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Forsyth Barr Global Equities Fund

The fund aims to achieve positive long-term returns by investing in selected international shares, subject to the risks associated with investments in international share markets.

Unit Price

AS AT 6 Aug 2020

1.5443 NZD


Month End Unit Price

As at 30 Jun 2020

1.5001 NZD

Manager's Comment

Market Commentary

The Global Equity Fund (GEF) had one of its strongest returns over the June quarter, increasing by +13.1% (gross of fees and taxes) and clawing back the loss incurred over the March quarter (down -8.27%). Despite the extraordinary period of volatility, due to the spread of the COVID-19 virus and subsequent closure of borders across the world, the fund has achieved a positive gross return of +3.75% for the year to date (six months to 30 June 2020), which is +7.05% ahead of its global benchmark. 

Portfolio Positioning

Throughout most of 2020 the GEF has been conservatively positioned, holding on average close to 10% in cash for the purpose of taking advantage of market volatility and repositioning sector exposures. Over the past quarter the fund has reduced its exposure to Chinese companies by -3.0% from 12.6% to 9.6%, Communications Services sector by -2.0% from 12.3% to 10.4% and divested our holding in ING Groep. The proceeds have been used to up-weight holdings to two key sectors: i) Leading global consumer stocks, Kering (Luxury, owns Gucci), Adidas (activewear), Estee Lauder (cosmetics) and Starbucks (coffee, restaurant); and ii) Information Technology, through the purchase of Intel, which should benefit from the anticipated uplift in demand for laptops and PCs as global businesses enable “work-at-home” to add workplace flexibility. 

The fund has maintained its highest sector weighting of 25% to the Healthcare sector, having trimmed holdings in AstraZeneca and Illumina, and introducing two new stocks, Abbott Laboratories and Bristol-Myers Squibb. We believe our group of healthcare companies collectively provide an excellent exposure to both leading incumbent healthcare treatments/pharmaceuticals and to new breakthrough treatments/cures across a broad spectrum of health issues.

Outlook

Looking ahead, the fund continues to be positioned defensively, closing the month with a cash balance of 8.0%. We have deliberately steered clear of chasing the more risky low-growth cyclical stocks (Financials & Materials) in favour of identifying companies we believe should resume attractive, medium-term, growth prospects in a post COVID-19 world. The timing and magnitude of the global economic recovery remains highly uncertain, which is why we plan to stick with our strategy of owning global leading companies in the Information Technology, Healthcare and Consumer sectors.

 

We actively manage the fund’s foreign currency exposures. As at 30 June 2020, these exposures represented 97.09% of the value of the fund. After allowing for foreign currency hedges in place, 72.92% of the value of the fund was unhedged and exposed to foreign currency risk.

Major Investments

As at 30 Jun 2020

Company name Volume
Alphabet Inc Class A 5.25%
Apple Inc. 5.01%
Amazon.com, Inc. 4.45%
NIKE, Inc. 4.31%
Visa Inc.- Class A Shares 4.04%
Intel Corp 3.92%
Comcast Corp Class A 3.78%
LVMH Moet Hennessy- Louis Vuitton 3.54%
Baxter International Inc. 3.32%
Medtronic Inc. 3.26%
Major holdings as % of total portfolio 40.90%
Total portfolio holdings 43

Return Comparison

As at 30 Jun 2020

1 Month 3 Months 1 Year 3 Years* Since commenced operation*
*Annualised
Net Fund Return 1 Month -1.14% 3 Months 11.68% 1 Year 13.54% 3 Years* 10.65% Since commenced operation* 2.92%
Gross Fund Return 1 Month -0.68% 3 Months 13.10% 1 Year 16.08% 3 Years* 13.27% Since commenced operation* 4.58%
MSCI ACWI Net TR Index (0% hedged to the NZD) 1 Month -0.73% 3 Months 9.79% 1 Year 6.54% 3 Years* 10.79% Since commenced operation* 6.89%
MSCI ACWI Net TR Index (50% hedged to the NZD) 1 Month 1.08% 3 Months 14.06% 1 Year 5.10% 3 Years* 9.09% Since commenced operation* 8.06%
MSCI ACWI Net TR Index (100% hedged to the NZD) 1 Month 2.89% 3 Months 18.41% 1 Year 3.41% 3 Years* 7.22% Since commenced operation* 8.88%

The unit prices shown do not take into account any adjustment for PIE tax.

Net Fund Returns are calculated after deduction of fund charges, trading expenses and accrued tax for a New Zealand resident paying individual tax at the highest Prescribed Investor Rate (28%). Gross Fund Returns are calculated before deduction of taxes and fund charges but after deduction of trading expenses. Market index returns do not have any deductions for fund charges, trading expenses or tax.

Morningstar Performance

Morningstar, are a leading global provider of independent investment research that rank and report on Funds within New Zealand and Australia. View the latest Fund Report for the Global Equities Fund here.

Fund update

As at 30 June 2020

This document tells you how the Forsyth Barr Global Equities Fund has performed and what fees were charged. The document will help you to compare the fund with other funds.

General Fund Information

Risk indicator

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LOWER RISK
HIGHER RISK

The risk indicator is rated from 1 (low) to 7 (high). The rating reflects how much the value of the relevant fund’s assets goes up and down (volatility). A higher risk generally means higher potential returns over time, but more ups and downs along the way. The risk indicator is based on the returns data for the five years to 30 June 2020. See more information about the risks of investing in the Product Disclosure Statement.

Target investment mix

Price Volume
Cash and cash equivalents 10.00%
New Zealand fixed interest 0.00%
International fixed interest 0.00%
Australasian equities 0.00%
International equities 90.00%
Listed property 0.00%

Things to note

  • Manager: Forsyth Barr Investment Management Limited
  • Date the fund started: 26 June 2008
  • Tax status: Portfolio Investment Fund (PIE)
  • Minimum suggested investment time frame: At least five years
  • Benchmark: None
  • Currency: New Zealand dollars
  • View the Product Disclosure Statement for detailed information about this Fund and Forsyth Barr Investment Funds Scheme.

Fees

Annual fund charges are currently 1.55% of the net asset value of the fund (estimated), made up of our management fee (1.50% of the portion of the fund's assets that we invest directly or 0.50% of the portion of the fund's assets that we invest in other managed funds) and other annual fund charges (0.05%, estimated).

All fees and charges are quoted exclusive of GST.

Forsyth Barr Investment Management is the manager of the Investment Funds. The comments on this webpage do not take your personal circumstances into account. Before acting on this information, please contact your Forsyth Barr Authorised Financial Adviser. His or her disclosure statement is available on request and free of charge. Forsyth Barr Limited and its affiliates do not make any representation or warranty (express or implied) that this webpage is accurate, complete, or current and to the maximum extent permitted by law disclaim any liability for loss which may be incurred by any person relying on this webpage. This webpage is not intended to be distributed or made available to any person in any jurisdiction where doing so would constitute a breach of any applicable laws or regulations.

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22 locations around New Zealand

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