Lazard Australian Equity

Transcription

1 Australian Equity 2Q18 Platform Review Performance Summary as at 3 June 218 (%; unless otherwise noted) Annualised 3 Months 1 Year 3 Years 5 Years 1 Years Since Inception (1 August 22) Select Australian Equity Excess Return (bps) (1 December 21) Australian Equity Excess Return (bps) (1 August 212) Australian Diversified Income N/A N/A Excess Return (bps) N/A +194 Performance is presented gross of fees in AUD. The performance quoted represents past performance. Past performance is not a reliable indicator of future results. Please refer to the Important Information section for more information about each composite. Market Review The Australian equity market (as measured by the ) was up more than 8% in the second quarter of 218. June commenced with an unprecedented meeting between the US President and the leader of North Korea in Singapore, which produced a sense of optimism amongst the global markets. The Energy sector provided strong performance in June, due to a rise in crude oil prices in the second half of the month. Australia s 1Q18 GDP growth came in only slightly above consensus at 1.% and the unemployment rate remained steady from last quarter at 5.6%, which also slightly exceeded expectations. For 23 consecutive months, the RBA has decided to keep rates on hold at 1.5% for June, showing no urgency to increase rates in the near future. Outlook Looking over the medium-term, we anticipate below average long-run returns for the market from this point, given the reasonably high overall level of valuations and some risks in the domestic economy. That being said, we do think there are still opportunities for investors if they are selective. Given the concerns over the consumer and elevated valuations there are clear risks that investors need to consider. We believe investors will need to concentrate their portfolio in names that are attractively priced and not exposed to the major risk factors to generate an adequate return. RD27119 For Financial Professional Use Only. Not for Public Distribution.

2 2 Select Australian Equity The Select Australian Equity strategy is an actively managed portfolio that invests in Australian equities that we believe are trading below their intrinsic value. The strategy is benchmark unaware and seeks to deliver excess performance by owning a highly concentrated portfolio of securities (generally 12 3 holdings) chosen for their potential to deliver large absolute returns over the long term. Number of Securities 25 2 Weighted Average Market Cap ($B) Forward Price/Earnings Forward Return on Equity Price/ Flow Dividend Yield Free Flow Yield Year EPS Growth Rate Assets Under Management ($M)* 2,198 N/A Top 5 Holdings 2 Sector Exposure Short As at 3 June Long Interest-Rate Sensitive Related Short = Technology, Media, and Telecommunications; Long = Basic Materials and Industrials; Interest-Rate Sensitive = Banks, Insurance, and Utilities; Related = Staples and Discretionary. Stock Woodside Petroleum QBE Insurance Wesfarmers Alumina AMP Stock 3 Top 5 Contributors Weight Effect Top 5 Detractors Weight Effect Woodside Petroleum AMP Alumina Telstra Corporation Wesfarmers Brambles Rio Tinto Spark Infrastructure Group Atlas Arteria Ridley Corporation Securities identified are not necessarily held by Asset Management for all client portfolios and should not be considered as a recommendation or solicitation to purchase, sell, or hold these securities. It should also not be assumed that any investment in these securities was or will be profitable. 3 is based upon the Select Australian Equity representative account and is based on total return. analysis is provided for illustrative purposes only, as values are calculated based on returns gross of fees. Performance would be lower if fees and expenses were included. Past performance is not a reliable indicator of future results. 4 Allocations and securities mentioned are based upon a portfolio which represents the proposed investments for a fully discretionary account. Allocations and security selection Source:, FactSet Estimates

3 3 Australian Equity The Australian Equity strategy is an actively managed portfolio that invests in Australian equities that we believe are trading below their intrinsic value. Key benchmark risks are taken into consideration when constructing the portfolio. However, the strategy does take large active positions, holding generally securities chosen for their potential to deliver large, absolute returns over the long term. Top 5 Holdings 2 Number of Securities 31 2 Weighted Average Market Cap ($B) Forward Price/Earnings Forward Return on Equity Price/ Flow Dividend Yield Free Flow Yield Year EPS Growth Rate Assets Under Management ($M)* 4,13 N/A Sector Exposure Short As at 3 June Long Interest-Rate Sensitive Related Short = Technology, Media, and Telecommunications; Long = Basic Materials and Industrials; Interest-Rate Sensitive = Banks, Insurance, and Utilities; Related = Staples and Discretionary. Stock ANZ Commonwealth Bank Wesfarmers BHP Billiton Rio Tinto Stock 3 Top 5 Contributors Weight Effect Top 5 Detractors Weight Effect Wesfarmers AMP BHP Billiton Telstra Corporation Woodside Petroleum Brambles Rio Tinto Spark Infrastructure Group Alumina Greencross Securities identified are not necessarily held by Asset Management for all client portfolios and should not be considered as a recommendation or solicitation to purchase, sell, or hold these securities. It should also not be assumed that any investment in these securities was or will be profitable. 3 is based upon the Australian Equity representative account and is based on total return. analysis is provided for illustrative purposes only, as values are calculated based on returns gross of fees. Performance would be lower if fees and expenses were included. Past performance is not a reliable indicator of future results. 4 Allocations and securities mentioned are based upon a portfolio that represents the proposed investments for a fully discretionary account. Allocations and security selection Source:, FactSet Estimates, Standard & Poor s

4 4 Australian Diversified Income The Australian Diversified Income strategy is designed to provide regular, tax-effective income that grows over time. It sources that income by investing in Australian companies with sustainable dividends, or by investing in cash, depending on where the best opportunities exist. The strategy has a total return focus through the objective of providing both income and capital growth. Number of Securities 24 2 Weighted Average Market Cap ($B) Forward Price/Earnings Forward Return on Equity Price/ Flow Dividend Yield Free Flow Yield Year EPS Growth Rate Assets Under Management ($M)* 9. N/A Current Yield 4 RBA Rate 1.5 MSCI World Equity 2.4 Aus 1-Year Bond Australian Diversified Income 4.9 Top 5 Holdings 5 Stock Woodside Petroleum Atlas Arteria Wesfarmers Pendal Crown Resorts Stock 2 Top 5 Contributors Weight Effect Top 5 Detractors Weight Effect Woodside Petroleum AMP Wesfarmers Greencross -.78 HT&E Telstra Rio Tinto Ridley -.35 Atlas Arteria Brambles Sector Exposure Financials Discretionary Industrials Energy Real Estate Staples Utilities Information Technology Materials 2.3 Telecom Services 8.5 Health Care is based upon the Australian Diversified Income strategy representative account and is based on total return. analysis is provided for illustrative purposes only, as values are calculated based on returns gross of fees. Performance would be lower if fees and expenses were included. Past performance is not a reliable indicator of future results. 3 Allocations and securities mentioned are based upon a portfolio which represents the proposed investments for a fully discretionary account. Allocations and security selection 4 As at 3 June 218. Current yield is calculated on a rolling 12-month basis. Source:, Bloomberg 5 Securities identified are not necessarily held by Asset Management for all client portfolios and should not be considered as a recommendation or solicitation to purchase, sell, or hold these securities. It should also not be assumed that any investment in these securities was or will be profitable. Source:, Bloomberg, FactSet Estimates, Standard & Poor s

5 Australian Equity This content represents the views of the author(s), and its conclusions may vary from those held elsewhere within Asset Management. is committed to giving our investment professionals the autonomy to develop their own investment views, which are informed by a robust exchange of ideas throughout the firm. Important Information Published on 3 August 218. Information and opinions presented have been obtained or derived from sources believed by to be reliable. makes no representation as to their accuracy or completeness. All opinions expressed herein are as at 3 June 218 and The performance data within are in compliance with the Global Investment Performance Standards (GIPS ). To receive a complete list and description of the composites, contact Melanie McQuire at , or write to Asset Management Pacific Co., Level 39, Gateway, 1 Macquarie Place, Sydney, NSW 2, or melanie.mcquire@lazard.com. All sources are Asset Management unless otherwise noted. This document is provided by Asset Management LLC or its affiliates ( ) for informational purposes only. Nothing herein constitutes investment advice or a recommendation relating to any security, commodity, derivative, investment management service or investment product. Investments in securities, derivatives and commodities involve risk, will fluctuate in price, and may result in losses. Certain assets held in s investment portfolios, in particular alternative investment portfolios, can involve high degrees of risk and volatility when compared to other assets. Similarly, certain assets held in s investment portfolios may trade in less liquid or efficient markets, which can affect investment performance. Past performance does not guarantee future results. This document is intended only for persons residing in jurisdictions where its distribution or availability is consistent with local laws and s local regulatory authorizations. The entities that have issued this document are listed below, along with important limitations on their authorized activities. Australia: Issued by Asset Management Pacific Co., ABN , AFS License , Level 39 Gateway, 1 Macquarie Place, Sydney NSW 2, which is licensed by the Australian Securities and Investments Commission to carry on a financial services business. This document is intended for wholesale investors only. Canada: Issued by Asset Management (Canada) Inc., 3 Rockefeller Plaza, New York, NY 1112 and 13 King Street West, Suite 18, Toronto, Ontario M5X 1E3, a registered portfolio manager providing services to non-individual permitted clients. Dubai: Issued and approved by Gulf Limited, Gate Village 1, Level 2, Dubai International Financial Centre, PO Box 56644, Dubai, United Arab Emirates. Registered in Dubai. International Financial Centre 467. Authorised and regulated by the Dubai Financial Services Authority to deal with Professional Clients only. EU Member States: Issued by Asset Management (Deutschland) GmbH, Neue Mainzer Strasse 75, D-6311 Frankfurt am Main. Hong Kong: Issued by Asset Management (Hong Kong) Limited (AQZ743), One Harbour View Street, Central, Hong Kong. Asset Management (Hong Kong) Limited is a corporation licensed by the Hong Kong Securities and Futures Commission to conduct Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities only on behalf of professional investors as defined under the Hong Kong Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and its subsidiary legislation. Korea: Issued by Korea Asset Management Co. Ltd., 1F Seoul Finance Center, 136 Sejong-daero, Jung-gu, Seoul, People s Republic of China: Issued by Asset Management. Asset Management does not carry out business in the P.R.C and is not a licensed investment adviser with the China Securities Regulatory Commission or the China Banking Regulatory Commission. This document is for reference only and for intended recipients only. The information in this document does not constitute any specific investment advice on China capital markets or an offer of securities or investment, tax, legal or other advice or recommendation or, an offer to sell or an invitation to apply for any product or service of Asset Management. Singapore: Issued by Asset Management (Singapore) Pte. Ltd., 1 Raffles Place, #15-2 One Raffles Place Tower 1, Singapore Company Registration Number W, which provides services only to institutional investors or accredited investors as defined under the Securities and Futures Act, Chapter 289 of Singapore. United Kingdom: Issued or approved by Asset Management Ltd., 5 Stratton Street, London W1J 8LL. Registered in England Number Authorised and regulated by the Financial Conduct Authority (FCA), providing services only to persons classified as eligible counterparties or professional clients under the rules of the FCA. United States: Issued by Asset Management LLC, 3 Rockefeller Plaza, New York, NY For Financial Professional Use Only. Not for Public Distribution.