In December, the HNW Australian Equity Portfolio gained by +0.96% slightly trailing its benchmark ASX200TR (ex LPT) return of 1.25%. December turned out to be a quieter month, with minimal corporate news. A nice end to what had been a stressful and volatile year for investors (see chart below), which turned out to be an “average” year for Australian equity investors (see below chart).
Over the month, the Portfolio saw significant dispersion in returns, with positions in Dalyrmple Bay (+12%), WhiteHaven Coal (+12%), Min Res (11%), ANZ Bank (+5%), Ampol (+4%), and QBE (3%) added value over the month.
We were very pleased with Dalyrmple Bay restructuring the company’s debt at much lower rates and increasing the quarterly dividend, which confirmed our investment thesis on the stock and validated the switch out from Bapcor in early September. Bapcor’s woes continued in December, with further downgrades, the CEO being moved on, and the company being kicked out of the ASX200 index. On the negative side of the ledger, CSL (-7%), Lotteries (-6%), Woodside (-5%) and Amcor (-4%) hurt performance, albeit on no news. The bubble in Commonwealth Bank (+5%) seemed to be back on and hurt performance in December, a curious move after the bank’s share price fell -11% last month.
Income was solid over the month with three companies in the Portfolio (Transurban, Dalyrmple Bay & Dyno) declaring dividends. As expected cash has built to 4.3% and we will look to reinvest that at the next HNW IC
In December, the HNW Australian Equities Income Focus Portfolio had a solid month +0.77% but behind its benchmark return of 0.92%. Over the month, the Portfolio saw significant dispersion in returns, with positions in Dalyrmple Bay (+12%), WhiteHaven Coal (+12%), ANZ Bank (+5%) and Ampol (+4%) adding value over the month. On the negative side of the ledger Lotteries (-6%), Woodside (-5%) and Amcor (-4%) hurt performance
Income was strong in December with seven portfolio companies declaring dividends (Transurban, Dexus Industrial, Dyno, Region, Charter Hall Retail, Dalyrmple Bay and Arena REIT)
Full reports to follow shortly.
