessities over discretionary goods.
As of the end of May, 13.2% of the portfolio has been invested, into the following 5 stocks, being Microsoft (MSFT), Amazon (AMZN), Netflix (NFLX), Proctor and Gamble (PG) and Walmart (WMT). We would ideally like to see a short-term market pullback before deploying additional capital on a discretionary basis, as prices are becoming stretched in the short-term. This 20% component of the overall portfolio will not always be fully invested, meaning there will be times that we view cash as the better option.
The portfolio ended the month of May with a much more diverse spread across the major market sectors, with consumer discretionary and information technology companies accounting for 23.2% and 20.0% respectively, with between 10% and 14% of capital across communications, consumer staples, industrials, and the financials.
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
