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 June 2020 Unit Price – A$0.8226
Welcome investors to the monthly update for the Rivkin Global Equity Fund (GEF) for June 2020. The GEF gained 4.23% in June, with the NAV price ending the month at 0.8226. The fund benefitted from our much reduced cash weighting, which declined from 50.9% at the end of May to just 7.6% by month end, as well as a decent weighting to technology stocks, which have far outperformed other sectors of the US equity markets. This is demonstrated by the fact that while the S&P500 gained 1.84% in June, the Nasdaq100 rallied 6.29%.
| PORTFOLIOS | GEF |
|---|---|
| Latest Month | 4.23% |
| QTD | 12.64% |
| Calendar YTD | -14.70% |
| Financial YTD | -9.47% |
| 12m | -9.47% |
| Inception | -16.75% |
Monthly Commentary
Before we discuss the current fund composition in more detail, we have a note regarding the end of financial year tax reporting. The 2020 end of financial year accounts are currently in the process of being lodged, which are conducted by EY (Ernst and Young) in conjunction with Mainstream the administrator, as well as oversight from Rivkin and Perpetual. This process tends to take 4-6 weeks, as all funds in Australia need to complete this process at the same time. As such, we expect that the 2020 tax documents will be ready for our investors by mid-August, at which point we will email these directly to each investor.
With the S&P500 rallying back above its long-term 200-day moving average, the US Momentum portfolio has moved back into equities. This strategy sources stocks limited to either the Nasdaq100 or S&P100, meaning it is limited to the larger cap stocks in the US. Currently, a large proportion of the holdings are technology stocks, which as we mentioned above have been strongly outperforming the broader market on this recovery rally. Top performers since the momentum strategy moved back into equities has been Tesla (TLSA) and Zoom Communications (ZM), which as of month end are both up approximately 15%.
We have significantly increased our weighting to equities over the course of the month from approximately 50% to 90% of assets. As mentioned earlier, the US Momentum portfolio has re-entered the market, and currently accounts for 37.5% of assets, while the US Quality holds 35.9% of assets. The discretionary large cap portion of the portfolio is largely fully invested at 19.0%, out of a possible 20% allocation. As a reminder, we had previously allocated 20% to a defensive bond fund, however recently made the change to move this back into equities on a discretionary basis. The stocks currently selected in this discretionary portion of the portfolio include Microsoft (MSFT), Amazon (AMZN), Netflix (NFLX), Proctor and Gamble (PG), and Walmart (WMT). In terms of the portfolio’s sector composition, information technology stocks make up 39.9% of assets, followed by consumer discretionary and health care at 19.6% and 14.7% respectively. The top 10 weighted stocks, a list of which can be found below, account for approximately one third of total assets.
While there remains much negative news at present, surrounding the ongoing spread of Covid-19 and the economic ramifications of economies shutting down, US stock prices appear to be pricing in a much-improved outlook at present. We have said over the past few months that equity prices would always bottom well before the news turned positive. More so, the crisis, which is affecting physical stores, services, and business that rely on physical human interaction more than most, is funnelling demand (and eventually revenues and profits) to many online businesses, and we are seeing a shift towards these companies within our systematic strategies.
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
