Insync June 2019 Fund Commentary


Performance Commentary

Global equities finished higher in June on expectations of monetary stimulus from the US Federal Reserve and the European Central Bank due to weak economic data, ongoing trade concerns and low inflation. Developed markets continued to outperform emerging markets. Manufacturing surveys have weakened around the world, with a notable decline in the US business surveys and continued weakness in China, Japan and Europe. Germany’s manufacturing sector in particular looks to be struggling.

By sector, technology and financials were the leaders and the laggards were energy, real estate and health care. From a style perspective, growth continued its trend of outperforming value which has largely been in place since the 2008 global financial crisis.

For the month of June, the Insync Global Capital Aware fund delivered a return of +6.02%, after the cost of downside protection, and the long-only Global Quality Equity Fund delivered a return of +6.66%. This was compared to the benchmark return of +5.22% over the same period. Strong contributions from stock selection was the key driver.

For the 12 months to 30th June the Global Capital Aware Fund delivered a return of +15.37% versus the benchmark return of 11.32%.

Fund Performance

Positive performers during the month included Booking Holdings, Visa, Zoetis, Facebook and Boston Scientific Corp. Detractors were Ross Stores, London Stock Exchange, PayPal Holdings, Reed Elsevier and Amadeus IT. No currency hedging continues across both funds. Insync considers the main risks to the Australian dollar to be on the downside.

Current market conditions continue to reflect the trend in place since the GFC of low growth and low inflation. If this trend continues to persist then investing in a portfolio of high ROIC stocks benefitting from global megatrends should prevail as the Insync portfolio of companies is less dependent on expansion of the global economy to generate consistent profitable growth. The portfolio, which has very specific quality and growth attributes, continues to pick up almost all of the upside in rising markets as well as, importantly, buffering the fund from significant market falls.

Disclaimer

EQT Responsible Entity Services Limited (“EQT”) (ABN 94 101 103 011), AFSL 223271, is the Responsible Entity for the Insync Global Quality Equity Fund and the Insync Global Capital Aware Fund . EQT is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). This information has been prepared by Insync Funds Management Pty Ltd (ABN 29 125 092 677, AFSL 322891) (“Insync”), to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Insync, EQT nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.

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©2018 by Insync Funds Management Pty Ltd.

Disclaimer

The rating contained in this document is issued by SQM Research Pty Ltd ABN 93 122 592 036 AFSL 421913. SQM Research is an investment research firm that undertakes research on investment products exclusively for its wholesale clients, utilising a proprietary review and star rating system. The SQM Research star rating system is of a general nature and does not take into account the particular circumstances or needs of any specific person. The rating may be subject to change at any time. Only licensed financial advisers may use the SQM Research star rating system in determining whether an investment is appropriate to a person’s particular circumstances or needs. You should read the product disclosure statement and consult a licensed financial adviser before making an investment decision in relation to this investment product. SQM Research receives a fee from the Fund Manager for the research and rating of the managed investment scheme.