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.
30 April 2020 Unit Price – A$0.7848
Welcome investors to the monthly update for the Rivkin Global Equity Fund (GEF) for April 2020. The GEF gained 7.52% throughout the month of April, with the NAV price at 0.7848 as of month end.
Monthly Commentary
The Global Equity Fund begun the month with a rather low exposure to equities at just 35.10%, predominately since the Momentum portfolio, which typically comprises 40% of funds, was in a 100% defensive cash position. And while the momentum portfolio remains fully in cash as of the end of April, our total exposure to equities has risen to be currently at 48.8%. Not only have we seen the Quality portfolio increase back to a weighting of 40.4%, but we have made several discretionary investments into some of the larger cap US equities, which have held up better than most since this sell off began.
Names such as Microsoft (MSTF), Proctor and Gamble (PG), and Walmart (WMT) are now current holdings. It is our intention to increase our exposure to the large cap segment of the S&P500 even further, to approximately 20% over the coming weeks. At the end of the month however, in addition to the 48.8% weighting to equities, the Fund held a 28.5% position in a defensive macro credit strategy, and a 22.7% weighting to cash. To summarise, the portfolio currently sits at approximately 50%/50% between stocks and defensive assets, which we expect to move towards 60%/40% in the relatively near future.
In addition to the discretionary decision to expand our holdings into some of the largest, most well established companies, we have also reduced the sector exposure within the portfolio, by limiting the number of stocks held in any one particular sector. While the consumer discretionary and financial sectors remain our largest weights at 24.3% and 22.7% respectively, both have reduced from the month prior. Following this, we hold approximately 10% of equity exposure in each of the communications, energy, industrials, and consumer staples sectors.
The situation regarding the spread of Covid-19 looks worse in the US than Australia. Whereas locally, we have been able to reduce the number of daily new cases down to minimal levels, the US is still registering over 20,000 new cases per day, with the number of total confirmed cases now more than 1.2 million. Despite this, President Trump is eager to reopen the US economy as quickly as possible, to limit the economic damage. Even though it is likely to be some time before the economic data shows improvement, it is important to remember that while economic data is backwards looking, the stock market is always pricing in the future, meaning stock prices will bottom well before the economic data shows improvement.
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
