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 March 2020 Unit Price – A$0.7292
Welcome investors to the monthly update for the Rivkin Global Equity Fund (GEF) for March 2020. The pace of the equity market selloff has accelerated over the month of March, as the health and economic fallout from the Coronavirus was quickly priced into listed equities. Rivkin Global Equity Fund (GEF) declined 19.03% in March, finishing the month at 0.7292. Clearly, a disappointing month.
Monthly Commentary
March was a tough month for equity markets, both locally on the ASX and in the US. An acceleration in the spread of the Coronavirus across the world has led to many governments introducing strict ‘social distancing’ measures, such as only leaving home for a necessary purpose, limiting gathering of two people or less in public, and in some countries closing schools. This has had a dramatic impact on many businesses, particularly those related to travel and tourism, and services such as restaurants, cafes, and retail.
Despite the strong fiscal response from many governments, the reality is that many people have found themselves out of work in short order. This is evident in the US, where initial jobless claims spiked to 6.64 million people last week, which is more than 10 times the peak from the GFC of 2008-2009. Some economists in the US are already suggesting an unemployment rate of between 15% and 20% later in the year.
The US Government, while slow off the mark, has recently announced a US$2.2 trillion support package, to support workers and small businesses over the coming six months. Called the CARES ACT, the premise of the legislation is to get loans and cash into the hands of small business and individuals as quickly as possible.
In terms of the portfolio, the momentum portfolio, which when fully invested accounts for 40% of assets, has now completely moved to a cash position by the end of the month. As a result, the cash weighting in the portfolio has gone from 5.3% to 35.0%. We have also increased the weighting to the defensive credit macro strategy, which is now 29.9% of FUM, up from 21.7% at the beginning of the month. This leaves us with 35.1% allocated to direct equities, via the Quality strategy.
More so, the composition of the portfolio in terms of the sector exposure has changed quite markedly. Stocks from the information technology sector, which were largely from the Momentum portfolio have been sold, reducing the sector exposure to 0. This leave the consumer discretionary and financials as the two largest sector weightings, at 49.8% and 32.9% respectively. We have recently made several discretionary decisions to reduce some of the sector concentration in the portfolio.
While 2020 has started out as a turbulent year both in the real economy and across financial markets, the Global Equity Fund is currently positioned rather defensively with 35/65 split between equities and defensive assets.
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
