Hyperion Global Growth Companies Fund

NOVEMBER 2019

Performance

Portfolio –
Net (%)
      Benchmark*
(%)
Excess
Performance (%)
 1 month 5.6 4.7 0.8
 3 month 3.9 7.4 -3.4
 1 year 27.7 24.4 3.3
 3 years p.a. 25.0 16.4 8.6
 5 years p.a. 20.7 13.5 7.2
 Inception* p.a. 20.5 14.5 6.0

Top 5 Stock Holdings

Portfolio (%) Benchmark* (%)
Microsoft Corporation 8.9 2.5
Amazon.com, Inc. 8.5 1.7
Alphabet Inc. Class A 8.5 0.9
Facebook, Inc. Class A 6.2 1.1
PayPal Holdings Inc 5.9 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

Global equity markets were broadly up for a third consecutive month as optimism around trade negotiations between the U.S. and China continued to dominate the headlines. In the U.S., the S&P 500 Index returned +3.6%, with the composite PMI rising to 51.9, the best reading since July, primarily driven by increases in activity across both the manufacturing and services sectors. In Europe, the German DAX, Euro STOXX 50 and FTSE 100 Indexes returned +2.9%, +2.8% and +1.8%, respectively. During the month, data revealed the euro areas unemployment rate declined to 7.5% in October, the lowest rate recorded since July 2018. In addition, economic activity was subdued after the Eurozone’s composite PMI declined to 50.3 following continued weak activity across the manufacturing and services sectors. In Australia, the S&P/ASX 300 Index returned +3.2% with economic data revealing an increase in house prices during November and weaker retail trading activity and wages growth during the third quarter of 2019. Information technology (+10.6%), health care (+8.8%) and consumer staples (+8.1%) were the best performing sectors. Financials (-2.0%), utilities (-0.5%) and REITs (+2.3%) were the worst performers. Bulk commodity prices were mixed during November with gold and thermal and hard coking coal prices falling, whilst iron ore and brent oil rose. The U.S. dollar was up against most G10 currencies during the month, except against the New Zealand Dollar and Swedish Krona.

Ferrari NV (RACE-IT) released a market update for the third quarter ended 30 September 2019, reporting group net revenue growth of 9% to €915m, adjusted EBITDA margin expansion of 70bps to 33.9% and adjusted EPS increased 17% to €0.90 per share. At the segment level, Cars and Spare Parts revenue increased 15% to €708m, driven by the Ferrari Portofino, the 812 Superfast, and the 488 Pista & 488 Pista Spider models and a greater contribution from the segment’s personalization programs. Engines revenue was weaker, down 34% to €24m reflecting lower engine shipment sales to Maserati. Sponsorship, commercial and brand revenue increased 6% to €135m, primarily driven by higher revenue generated from Formula 1 racing activities. Shipments for the RACE-IT group totaled 2,474 units, up 212 units or +9% on Q3CY18. Geographically most regions contributed positively to shipments, with EMEA up 14% to 1,143 units, Rest of APAC up 23% to 400 units, Americas up 0.2% to 772 units, whilst Mainland China, Hong Kong and Taiwan declined 2% to 159 units. Management also took the opportunity to upgrade guidance, now expecting revenue to be approximately €3.7b, adjusted EBITDA of €1.3b and free cash flow to be greater than €0.6b.

Intuit Inc (INTU-US) released results for the first quarter ended 31 October 2019, reporting revenue growth of 15% to $1.2b, operating margin expansion of 103bps to 11.1% and EPS growth of 41% to $0.41 per share. Divisionally, the company’s Small Business & Self-Employed division achieved revenue growth of 15% to $1.0b, operating income margin expansion of 192bps to 52.6% and operating income growth of 20% to $550m due to growth in Online Ecosystem revenue. Consumer revenue increased 11% to $100m whilst Strategic Partner achieved revenue growth of 6% to $19m. The company’s online ecosystem revenue increased 35% to $501m, whilst desktop ecosystem revenue was up 1% to $545m. Management expects revenue to be between $7.4b to $7.5b and EPS to be between $6.35 to $6.45 per share for the twelve months ending 31 July 2020.

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 30 November 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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