September was the worst month of the year to date for Global Equities (-3.0%) with Energy, Financials, Consumer Discretionary and Consumer Staple sectors outperforming, whilst Materials, Utilities, Communication Services and Information Technology underperformed. US equities (-3.6%) and European equities were aligned (-3.7%). Tightening and forecast tightening by central banks, US treasury debt ceiling negotiations, German elections, inflation worries and risks from China all contributed to this weakness.
Asian equities outperformed (-0.5%) with Chinese equities down (-1.6%) with worries about Evergrande financial contagion, power cuts and further regulatory worries. Japan was strong (+4.0%) with a new Prime Minister expected to bring expansionary fiscal policy.
Elsewhere, Brent Crude (+9.5% in USD) was rallying again along with the rest of the energy complex due to a squeeze on supply, while Gold (-3.1%) was down and the US Dollar (DXY +1.7%) was strong.
Key contributors included:
Key detractors included:
|30 Sep 2021||1 month||-2.8||-3.0||0.2|
|30 Sep 2021||3 month||-5.5||-5.8||0.2|
|30 Sep 2021||Year to date||2.2||3.1||-0.9|
|30 Sep 2021||1 year||13.9||13.5||0.4|
|30 Sep 2021||3 year p.a.||8.3||9.3||-0.9|
|30 Sep 2021||5 year p.a.||11.0||11.4||-0.4|
|30 Sep 2021||Inception p.a.||9.5||8.6||1.0|
Past performance is not a reliable indicator of future performance. Returns are quoted in AUD and net of applicable fees, costs and taxes. All p.a. returns are annualised.
|30 Sep 2021||Average net exposure||74.9%|
|30 Sep 2021||Upside capture ratio||82|
|30 Sep 2021||Downside capture ratio||47|
|30 Sep 2021||Portfolio standard deviation||9.7%|
|30 Sep 2021||Benchmark standard deviation||11.2%|
|30 Sep 2021||Sharpe ratio||1.02|
3 All metrics are based on gross of fee returns in AUD terms. The upside/downside capture ratio is the percentage of benchmark performance captured by the fund during months that the benchmark is up/down. Standard deviation is a measure of risk with a smaller figure indicating lower return volatility. The Sharpe ratio measures returns on a risk adjusted basis with a figure > 1 indicating a higher return than the benchmark for the respective levels of return volatility.
|Asia||30 Sep 2021||18 Nov 2021||POSITION||Long||-2.8%|
|Asia||30 Sep 2021||18 Nov 2021||POSITION||Short||0.0%|
|Asia||30 Sep 2021||18 Nov 2021||POSITION||Currency||0.1%|
2 Based on gross returns in AUD
5 Antipodes classification
|30 Sep 2021||Fund AUM||Asia||AUD||$86m|
|30 Sep 2021||Strategy AUM||Asia Long-Short||AUD||$94m|
|30 Sep 2021||Unit redemption price||Antipodes Asia Fund (Class P)||AUD||1.3234|
|blank||Equities - Long||Other - Long||Equities - Short||Other - Short|
|Avg. weight (%)||2.7||-||-0.3||-|
|Top 10 (%)||53.1||-||-||-|
|Top 30 (%)||90.1||-||-||-|
4 Call (put) options represented as the current option value (delta adjusted exposure)
3 Antipodes classification
|China Mengniu Dairy||China/HK||3.9|
|LONGi Green Energy Technology||China/HK||3.1|
7 Where possible, regions, countries and currencies classified on a look through basis
|- China/Hong Kong||50.1||-1.0||49.1||0|
|- Rest Developing Asia/EM||3.4||-||3.4||0|
|Rest of World||3.1||-||3.1||1|
|Large (>$25b <$100b)||32.1||-0.6||31.5|
|Medium (>$5b <$25b)||11.7||0.0||11.7|
• Global pragmatic value manager, long only and long-short
• Structured to reinforce alignment between investors and the investment team
• We attempt to take advantage of the market’s tendency for irrational extrapolation, identify investments that offer a high margin of safety and build portfolios with a capital preservation focus
• Objective to achieve absolute returns in excess of the benchmark over the investment cycle (typically 3-5 years)
• The fund may invest in companies that are listed:
▪ On Asian share markets
▪ On global share markets and which derive >65% of their
revenues from Asia
▪ In Japan (maximum 30% net exposure)
▪ In Oceania and non-Asian emerging markets (maximum 15%
• In the absence of finding securities that meet minimum risk-return criteria, cash may be held
• Flexibility to hedge for risk management purposes:
• Equity shorts and currency positions used to take advantage of attractive risk-return opportunities, offset specific long portfolio risks and provide some protection from negative tail risk. Derivatives may also be used to amplify high conviction ideas
• Typical net equity exposure of 50% to 100%; maximum gross exposure of 150% of NAV
1300 010 311
Antipodes Partners Limited
Level 35, 60 Margaret St
Sydney NSW 2000
Antipodes Partners Limited
6th Floor, Nova North
11 Bressenden Place
London SW1E 5BY UK
This communication is prepared by Antipodes Partners Limited (‘Antipodes’) ABN 29 602 042 035 AFSL 481580 as the investment manager of the Antipodes Asia Fund (ARSN 096 451 393) (‘the Fund’). Pinnacle Fund Services Limited ABN 29 082 494 362 AFSL 238371 (‘PFSL’) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) ABN 22 100 325 184. The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the Fund is available at www.antipodespartners.com. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.
This communication is for general information only. It is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice before doing so. Past performance is for illustrative purposes only and is not indicative of future performance. Options exposure represents the market downside. For put options (typically used to limit potential downside) delta-adjusted exposure is used and for call options (typically used to capture potential upside) exposure is calculated using the current option value. Unless otherwise specified, all amounts are in Australian Dollars (AUD).
Whilst Antipodes, PFSL and Pinnacle believe the information contained in this communication is reliable, no warranty is given as to its accuracy, reliability or completeness and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Antipodes, PFSL and Pinnacle disclaim all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information. This disclaimer extends to any entity that may distribute this communication.
Any opinions and forecasts reflect the judgment and assumptions of Antipodes and its representatives on the basis of information available as at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future.
Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this communication is prohibited without obtaining prior written permission from Antipodes. Pinnacle and its associates may have interests in financial products and may receive fees from companies referred to during this communication.
The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned November 2020) referred to in this document is limited to “General Advice” (as defined by the Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Zenith usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessment’s and at https://www.zenithpartners.com.au/RegulatoryGuidelines.
The Lonsec Ratings (assigned March 2021) presented in this document are published by Lonsec Research presented in this document are published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421445. The Ratings are limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial products. Past performance information is for illustrative purposes only and is not indicative of future performance. They are not a recommendation to purchase, sell or hold Antipodes products, and you should seek independent financial advice before investing in these products. The Ratings are subject to change without notice and Lonsec assumes no obligation to update the relevant documents following publication. Lonsec receives a fee from the Fund Manager for researching the products using comprehensive and objective criteria. For further information regarding Lonsec’s Ratings methodology, please refer to our website at: https://www.beyond.lonsec.com.au/intelligence/lonsec-ratings.