Hyperion Global Growth Companies Fund

Performance

Portfolio –
Net (%)
      Benchmark*
(%)
Excess
Performance (%)
 1 month 0.4 0.4 -0.1
 3 month -0.9 2.8 -3.6
 1 year 19.3 16.6 2.7
 3 years p.a. 23.1 16.3 6.8
 5 years p.a. 21.0 13.6 7.4
 Inception* p.a. 19.6 13.8 5.8

Top 5 Stock Holdings

Portfolio (%) Benchmark* (%)
Amazon.com, Inc. 8.9 1.8
Alphabet Inc. Class A 7.9 0.9
Microsoft Corporation 6.8 2.5
Facebook, Inc. Class A 6.2 1.1
PayPal Holdings Inc 6.0 0.3

* Inception date: 1st June 2014. Benchmark is the MSCI World Index (AUD).
Past performance is not a reliable indicator of future performance.

Fund Review

LVMH Moët Hennessy Louis Vuitton (MC-FR) released its sales revenue results for the third quarter ended 30 September 2019, reporting revenue growth of 16% to €38.4b. Overall, MC-FR achieved strong revenue growth across all geographical areas, Japan was up 20% to €2.7b, Asia ex Japan +12% to €11.9b, Europe +11% to €10.4b and the U.S. +8% to €8.8b. Divisionally, the Fashion & Leather Goods segment achieved revenue growth of 22% to €15.9b, driven by Louis Vuitton and Christian Dior Couture experiencing strong growth across all their product categories. Selective Retailing was the next best performer with revenue increasing 11% to €10.6b driven by Sephora which continued to experience strong organic revenue growth, especially in Asia and the Middle East. Wine & Spirits revenue increased 10% to €3.9b following strong demand from China and the U.S., with Hennessy cognac volumes up 10% driven by VS qualities. Elsewhere, Perfumes & Cosmetics revenue was up 11% to €4.9b, whilst Watches & Jewelry revenue increased 8% to €3.3b driven by rapid progress across Jewelry, especially in directly operated stores.

Microsoft Corporation (MSFT-US) released its results for the first quarter ended 30 September 2019, reporting revenue growth of 14% to $33.1b, operating margin expansion of 415bps to 33.4% and EPS growth of 21% to $1.38 per share. The company’s Productivity and Business Processes segment grew revenue by 13% to $11.1b, and achieved operating margin expansion of 345bps to 43.2% with operating income increasing 23% to $4.8b, driven by continued growth across its Office, Dynamics and LinkedIn products and services offerings. MSFT-US’s Intelligent Cloud segment grew revenue by 27% to $10.8b, while operating margins expanded by 165bps to 35.9% and operating income increased 33% to $3.9b, driven by a strong performance from Azure which achieved revenue growth of 59%. Furthermore, the More Personal Computing segment achieved revenue growth of 4% to $11.1b, achieving operating margin expansion of 682bps to 36.1% with operating income increasing 28% to $4.0b, driven by growth achieved across Windows, Surface and Search Advertising. A major highlight of the result was the continued growth in commercial cloud revenue which increased 36% and now represents 35% of the total revenue.

PayPal Holdings Inc (PYPL-US) released a market update for the quarter ended 30 September 2019, reporting revenue growth of 19% to $4.4b, operating margin expansion of 207bps to 23.4% and EPS growth of 31% to $0.76 per share (excludes unrealised losses on investment portfolio). Geographically, the company grew net revenue in the U.S. by 19% to $2.3b and by 19% to $2.1b Internationally. Operationally, the company continues to produce strong engagement metrics with the number of active accounts growing 16% to 295m with each account on average conducting 39.8 transactions, up 9%. The number of payment transactions processed by PYPL-US grew 25% to 3.1b, with Total Payment Volumes (TPV) up 25% to $178.7b. Management provided full year 2019 guidance for revenue to be between $17.7b to $17.76b and TPV growth in the mid-20% range.

OBJECTIVE: LONG-TERM CAPITAL GROWTH AND INCOME BY INVESTING IN HIGH QUALITY GLOBAL COMPANIES PRIMARILY LISTED WITHIN THE MSCI WORLD MARKETS AT THE TIME OF INVESTMENT.

Hyperion named AUSTRALIAN FUND MANAGER OF THE YEAR in the Morningstar 2016 Awards, Australia.

The Fund’s Product Disclosure Statement contains more complete information on risks and fees.

CONTACT US
DISTRIBUTION PARTNER
Pinnacle Investment Management Limited
Tel: 1300 010 311
distribution@pinnacleinvestment.com
DOWNLOAD PDF COPY OF FUND UPDATE
DISCLAIMER – HYPERION GLOBAL GROWTH COMPANIES FUND (CLASS B UNITS)
This communication was prepared for financial advisers only. Interests in the Hyperion Global Growth Companies Fund (ARSN 611 084 229) (‘Fund’) are issued by Pinnacle Fund Services Limited (ABN 29 082 494 362 AFSL 238 371). Pinnacle Fund Services Limited is not licensed to provide financial product advice. Hyperion Asset Management Limited (ABN 80 080 135 897 AFSL 238 380) (‘Hyperion’) is the investment manager of the Fund. A copy of the most recent Product Disclosure Statement (‘PDS’) of the Fund can be located at www.hyperion.com.au , or by contacting Hyperion at 1300 497 374 or via email to investorservices@hyperion.com.au. You should consider the current PDS in its entirety and consult your financial adviser before making an investment decision. Pinnacle Fund Services Limited and Hyperion believe the information contained in this communication is reliable, however its accuracy, reliability or completeness is not guaranteed. To the extent permitted by law, Hyperion and Pinnacle Fund Services Limited disclaim all liability to any person relying on the information in respect of any loss or damage (including consequential loss or damage) however caused, which may be suffered or arise directly or indirectly in respect of such information contained in this communication. Any opinions or forecasts reflect the judgment and assumptions of Hyperion and its representatives on the basis of information at the date of publication and may later change without notice. The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. This communication is for general information only. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice relevant to their particular circumstances, needs and investment objectives. Past performance is not a reliable indicator of future performance. Unless otherwise specified, all amounts are in AUD. All data is as at 31st October 2019 unless otherwise stated. Morningstar Awards 2016 (c). Morningstar, Inc. All Rights Reserved. Awarded to Hyperion Asset Management for Fund Manager of the Year, Domestic Equities – Large Caps Category Winner and Domestic Equities – Small Caps Category Winner, Australia.
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