In May, the HNW Core Portfolio gained +0.3%, trailing the benchmark’s return of 1.04%. The dominant theme was again confusion surrounding the Iran conflict, with energy prices gyrating wildly daily amid proclamations from Trump that the Iranians had already agreed to American terms and later fuming that they had not. Oil fell by 17% over the month, mainly in the last week, amid optimism that a solution had been reached with Iran. However, oil prices have rallied in June with new air strikes from Israel and the USA and Iran sending missiles and drones against Kuwait.
Positions in Mineral Resources (+15%), Dyno Nobel (+15%), Wesfarmers (+9%), Deterra (+9%), Transurban (+7%), and Amcor (+5%) added value. On the negative side of the ledger, energy positions Woodside (-8.5%) and Ampol (-5%) hurt performance. CSL (-22%) was weaker after earnings were rebased and a large non-cash asset write-off on the 2021 Vifor acquisition, though this was offset by upgrades from Mineral Resources, Dyno and Macquarie Bank (+3%).
We remain happy to have a large Portfolio weight towards energy, as we see that the full impacts of restricted energy flows are yet to be seen in global economies and that a lasting peace process is unlikely to be achieved quickly. Indeed, the last time that the Jewish and Muslim inhabitants of the Levant were united was in July 1099 when Crusader general Godfrey of Bouillon sacked Jerusalem, slaughtering or forcibly converting the Jewish and Muslim inhabitants to Christianity and reassigned Al-Aqsa Mosque and the Dome of the Rock into Christian sites. Actions that make Trump’s threats seem quite tame.
Income was a feature in the Portfolio over the month with seven companies declaring dividends – Westpac, Dyno, ANZ, Newmont, Macquarie, Dalrymple Bay and Amcor. These will be paid into investors’ bank accounts in June.
In May, the HNW Income Portfolio was largely flat up 0.16% and behind its blended benchmark return of 0.88%. We remain pleased with the consistent performance and low volatility of the HNW Income Portfolio. Similar to the Core Portfolio, the Income Portfolio benefited from holdings in Dyno Nobel (+15%), Wesfarmers (+9%), Deterra (+9%), Transurban (+7%), and Amcor (+5%). On the negative side of the ledger, Woodside (-8.5%), Ampol (-5%) and Westpac (-4%) hurt performance.
Income was a feature in the Portfolio over the month with six companies declaring dividends. June will see a further five companies held in the HNW Income Portfolio declare dividends towards the end of the month.
Full Reports will be issued shortly.
