The Research Monitor - Are Small Companies too expensive? ASX Tech sector returns like Moore's Law A partially Inverted Yield Curve + stock picks ...
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The Research Monitor
June Quarter 2019
inside this issue
Are Small Companies too expensive?
ASX Tech sector returns like Moore’s Law
A partially Inverted Yield Curve
+ stock picks
Q1 2019 Performance
The Australian Share Market, as measured by the S&P/ASX 300 Index,
recorded its best quarter since September 2009 – rising 9.5% in price
terms and 10.9% including dividends, after having produced the worst
quarter since 2011 in the previous quarter.
A strong rebound in global markets Energy sector returns recovered of global diversification for Australian
was mirrored in the domestic market following a bounce in the oil price. West investors. Bond markets rallied on
as bond yields fell, US/China trade Texas Intermediate oil prices rose 32.5% the back of lower long-term interest
talks progressed, central banks in the quarter and this pushed the rates with the Bloomberg AusBond
pivoted and fears of a slowdown in sector up 15.2% after dividends, with Composite (0+Y) index up 3.4% and
global growth waned. heavyweight Woodside Petroleum (WPL) Bank Bills returning 0.5%. The spread
up 10.5%. between 90-day bank bills and cash
Among Australian equity sectors, fell from 59 basis points at the end
all sectors posted positive returns The worst performing sector was of December to only 27 points at
during the quarter. Leading the Banks, followed by Food and Staples the end of March – a strong sign of
charge were the Software and Retailing where first half profit results easing credit conditions.
Telecommunication Services were disappointing. Woolworths (WOW)
sectors, up 19.9% and 17.9% including rose only 3.3% and rival Coles Group Long term interest rates in Australia
dividends respectively. These are (COL) rose only 0.9%. hit a record low of 1.72%, and
relatively small parts of the Australian measures of housing activity continued
market, comprising 2.45% and 2.82% Global equity markets also to show weakness, suggesting the
of the market. Globally, these sectors performed strongly in the March broader economy is coming off the
are much more significant and there are quarter, with the MSCI World ex boil somewhat. Market measures of
signs that local investors are “paying Australia Index in Australian dollars risk or volatility, fell significantly during
up” for these sectors to catch the global up 12.6%. Quite astonishingly, this the quarter, suggesting investors have
tailwind. brings compound returns over the past become comfortable with the likely path
ten years from global equities to 14.8% of inflation, interest rates, growth and
Whilst defensive industrial sectors such per annum – highlighting the importance trade.
as Food and Staples Retailing performed
relatively well in the December quarter,
these sectors performed relatively poorly Sector Performance Market Cap
in the March quarter, with the exception Energy 15.21% 94,822
being the “bond proxies” such as Real Materials 17.69% 319,035
Estate Investment Trusts (REITs) (up
Capital Goods 13.20% 15,681
14.4% including dividends) and the
Utilities sector (up 11.6% including Commercial & Professional Services 15.06% 43,288
dividends). There are 32 REITs in the Transportation 10.57% 79,188
ASX300 index and the best, Charter Hall Consumer Services 9.94% 49,698
Group (CHC) posted a 38.4% gain. The Retailing 14.78% 54,978
worst, Vicinity Centres (VCX) was flat. Food & Staples Retailing 4.09% 55,771
The largest component of the S&P/ Food, Beverage & Tobacco 7.68% 34,957
ASX 300 Index is the Banks Sector Health Care Equipment & Services 7.79% 49,715
(21.9% index weight), which rose Pharmaceuticals, Biotech & Life Sciences 6.06% 91,962
only 2.0% in price terms and 3.0% Banks 3.03% 369,551
including dividends, extending Diversified Financials 13.56% 85,464
the period over which banks have
Insurance 14.17% 65,802
underperformed the index. The
second largest – but closing in on being Software & Services 19.95% 41,374
the largest - sector, Materials (18.9% Telecommunication Services 17.89% 47,561
index weight) rose 17.7% including Media & Entertainment 12.58% 14,678
dividends, with bellwether BHP up Utilities 11.64% 33,788
12.5% despite paying over $2.20 in Real Estate 14.38% 123,968
dividends!
2 | Research Monitor | Jun 2019
Are Small Companies
too expensive?
Martin Crabb
Chief Investment Officer
Research Monitor | Jun 2019 | 3
Are Small Companies
too expensive?
Small Companies – defined as those in the All Ordinaries index
outside the Top 100 – traditionally trade at a small PE premium to
Large Companies due to their greater potential for growth. Based on
market consensus forecasts since 2005, this premium has averaged
3.9%. At current levels, this premium is 17.4% - a significant premium
to historical averages. Small Companies’ PE is 18.0x versus Large
Companies 15.3x, using consensus earnings estimates.
Price/Earnings Ratios Small Caps are more expensive than Large
19 20%
17 15%
10%
15
5%
13 0%
11 -5%
-10%
9
-15%
7 -20%
Jan 00
Jan 02
Jan 04
Jan 06
Jan 08
Jan 10
Jan 12
Jan 14
Jan 16
Jan 18
Nov 10
Nov 11
Nov 12
Nov 13
Nov 14
Nov 15
Nov 16
Nov 17
Nov 18
Nov 05
Nov 06
Nov 07
Nov 08
Nov 09
Small Large Small PE/Large PE Average +/- 1 SD
Forecast Growth 12m 24m
Communication Services 4.5% 8.7%
Consumer Discretionary 10.6% 9.8%
Consumer Staples 14.4% 18.2%
Energy 21.4% -2.6%
Financials 10.1% 9.9%
Health Care 51.7% 42.7%
Industrials 26.4% 13.1%
Information Technology 25.7% 33.6%
Materials 44.2% 17.6%
Real Estate -0.8% 3.2%
Utilities -19.0% -4.8%
Small Ordinaries 19.2% 12.2%
4 | Research Monitor | Jun 2019
CHART 1: Earnings per Share Growth Y1 fwd to Y2 fwd CHART 2: Small Caps growing faster
30% 20%
25%
15%
20%
15% 10%
10% 5%
5%
0%
0%
Apr 11
Apr 12
Apr 13
Apr 17
Apr 10
Apr 14
Apr 15
Apr 16
Apr 18
Apr 05
Apr 07
Apr 06
Apr 08
Apr 09
-5%
Oct 11
Oct 12
Oct 13
Oct 17
Oct 10
Oct 14
Oct 15
Oct 16
Oct 18
Oct 07
Oct 06
Oct 08
Oct 09
S&P ASX Small Ordinaries S&P ASX 100
CHART 3: PE versus Growth Differential CHART 4: PE premium/discount drives performance
30% 15% -20%
10% -15%
20% 5% -10%
0%
10% -5%
-5%
0%
-10%
0% 5%
-15%
-20% 10%
-10% 15%
-25%
-30% 20%
-20%
Nov 05 Nov 08 Nov 11 Nov 14 Nov 17
Oct 06 Oct 08 Oct 10 Oct 12 Oct 14 Oct 16 Oct 18
12m return differential
Growth Differential Premium/Discount Difference b/n PE premium and Growth Premium (RHS, inverted)
Source: FactSet and Shaw and Partners
Is there sufficient earnings growth in Small
Companies relative to Large Companies to justify
this premium?
The key here is to look two years’ This ties in with our thesis that just We polled our small cap team
ahead as the PE ratio (CHART 1) buying the market is unlikely to result and selected ten companies that
is calculated using one year ahead in a fantastic outcome for investors
earnings. So, what does the growth and thus they must do their homework
we believe have superior growth
differential between small caps and and cleverly select the right stocks and prospects that may not be being
large caps look like today, and does sectors that are expected to do well. correctly priced by the market.
it justify the premium? They are:
So which sectors look like they will
If we overlay the PE premium with the be delivering the highest level of
Audinate (AD8)
growth differential (CHART 3), we can growth over the next few years?
see that the market continues to see a Looking at the individual stocks that Apiam Animal Health (AHX)
growth premium of Small Companies comprise the Small Ordinaries Index Bingo Industries (BIN)
over Large Companies beyond the next and collating the sector data, it’s no Carbonxt Group (CG1)
few years. surprise that Healthcare and Information IVE Group (IGL)
Technology stocks have the highest
Whilst by no means a perfect correlation, forecast growth.
Money 3 (MNY)
small caps typically underperform large Midway (MWY)
caps (and vice versa) when this PE Rhipe (RHP)
versus Growth differential gets too large.
Revasum (RVS) and
Zip Co (Z1P).
Research Monitor | Jun 2019 | 5
Jonathon Higgins
Danny Younis
Research Analysts
ASX Tech Sector
returns like Moore’s Law
oore’s law is the observation that the number of
M
transistors in a dense integrated circuit doubles about
every two years. Moore’s Law can also be utilised to
represent exponential growth.
6 | Research Monitor | Jun 2019
TECH STOCK
The tech and high growth sector has led the rebound in the PERFORMANCE SINCE
US and Australia with the average $100m+ market cap tech THE START OF THE
YEAR TO MARCH 2019
stock up ~19% since December to March and outperforming
the broader index by ~9%. DUB 135.8%
NEA 92.0%
APX 81.4%
ISX 67.7%
Tech both domestically and Overall quality (measured by profitability) APT 62.6%
internationally has been a bellwether of tech names has actually increased AD8 62.0%
for overall market sentiment. across the bourse as businesses have ALU 53.4%
Whilst the tech/growth sector in matured, management drive towards Z1P 52.3%
Australia pales in comparison with profitability and higher quality later stage BVS 47.3%
the size of the market in the USA, tech have been listed on the Australian PME 47.1%
a number of quality companies stock exchange. IFM 46.6%
RHP 44.6%
have emerged on the ASX as new
Interestingly on the ASX and the Australian ESV 43.8%
listings (Afterpay, Wisetech) as well NTC 41.4%
as established players continued to market, management are incentivised
IRI 35.4%
grow domestically and internationally and given a mandate to drive towards
DDR 33.0%
(Appen, Altium, Promedicus, Xero to profitability, rather than users, active KPI AMS 30.4%
name a few). metrics and a loss making high market ASG 29.7%
share, as is encouraged within the USA. LVT 29.7%
The combined market cap of larger The current percentage of stocks with WTC 27.3%
ASX tech names now totals over $83bn a market cap of over $100m making TNE 26.1%
up over 170% in the past 5 years. The positive EBITDA is 71% against 35% 5 HUB 21.9%
average market cap has also risen years ago, representing a step up in ASX SDA 20.3%
GBT 18.3%
over 50% and now sits at over $1.3bn listed tech quality available to investors.
CL1 16.2%
supported by a skew towards larger EML 16.1%
names. MP1 14.8%
CAR 13.6%
XRO 13.1%
LNK 12.3%
DTL 12.3%
Total market cap and average capitalisation (tech sector) IRE 11.4%
RBL 11.1%
LVH 10.3%
$90bn $1.4bn
MNY 10.3%
$80bn
ELO 8.6%
$1.2bn REA 7.9%
$70bn SEK 7.2%
$1.0bn OCL 6.5%
$60bn CGL 6.5%
CDA 6.5%
$0.8bn
$50bn PPH-NZE 5.7%
CAT 3.2%
$40bn $0.6bn ARQ 1.3%
WLL 1.0%
$30bn
$0.4bn CPU 0.9%
$20bn CXL 0.6%
NXT -0.8%
$0.2bn DWS -2.5%
$10bn
FDV -6.0%
$0bn $0.0bn PVS -6.3%
GTK -6.7%
Mar 14
Mar 15
Mar 16
Mar 17
Mar 19
Dec 17
Mar 18
Dec 14
Dec 15
Dec 16
Dec 18
Jun 14
Jun 15
Jun 16
Jun 17
Jun 18
Sep 17
Sep 14
Sep 15
Sep 16
Sep 18
ISU -7.9%
FLN -8.8%
GTK-NZE -8.9%
Total market cap (LHS) Average market cap (RHS)
RUL -9.7%
Source: FactSet and Shaw and Partners
3PL -10.0%
PPS -10.9%
HSN -12.0%
SLC -12.3%
As more accommodative monetary conditions SMN
TTT
-14.8%
-16.9%
have reigned supreme, the market has turned QMS
OVH
-17.1%
-19.3%
risk on towards growth shares.
Research Monitor | Jun 2019 | 7
ASX Tech Sector
returns like Moore’s Law
Quality is continuing to emerge across the ASX,
with domestic tech names more profitable,
bigger and increasingly more global than before.
EV/Sales multiples all tech and growth
The sector has re-rated and 5.50
is currently sitting 15% above
its 5 year average EV/sales
multiple; even as the skew 5.00
of size and investor appetite
within the sector has 4.50
increased towards the larger
and more liquid names,
which are trading at even 4.00
more substantial premiums
to the broader sector (of
up to 2x the broader sector 3.50
multiple).
The tech sector YTD has re-rated 3.00
by over 20% to start the year an
EV/sales basis. This is even more
pronounced within the basket of popular
larger tech growth stocks. Without 2.50
Mar-14
Mar-15
Mar-16
Mar-18
Mar-19
Mar-17
Nov-14
Nov-15
Nov-16
Nov-18
Nov-17
Jul-14
Jul-15
Jul-16
Jul-18
Jul-17
earnings continuing to outperform,
this re-rating typically leads a period of
underperformance and sharp correction
within the growth sector.
Median EV/Sales (t+1) 5 year average
Source: FactSet and Shaw and Partners
8 | Research Monitor | Jun 2019
ASX Tech Sector
returns like Moore’s Law
Approximately 50% of the outperformance
within the Small Ords sector has been within
the five most popular tech stocks on the ASX.
Rolling QoQ re-rating for sector
90% Whilst the majority of investors have Within the popular larger tech names,
started the year with a positive those names that screen the cheapest
70%
experience, underperformance is with respect to trading multiples and rate
50% rife across the market, lending our of growth across gross profit (some are
institutional colleagues with the unprofitable or just reaching profitability)
30%
headache of good performance against are Z1P, Afterpay Touch Group (APT)
10% index underperformance to start CY19. (large multiple with over 100% forecast
-10% growth), Catapult Group International
This is as a result of a collective basket
(CAT) and Appen (APX).
-30% of small cap tech/growth names that
have outperformed substantially (~50%) The popular tech names that screen
-50%
YTD. These stocks include such as expensive include, Nearmap
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
names as Afterpay Touch Group (APT), (NEA), Pro Medicus Limited (PME),
WiseTech Global (WTC), Nearmap (NEA), WiseTech Global (WTC), Xero (XRO),
Appen (APX), Altium (ALU), Technology REA Group (REA), Carsales.Com
Sales trading multiples tech One (TNE) and Pro Medicus (PME). (CAR) and Technology One (TNE).
& growth Reporting season in general wasn’t
35 90% a standout for these names, but an
80% underweight position was at your own
30
70% peril.
25
60%
20 50% Shaw and Partners has picked three
15 40% of the top 12 performers within the
10
30% tech index in Zip Co (Z1P), Rhipe
20% (RHP) and Audinate (AD8), which
5 10% have added on average ~100% in
0 0% the past 12 months to March and
PME
ALU
APX
APT
NEA
TNE
WTC
Z1P
outperformed the broader market
EV/Sales (t+1) (LHS) substantially.
EV/Sales expansion (RHS)
Average multiple expansion (RHS)
Research Monitor | Jun 2019 | 9Steve Anagnos &
Cameron Duncan
Co-Heads, Income Strategies
Can a partially
Inverted Yield Curve be
a signal of recession?
10 | Research Monitor | Jun 20193.5
3.3
3.1
2.9
2.7
2.5
2.3
2.1
1.9
1.7
1.5
Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19
US 10 Year Treasury Bond 3 Month Treasury Bond
The recent inversion of the three Month Treasury Bill to the US 10 year
Treasury Bond was viewed by some analysts as a harbinger for increased
impending market volatility and a potential looming recession in the US
and some other developed economies including Australia.
US Treasury Curve Coupled with the Fed’s GDP The better news is that similar to the
revisions and more dovish US curve, over the past week or so
2.6 commentary in relation to the Fed longer bond yields have moved relatively
Funds rate and quantitative activity, wider again which has created a more
2.4
the outlook infers a period of at least “normal” shape curve.
2.2 slowing growth.
This shift is important beyond just the
The US Treasury yield curve is inverse possible inference of an impending
2
out to four years and the Australian recession or slower growth. When the
1.8 bond curve is inverse for three years, gap between short term rates and
which has also prompted some analysts longer term rates narrows, it reduces the
1.6 to suggest that some developed margins that financial institutions receive
economies including Australia are who borrow “short” and lend “long”.
1.4 headed for a recession.
In summary, recent yield curve
2023
2027
2019
2031
2035
2039
2043
2047
We note, however, that viewed across all shifts have increased our wariness
tenors, clearly the greater yield curve is of market volatility and increased
still essentially “normal” and a sustained our defensive positioning. We have
Australian Bill & Bond Curve period of inversion would be a more increased our weighting of liquid
clear indicator of there being some dark alternatives and hybrids relative to
3.0
clouds on the horizon. equities. However we do not view
2.9 the current yield curve and the
Furthermore, the inverse shape at the temporary inversion of the three
2.8 shorter end of the curve has been month bill / two year bond spread
2.7 attributed to the impact of a lengthy to 10 year bonds, as a reliable
period of quantitative easing and slack indicator of a looming recession or
2.6 monetary policy. dramatically slower growth.
2.5 A similar Australian yield curve is evident
2.4 across the Australian bill / bond interest
rate curve, which has created concern
2.3 in terms of the implications for the
2023
2027
2019
2031
2035
2039
2043
2047
economic outlook, particularly in the
context of weakening residential house
prices.
Source: FactSet and Shaw and Partners
Research Monitor | Jun 2019 | 11Shaw and Partners is now part of EFG International, a global
private banking group headquartered in Zurich.
www.efginternational.com
STRATEGIC PARTNERSHIP SOLID FOUNDATIONS CLOSE TO CLIENTS
On the 13th of March 2019, Shaw and As one of the best-capitalised Swiss EFG combines a global focus with a
Partners and EFG International entered private banks, EFG International is a strong local presence. The company is
into a long-term strategic partnership financial partner that offers the security present in selected locations around the
with EFG acquiring a 51% stake in the and solidity needed to provide clients globe and with experienced specialists
issued shares in Shaw and Partners. with effective support. An entrepreneurial who know and manage the business
spirit has shaped the bank since it at a local level. Thanks to its proximity
ABOUT EFG INTERNATIONAL was established in 1995, enabling to clients, EFG International can offer
EFG International is a global private it to develop and offer hands-on comprehensive advice that takes
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and asset management services. relationships.
INTERNATIONAL PRESENCE
As a leading Swiss private bank, EFG
International has a presence in major
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EFG International operates in over 40
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spanning Europe, Asia Pacific, the
Americas and the Middle East.
Our combined expertise and capabilities
enable us to provide top-tier services
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Giorgio Pradelli, CEO at EFG
Hamilton
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12 | Research Monitor | Jun 2019EFG International at a glance
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driven by an
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EFG combines a global focus with
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Research Monitor | Jun 2019 | 13Shaw Managed Accounts
Portfolio Performances – March 2019
1 Mth 3 Mth 6 Mth 1yr Inception
Shaw Income Goal Portfolio Total Portfolio Return 1.44% 6.17% 1.72% 8.26% 7.02%
Objective: RBA Cash +3% Portfolio Objective 0.38% 1.10% 2.23% 4.50% 4.48%
Inception: Sep-17 Excess v Objective 1.06% 5.07% -0.51% 3.76% 2.54%
Shaw Balanced Goal Portfolio Total Portfolio Return 0.90% 7.35% 1.39% 8.93% 8.59%
Objective: RBA Cash +4% Portfolio Objective 0.46% 1.33% 2.71% 5.50% 5.51%
Inception: Sep-17 Excess v Objective 0.45% 6.02% -1.31% 3.43% 3.08%
Shaw Growth Goal Portfolio Total Portfolio Return 0.87% 10.05% -1.35% 9.38% 11.69%
Objective: RBA Cash +5% Portfolio Objective 0.54% 1.58% 3.21% 6.50% 6.47%
Inception: Sep-17 Excess v Objective 0.33% 8.47% -4.55% 2.88% 5.22%
Total Portfolio Return 0.98% 2.21% 3.65% 5.49% 4.24%
Debt Securities Income Portfolio
Inception: Sep-17
Total Portfolio Return 1.57% 1.83% 2.60% 7.40% 7.13%
Hybrid Income Portfolio
Inception: Sep-16
Total Portfolio Return 2.31% 11.84% 3.61% 12.52% 8.77%
Australian Equity (Large Cap) - Income
Inception: Sep-17
Total Portfolio Return 1.49% 14.38% 0.08% 13.49% 15.16%
Australian Equity (Large Cap) - Growth
Inception: Sep-17
Total Portfolio Return 0.62% 11.86% 4.59% 13.97% 13.00%
Australian Equity (Large Cap) - Core
Inception: Sep-16
Total Portfolio Return -0.45% 8.27% -6.85% 1.62% 6.21%
Australian Equity - Small and Mid Cap
Inception: Sep-17
Total Portfolio Return -0.57% 2.43% -0.90% N/A -1.18%
Shaw Liquid Alternatives Portfolio
Inception: Aug-18
AB Concentrated Global Growth Total Portfolio Return 3.00% 15.73% 2.71% 14.89% 9.89%
Inception: Jan-15
14 | Research Monitor | Jun 2019Shaw Managed Accounts
Click on the images below to download the marketing brochure
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Shaw Managed Accounts Shaw Managed Accounts Shaw Managed Accounts
GOAL BASED PORTFOLIO GOAL BASED PORTFOLIO GOAL BASED PORTFOLIO
Shaw Income Goal Portfolio Shaw Balanced Portfolio Shaw Growth Goal Portfolio
Investment objective Asset classes and strategies may include Investment objective Asset classes and strategies may include Investment objective Asset classes and strategies may include
Model Portfolio Details Model Portfolio Details Model Portfolio Details
The primary objective of the Shaw Income cash, Australian debt securities, and The primary objective of the Shaw cash, Australian debt securities, and The primary objective of the Shaw Growth cash, Australian debt securities, and
Goal Portfolio is to provide a regular Australian equities including property Model Portfolio Manager Balanced Portfolio is to provide a regular Australian equities including property Model Portfolio Manager Goal Portfolio is to provide regular and Australian equities including property Model Portfolio Manager
and sustainable income stream over the securities, international equities and Shaw and Partners Limited and sustainable income stream and securities, international equities and Shaw and Partners Limited sustainable capital growth over the longer securities, international equities and Shaw and Partners Limited
medium term (3–5 years) whilst minimising alternative strategies (ETF and or capital growth over the medium term alternative strategies (accessed via ASX term (5–7 years). It achieves this by alternative strategies (ETF and or
risk to capital. It achieves this by investing managed funds). Benchmark Index (4–6 years), together with some capital listed ETFs and or managed funds). Benchmark Index investing in a diversified portfolio of asset managed funds). Benchmark Index
RBA Cash rate +3% RBA Cash rate +4% RBA Cash rate +5%
in a diversified portfolio of asset classes growth whilst minimising risk to capital. It classes and strategies. The strategy is
Continual assessment and risk (Gross Income and Total Return) Continual assessment and risk (Gross Income and Total Return) Continual assessment and risk
and strategies. achieves this by investing in a diversified designed to have a high level of risk. It
management of bottom-up and top- Indicative Number of Securities, Stocks management of bottom-up and topdown Indicative Number of Securities, Stocks management of bottom-up and top- Indicative Number of Stocks per
portfolio of asset classes and strategies. achieves this by investing in a diversified Asset Class Based Portfolio
The strategy is designed to have a down parameters is a core component and/or Funds (ETF and Managed) parameters is a core component of the and/or Funds (ETF and Managed) down parameters is a core component
portfolio of asset classes and strategies. 30–100
medium level of risk. of the model. Changes to the portfolio 40–100 The strategy is designed to have a model. Changes to the portfolio will be 60–140 of the model. Changes to the portfolio
will be made as deemed appropriate Minimum Suggested moderate level of risk. made as deemed appropriate by the Minimum Suggested The strategy is designed to have a high will be made as deemed appropriate Minimum Suggested
Investment Time Frame Investment Time Frame Investment Time Frame
Investment Strategy and Approach by the investment team in order for investment team in order for the portfolio level of risk. by the investment team in order for
3 years 4 years 5 years
The investment process combines the portfolio to have a high probability Investment Strategy and Approach to have a high probability of meeting the portfolio to have a high probability
Asset Allocation Ranges Asset Allocation Ranges Asset Allocation Ranges
quantitative and qualitative criteria and of meeting its objectives in all market Investment Strategy and Approach The its objectives in all market conditions. Investment Strategy and Approach of meeting its objectives in all market
Shaw Debt Securities Income 0%–30% Shaw Debt Securities Income 0%–50% Shaw Australian Equity Growth
analysis to identify asset classes, markets, conditions. The investment process takes investment process combines quantitative The investment process takes into The investment process combines conditions. The investment process takes (Large Cap) 0%–80%
Shaw Hybrid Income 0%–35% Shaw Hybrid Income 0%–50%
securities and strategies which have into consideration the risk around asset and qualitative criteria and analysis to consideration the risk around asset quantitative and qualitative criteria and into consideration the risk around asset Shaw Australian Equity Growth
Shaw Australian Equity Income Shaw Australian Equity Core
a focus toward producing sustainable classes and the underlying securities, (Large Cap) 0%–60% identify asset classes, markets, securities classes and the underlying securities (Large Cap) 0%–60% analysis to identify asset classes, markets, classes and the underlying securities (Small and Mid-Cap) 0%–40%
income as opposed to capital growth. maintaining their income characteristics International Equity 0%–40% and strategies which have a focus toward maintaining their income and growth Shaw Australian Equity Growth securities and strategies which have a maintaining their growth characteristics International Equity 0%–40%
whilst ensuring that the risk of a Liquid Alternatives 0%–40% characteristics whilst ensuring that the risk (Small and Mid-Cap) 0%–30% whilst ensuring that the risk of a Liquid Alternatives 0%–40%
producing sustainable income and capital focus toward producing capital growth Cash 0%–100%
The portfolio construction is based on drawdown is adequately managed. The Cash 0%–100% of a drawdown is adequately managed. International Equity 0%–40% drawdown is adequately managed. The
growth. over and above income.
macro-economic and thematic views of Portfolio Managers however manage the Indicative Cash Holding The Portfolio Managers however manage Liquid Alternatives 0%–40% Portfolio Managers however manage the Indicative Cash Holding
Cash 0%–100% 3%
Shaw Managed Accounts Shaw’s Research in order to best meet capital value of the portfolio to minimise 3% The portfolio construction is based on the capital value of the portfolio to The portfolio construction is based on capital value of the portfolio to minimise
the risk and return objectives of the the risk of the portfolio failing to achieve macro-economic and thematic views of minimise the risk of the portfolio failing to Indicative Cash Holding macro-economic and thematic views of the risk of the portfolio failing to achieve
Minimum Model Investment 3% Minimum Model Investment
investment strategy. its risk and return objectives. Shaw’s Research in order to best meet achieve its risk and return objectives. Shaw’s Research in order to best meet its risk and return objectives.
$100,000 $100,000
the risk and return objectives of the the risk and return objectives of the
Minimum Model Investment
Managing your portfolio just got easier The portfolio is a blend of the Shaw and
Designed for investors who Management Fee
investment strategy. Designed for investors who $100,000 investment strategy. Designed for investors who Management Fee
Partners SMA strategic portfolios based Investment Fee Nil
Seek income as the primary objective Investment Fee Nil Seek a balance of income and capital Seek capital growth as the primary
on their suitability to the income objective. The portfolio is a blend of the Shaw The portfolio is a blend of the Shaw and Indirect Cost Ratio 0.36% p.a.
and some capital appreciation from a Indirect Cost Ratio 0.34% p.a. growth as the primary objective from Management Fee objective and some income from a
Each goals based portfolio has effectively Performance Fee Nil and Partners SMA strategic portfolios Investment Fee Nil Partners SMA strategic portfolios based Performance Fee Nil
broad range of Australian and Global a broad range of Australian and global broad range of Australian and global
its own asset and risk allocation managed based on their suitability to the Balanced asset classes and strategies Indirect Cost Ratio 0.37% p.a. on their suitability to the growth objective.
asset classes and strategies asset classes and strategies
by the Shaw Portfolio Strategies Team. portfolio objective. Each goals based Performance Fee Nil Each goals based portfolio has effectively
Have an investment horizon of three Have an investment horizon of four Have an investment horizon of five
portfolio has effectively its own asset and its own asset and risk allocation managed
years or more years or more years or more
risk allocation managed by the Shaw by the Shaw Portfolio Strategies Team.
Accept the risk of volatility in their Portfolio Strategies Team. Accept a moderate risk of volatility in Accept the risk of volatility in their
investment return. their investment return. investment return.
MODEL PORTFOLIO CODE MODEL PORTFOLIO CODE MODEL PORTFOLIO CODE
SP0009 SP0008 SP0010
SMA Marketing brochure Shaw Income Goal Shaw Balanced Goal Shaw Growth Goal
Shaw Managed Accounts Shaw Managed Accounts Shaw Managed Accounts Shaw Managed Accounts
ASSET CLASS PORTFOLIO ASSET CLASS PORTFOLIO ASSET CLASS PORTFOLIO ASSET CLASS PORTFOLIO
Shaw Debt Securities Income Portfolio Shaw Hybrid Income Portfolio Shaw Australian Equity (Large Cap) Income Shaw Australian Equity (Large Cap) Core
Investment objective The portfolio will be diversified across the Investment objective The portfolio will be diversified across Investment objective Continual assessment and risk Investment objective The Investment Process takes into
Model Portfolio Details Model Portfolio Details Model Portfolio Details Model Portfolio Details
The model invests in a portfolio of ASX above criteria. A key focus of the portfolio The model aims to invest in a portfolio of the above criteria. The portfolio will The primary objective of the Shaw management of bottom-up and top- The objective of the Shaw Australian consideration the yield and capital growth
listed debt and shorter dated hybrid will be the mix of fixed and floating rate Model Portfolio Manager ASX listed debt and preference securities be monitored against the manager’s Model Portfolio Manager Australian Equity Income (Large Cap) down parameters is a core component Model Portfolio Manager Equity (Large Cap) Core Portfolio is objectives of the portfolio and ensures Model Portfolio Manager
securities, debt based ETFs and debt exposure in order to meet the portfolios’ Shaw and Partners Limited that offer diversification benefits to both expectations of equity returns, credit Shaw and Partners Limited Portfolio is to provide a regular and of the model. Changes to the portfolio Shaw and Partners Limited to provide regular income, capital that both are managed simultaneously Shaw and Partners Limited
specialist managed funds. These objectives. The portfolio will be monitored Australian equities and cash or term market implied volatilities and underlying sustainable fully franked dividend income will be made as deemed appropriate appreciation and out performance of the to ensure that the portfolio is not overly
products offer potential diversification against the manager’s expectations of Benchmark Index deposits. interest rates in order to ensure it is Benchmark Index stream over the medium term (3–5 years). by the investment team in order for the Benchmark Index S&P/ASX 100 Accumulation Index over skewed to any style or thematic that Benchmark Index
RBA Cash rate +1.5% RBA Cash rate +3% S&P/ASX 100 Accumulation Index S&P/ASX 100 Accumulation Index
benefits to both Australian equities and equity returns, credit market implied invested across a range of market It achieves this by investing in a portfolio portfolio to have a high probability of the medium term (3–5 years) through would increase the risk of the portfolio
The model’s return will be generated from (inclusive of franking credits)
cash or term deposits. volatilities and underlying interest rates cycles to meet its return objective, while of large-cap Australian listed companies meeting its objectives. The investment investment in large cap shares listed in failing to meet its objectives.
Indicative Number of Securities, Stocks a combination of cash (interest payments Indicative Number of Stocks Indicative Number of Stocks Indicative Number of Stocks
in order to ensure it is invested across and/or Funds (ETF and Managed) adhering to the risk tolerances set. and managed funds. Although the process takes into consideration the risk 15–25 Australia. 15–25
The model’s return will be generated from and dividends), franking credits and 10–30
a range of market cycles to meet its 15–25 focus is yield generation, the investment around companies growing/maintaining Designed for investors who
a combination of interest payments and return objective, while adhering to the risk capital growth (realised and unrealised) The model manager has access to new process and risk management aims to their dividend characteristics with the
Minimum Suggested Minimum Suggested Minimum Suggested Investment Strategy and Approach Seek exposure to an Australian share Minimum Suggested
capital growth (realised and unrealised) tolerances set. from an actively managed portfolio issues of debt and preference securities ensure that risk to capital is minimised result that this portfolio aims for a higher Investment Time Frame Investment Time Frame
Investment Time Frame Investment Time Frame Shaw and Partners’ Investment Process portfolio that provides a franked income
from an actively managed portfolio 3 years
strategy. and is able to include in the portfolio as it 3 years with the goal of some capital appreciation dividend yield than that of the broader 3 years 3 years
strategy. The model manager has access to new deems appropriate. combines quantitative and qualitative stream and capital appreciation
Asset Allocation Ranges Asset Allocation Ranges via both longer term price appreciation market. The portfolio managers however Asset Allocation Ranges criteria and analysis to identify stocks Asset Allocation Ranges
issues of listed debt securities and is The Shaw Hybrid Income Portfolio seeks Have an investment horizon of three
Debt and hybrid securities 70%–100% Listed Australian hybrid securities 70%–100% and actively locking in gains as deemed manage the capital value of the portfolio Australian Equities 80%–100%
likely to produce above average
Australian Equities 90%–100%
The Shaw Debt Income Portfolio seeks to able to include these in the portfolio as it to provide investors with a predictable The model manager’s institutional Cash 0%–20% years or more Cash 0%–10%
Cash 0%–100% Listed debt securities 0%–80% appropriate to the objectives. to minimise the risk of the portfolio failing earnings growth with positive valuation
provide investors with a predictable level deems appropriate. level of income whilst minimising risk to market experience with this asset class Accept the risk of share price volatility.
Indicative Cash Holding Cash 0%–20% to achieve its risk and return objectives. Indicative Cash Holding characteristics. Indicative Cash Holding
of income whilst minimising risk to capital. capital. brings specialist knowledge to pricing
2% Indicative Cash Holding 2% 2%
and liquidity. Active management of the Investment Strategy and Approach
Designed for investors who 2%
The investment process combines Designed for investors who The portfolio construction is based on
Investment Strategy and Approach Investment Strategy and Approach portfolio will take advantage of relative Minimum Model Investment Minimum Model Investment
Seek a sustainable income stream over Minimum Model Investment macro-economic and thematic views of
mispricing between securities and the quantitative and qualitative criteria and Seek franked dividend income as the $5,000 $5,000
The model manager aims to achieve the a 3 year + time frame, with a lower risk $5,000 The model manager aims to achieve the Minimum Model Investment Shaw and Partners’ Research in order to
asset class as a whole, while taking into $5,000 analysis to identify stocks and strategies primary objective from an Australian
investment objectives via a qualitative of loss than equities, and a higher rate investment objectives via a qualitative best meet the risk and return objectives
Management Fee consideration the impact of any micro which have a relatively high dividend equities portfolio and some capital Management Fee Management Fee
and quantitative investment process. Key of return than cash like investments and quantitative investment process. Key of the investment strategy. Continual
Investment Fee Nil and macroeconomic factors. The ability Management Fee paying capability, and are likely to appreciation Investment Fee Nil Investment Fee Nil
criteria and areas of focus are: criteria and areas of focus are: Indirect Cost Ratio 0.25% p.a. assessment and risk management of Indirect Cost Ratio 0.00% p.a.
Focus on minimising risk to capital and Indirect Cost Ratio 0.28% p.a. to lock in gains will be a key feature of the Investment Fee Nil produce above average earnings growth Have an investment horizon of three
Credit quality of the issuer low volatility of returns. Performance Fee Nil Credit quality of the issuer Indirect Cost Ratio 0.00% p.a. with positive valuation characteristics. Performance Fee Nil bottom-up and top-down parameters is a Performance Fee Nil
strategy in achieving its objectives. years or more
Sector/Industry Sector/Industry Performance Fee Nil core component of the Model. Changes
The portfolio construction is based on Accept the risk of share price volatility. to the portfolio will be made as deemed
Call dates and final maturity details Call date, conversion dates and final Designed for investors who macro-economic and thematic views of appropriate by the investment team in
Structure of instrument maturity details Seek a sustainable income stream Shaw and Partners’ Research in order to order for the portfolio to have a high
Timing and composition of cash flows Structure of instrument (inclusive of franking credits) over a 3 year best meet the risk and return objectives of probability of meeting its objectives.
Timing and composition of cash flows + time frame, with a lower risk of loss the investment strategy.
Relative valuation of sector as a whole
than equities, and a higher rate of return
and between relevant securities, Relative valuation of sector as a whole
than cash like investments.
including the inclusion of new issues and between relevant securities,
Liquidity and potential changes in including the inclusion of new issues
liquidity. Liquidity and potential changes in
MODEL PORTFOLIO CODE liquidity. MODEL PORTFOLIO CODE MODEL PORTFOLIO CODE MODEL PORTFOLIO CODE
SP0003 SP0002 SP0004 SP0001
Shaw Debt Securities Income Shaw Hybrid Income Shaw Australian Equity Shaw Australian Equity
(Large Cap) Income (Large Cap) Core
Shaw Managed Accounts Shaw Managed Accounts Shaw Managed Accounts Shaw Managed Accounts
ASSET CLASS PORTFOLIO ASSET CLASS PORTFOLIO ASSET CLASS PORTFOLIO ASSET CLASS PORTFOLIO
Shaw Australian Equity (Large Cap) Growth Shaw Australian Equity (Small and Mid-Cap) Growth Shaw Liquid Alternatives Portfolio AllianceBernstein Concentrated Global Growth
Investment objective The investment process takes into Investment objective The investment process takes into Investment objective research into alternative strategies and Investment objective Designed for investors who
Model Portfolio Details Model Portfolio Details Model Portfolio Details Model Portfolio Details
The primary objective of the Shaw consideration the primary objective of The primary objective of the Shaw consideration the primary objective The primary objective of the Shaw Liquid return streams is a core component The portfolio seeks long term growth Are considered longer term investors (5
Australian Equity (Large Cap) Growth capital growth. Although the portfolio will Model Portfolio Manager Australian Equity (Small and Mid-Cap) of capital growth. It aims to invest in Model Portfolio Manager Alternatives Portfolio is to provide regular of the model. Changes to the portfolio Model Portfolio Manager of capital by investing in an actively years +) Model Portfolio Manager
Portfolio is to provide a level of capital generate income, income focused stocks Shaw and Partners Limited Growth Portfolio is to provide a level of companies where the share price does Shaw and Partners Limited and sustainable income and capital will be made as deemed appropriate Shaw and Partners Limited managed concentrated portfolio of listed Seek exposure to a concentrated AllianceBernstein
appreciation over the longer term will be included if their total return criteria capital appreciation over the longer term not fully reflect the potential value of the growth over the medium term (3–5 years) by the investment team in order for securities considered by the portfolio portfolio of high quality global equities
(5–7 years). The portfolio is tilted towards fits the portfolios objective. Benchmark Index (5–7 years). The portfolio is tilted towards underlying business of the company. Benchmark Index whilst minimising risk to capital. It the portfolio to have a high probability Benchmark Index manager to be of very high quality issued Benchmark Index
S&P/ASX 100 Accumulation Index S&P/ASX Small Ordinaries Accumulation Index RBA Cash rate +3%
with superior return potential with MSCI World Index
stocks that have superior earning growth small and mid-sized stocks that have achieves this by investing in a diversified of meeting its objectives in all market by companies with predictable growth. generally low turnover
capacity and focus is on the total return Volatility of returns will be managed with superior earning growth capacity and portfolio of asset classes and strategies conditions. The investment process takes
Indicative Number of Securities, Stocks Designed for investors who Indicative Number of Securities, Stocks Indicative Number of Stocks per
of each stock rather than the dividend the objective of a lower standard deviation focus is on the total return of each stock Indicative Number of Securities, Stocks that have low correlation with traditional into consideration the risk around asset
and/or Funds (ETF and Managed) Seek long term capital growth as the and/or Funds (ETF and Managed) and/or Funds (ETF and Managed) Investment Strategy and Approach Asset Class Based Portfolio
income as the prime objective. of returns than the benchmark index. rather than the dividend income as the equity and debt asset classes. This classes and the underlying securities
15–25 primary objective from and Australian 15–30 3–20 The portfolio manager seeks to achieve 25–35
prime objective. equities portfolio and some income portfolio is designed to act as a volatility maintaining their growth characteristics the investment objective by composing a
Minimum Suggested Minimum Suggested Minimum Suggested Minimum Suggested
Investment Strategy and Approach Designed for investors who Investment Time Frame dampener and diversifier to an existing whilst ensuring that the risk of a Investment Time Frame portfolio of highly liquid, listed securities of Investment Time Frame
Those investors in the accumulation Investment Time Frame
The investment process combines Seek long term capital growth as the 5 years Investment Strategy and Approach 5 years
portfolio of liquid assets. drawdown is adequately managed. The 3 years quality companies from the MSCI World 5 years
phase portfolio managers however manage the
quantitative and qualitative criteria and primary objective from an Australian Asset Allocation Ranges The investment process combines Asset Allocation Ranges universe. These companies are chosen Asset Allocation Ranges
Have an investment horizon of five Asset Allocation Ranges
analysis to identify stocks which have a equities portfolio and some income Australian Equities 80%–100% quantitative and qualitative criteria and Investment Strategy and Approach capital value of the portfolio to minimise Liquid alternative assets 80%–100% for their specific growth and business International Equities 90%–100%
Australian Equities 80%–100%
Cash 0%–20% years or more the risk of the portfolio failing to achieve Cash 0%–20% Cash 0%–10%
favourable outlook are likely to produce Those investors in the accumulation analysis to identify stocks which have a Cash 0%–20% The portfolio is a blend of strategies and characteristics, earnings development,
above average earnings growth with phase Indicative Cash Holding relatively high dividend paying capability Accept the risk of share price volatility. investments that can be expected to have its risk and return objectives. Indicative Cash Holding financial position and experienced Indicative Cash Holding
Indicative Cash Holding
positive valuation characteristics. 2% are likely to produce above average 2% a lower correlation to equities, bonds and 2% management. 2%
Have an investment horizon of five
years or more earnings growth with positive valuation other traditional beta style investments. Designed for investors who
The portfolio construction is based on Minimum Model Investment Minimum Model Investment Minimum Model Investment Minimum Model Investment
characteristics. The portfolio was designed primarily Investors seeking sustainable and lower
macro-economic and thematic views of Accept the risk of share price volatility. $5,000 $5,000 $5,000 $65,000
to lower the downside variance of an volatility returns (mix of income and
Shaw and Partners’ Research in order to The portfolio construction is based on income, balanced or growth portfolio that capital growth) as the primary objective
Management Fee Management Fee Management Fee Management Fee
best meet the risk and return objectives of macro-economic and thematic views of uses a mixture of bonds and equities that will be less impacted by large
Investment Fee Nil Investment Fee Nil Investment Fee Nil Investment Fee 0.55% p.a.
the investment strategy. Indirect Cost Ratio 0.00% p.a. Shaw and Partners’ Research in order to to derive a given long term return. The moves in underlying asset prices in Indirect Cost Ratio 0.95% p.a. Indirect Cost Ratio 0.00% p.a.
Indirect Cost Ratio 0.61% p.a.
Performance Fee Nil best meet the risk and return objectives of strategies and managers chosen for traditional investments such as Equities Performance Fee Nil Performance Fee Nil
Continual assessment and risk Performance Fee Nil
the investment strategy. the portfolio have a demonstrable track and Bonds
management of bottom-up and top-down
record of minimising risk to capital during As a standalone investment option,
parameters is a core component of the Continual assessment and risk
downturns and when blended in the suitable for investors looking for a lower
model. Changes to the portfolio will be management of bottom-up and top-down
appropriate weights can significantly risk/lower return exposure that is not
made as deemed appropriate by the parameters is a core component of the
reduce the downside potential of a bond correlated with traditional asset class
investment team in order for the portfolio model. Changes to the portfolio will be
and equity portfolio. returns
to have a high probability of meeting its made as deemed appropriate by the
objectives. investment team in order for the portfolio Asset classes and strategies may Blended with a traditional income,
to have a high probability of meeting its include Global Macro, Managed Futures balanced or growth portfolio to reduce
objectives. (Trends), Long/Short and Market Neutral, drawdown and smooth returns
MODEL PORTFOLIO CODE MODEL PORTFOLIO CODE Commodities and Dynamic Markets. Investors should have an investment MODEL PORTFOLIO CODE MODEL PORTFOLIO CODE
horizon of three years or more
SP0005 SP0006 Only managers/investments that
have daily pricing and liquidity can be
Accept the risk of volatility in their
investment return.
SP0011 SP0012
considered. Continual assessment and
Shaw Australian Equity Shaw Australian Equity Shaw Liquid Alternatives AllianceBernstein Concentrated
(Large Cap) Growth (Small and Mid-Cap) Growth Global Growth
Research Monitor | Jun 2019 | 15Australian Large Cap Model
Portfolio
Australian Large Cap shares of March. It is estimated that income offsetting this detraction was the 9.2%
posted modest gains in March, added 0.73% to our portfolio returns overweight to the REIT sector – which
consolidating two very strong for the period, or 1.01% including rose 5.7%.
previous months to set up the best imputation credits.
quarterly return since the GFC. From a stock selection perspective, the
Overly pessimistic investors at the CHANGES Materials sector was a standout, adding
end of 2018 were left chasing shares 64 basis points to returns thanks to
Changes to the portfolio this month
at the end of the quarter. We remain Fortescue Metals (FMG) up 26.2%, Rio
see us increase our overweight to iron
cautious of earnings outside the Tinto (RIO) up 8.5% and OzMinerals
ore stocks by adding 2% to our RIO
Energy and Materials sector and (OZL) up 7.0% the three greatest
position. We switch from Northern Star
seek the barbell of banks (value) and contributors to portfolio performance.
(NST) to Evolution (EVN) in the gold
miners (growth). space and reduce our Commonwealth
Bank (CBA) position whilst still
MARKET PERFORMANCE maintaining a large overweight to the
Our Australian Large Cap Model Portfolio bank sector. We trade some Dexus
rose 1.38% from the start of March to (DXS) for Mirvac (MGR) in the REITs
the 2nd of April against an S&P/ASX sector.
100 index return of 1.79%. Over the
medium to longer term, the portfolio has Additions Reductions
consistently outperformed the index. EVN 2.75 CBA (2.00)
Being overweight in the Energy and
MGR 1.00 DXS (1.00)
Banks sectors detracted from returns,
however our overweight in the iron ore RIO 2.00 NST (2.75)
stocks within the Materials sectors made 5.75 (5.75)
a positive contribution to the portfolio.
RECOMMENDATION
SECTOR HIGHLIGHTS We remain cautious in our outlook for
The Real Estate Investment Trust Australian shares given the downward
(REIT) sector was another stand-out, pressure on operating margins from
responding to a fall in Australian 10-year rising cost pressures, faltering demand,
bond yields to a record low of 1.7%. intensive competition and the continued
Anything that looks like a bond (high slowdown in the domestic real estate
yield, low risk of capital loss) rallied market. We maintain a relatively
strongly during the month, with notable defensive stance despite overweights
examples being Stockland (SGP) and to Energy and Materials as we think of
Mirvac (MGR) amongst the REITs iron ore and oil prices being well bid
and Transurban (TCL) amongst the due to supply constraints. We remain
infrastructure stocks. underweight Australian shares in a
balanced portfolio setting.
Despite a rally in oil prices toward the
end of the month, the largest detractors PORTFOLIO ATTRIBUTION
from performance were Energy stocks.
Sector allocation detracted 0.68% from
Woodside Petroleum (WPL) and Oil
index returns over the period 1st March
Search (OSH) went backwards during
to 2nd April, due primarily to the 11%
the month.
overweight to the Banking sector, which
March was a big month for dividend fell 2.6% against an index which rose
and distribution payments, with no 1.8%. Similarly, the 7% overweight to
fewer than 39 of the top 100 stocks the Energy sector – which fell 3.5% -
trading ex-dividend since the beginning also detracted from returns. Somewhat
16 | Research Monitor | Jun 2019Portfolio Performance (Accumulation Basis)
2.10
2.00
1.90
1.80
1.70
1.60
1.50
1.40
1.30
1.20
1.10
1.00
Feb 13
Feb 15
Feb 17
Feb 14
Feb 16
Feb 18
Feb 19
Aug 12
Aug 13
Aug 15
Aug 17
Aug 14
Aug 16
Aug 18
Portfolio Index
Model Portfolio at March 2019
WBC Westpac Banking 9.1% OSH Oil Search Limited 4.0%
RIO Rio Tinto Limited 9.0% OZL OZ Minerals Limited 3.4%
NAB National Australia Bank 8.6% MQG Macquarie Group Limited 3.3%
BHP BHP Group Ltd 7.1% SCG Scentre Group 2.9%
CBA Commonwealth Bank 6.5% COL Coles Group Ltd. 2.9%
WPL Woodside Petroleum Ltd 6.4% EVN Evolution Mining Limited 2.7%
ANZ ANZ 5.6% FLT Flight Centre Travel Group 2.6%
SUN Suncorp Group Limited 5.2% SGP Stockland 2.2%
MGR Mirvac Group 5.1% CTX Caltex Australia Limited 1.9%
LLC Lendlease Group 4.6% VCX Vicinity Centres 1.8%
FMG Fortescue Metals Group 4.1% DXS Dexus 1.1%
Research Monitor | Jun 2019 | 17Our Preferred Stocks
OZ Minerals (OZL) is an Australian
based mining company with a Woodside Petroleum (WPL)
National Australia Bank engages
focus on copper. The company is an Australian based oil and
in the provision of banking and
owns and operates the Prominent gas exploration and production
financial services.
Hill copper-gold mine and the company. Key assets are the Pluto,
Carrapateena copper-gold project North West Shelf and Wheatstone
located in South Australia and has LNG projects offshore WA. Oil is
a number of equity interests in listed produced from the Enfield and
Suncorp Group is a financial resource companies. The company Vincent FPSO’s. Exploration is
services company, which provides was founded in 1988 and is underway internationally offshore
banking and wealth, as well as headquartered in Parkside, Australia. West Africa, Myanmar, and onshore
insurance products and services Canada. The company was founded
across Australia and New Zealand. in 1954 and is headquartered in
The company operates its business Perth, Australia.
through the following segments:
General Insurance, Banking and
Life. Suncorp Group was founded Caltex Australia (CTX) is a
in 1996 and is headquartered in transport fuel supplier, convenience
Brisbane, Australia. retailer and an integrated oil
refining and marketing company.
The company operates through Centuria Metropolitan REIT engages
the following segments: Supply in the investment in office assets in
& Marketing and Lytton. Caltex metropolitan markets of Australia. It
Australia was founded in 1900 comprises of registered managed
and is headquartered in Sydney, investment schemes such as
Fortescue Metals Group (FMG) Australia. Centuria Metropolitan REIT 1 and
operates as an iron ore production Centuria Metropolitan REIT 2.
and sea-borne trading company. It is The company is headquartered in
engaged in the mining of iron ore Sydney, Australia.
from its Cloudbreak and Christmas
Creek mine sites; and the operation
of an integrated mine, rail and port
supply chain. The company’s
projects include Chichester Hub,
Solomon Hub, Herb Elliott Port and
Rail Expansion.
18 | Research Monitor | Jun 2019Shaw and Partners provides coverage on
100+ ASX listed companies across a range of
sectors, specialising in Australian mid-cap and
emerging companies.
LendLease Group (LLC) designs, Midway Limited (MWY) engages in
Revasum designs, manufactures the production and exploration of
develops, and manages property
and markets a portfolio of market hardwood and softwood woodchips.
and infrastructure assets. The
leading tools for grinding and It operates through the following
Company constructs apartments,
polishing the substrates upon which segments: Midway, Queensland
commercial buildings, government
semiconductor wafers (sized 200mm Commodity Exports (QCE), South
offices, retirement living, and
and below) are built. These wafers West Fibre (SWF) and a 25% stake
educational facilities. LendLease
are the basis of most microchips, in ADDCO.
serves customers worldwide.
sensors, LEDs, RF devices and
power devices are commonly used
in mobile phones, connected IoT
devices, wearables, automotive,
Calix (CXL) is a multi-award- 5G and industrial applications. Zip Co (Z1P) provides point-of-sale
winning Australian technology Revasum’s products are recognised credit and digital payment services.
company that is developing for delivering significant yield, cost The Company offers retail finance
new processes and materials to and output benefits. The company solutions to small, medium, and
solve global challenges. The core was incorporated in Delaware and is enterprise businesses. Zip Co serves
technology is a world-first, patented based in San Luis Obispo, California. retail, education, health, and travel
“kiln” built in Bacchus Marsh, industries in Australia.
Victoria that produces “mineral
honeycomb” - very highly active
minerals. Audinate Group (AD8)
engages in the development
and commercialization of audio Rhipe (RHP) provides software
visual software and hardware. Its licensing, subscription management
products include chips, modules tools and cloud computing
and cards with embedded software; services. Its software vendors
reference designs and software include Microsoft, Citrix, Datacore,
to enable network configuration McAfee, Red Hat, Trend Micro,
and management under the Dante Veeam, Zimbra and VMware. The
brand. The company was founded company was founded in 2003 and
in 2006 and is headquartered in is headquartered in Melbourne,
Ultimo, Australia. Australia.
Research Monitor | Jun 2019 | 19You can also read
