Hyperion High Conviction Large Cap Report

Global equity markets recovered from the decline experienced during May, ending June higher. In the U.S., the S&P 500 Index returned +7.0% after the Federal Open Market Committee agreed to maintain the Federal Funds Rate target range of 2.25% to 2.50%. In addition, the U.S. and China both agreed to cease from further increasing existing tariffs during the G20 summit, as both nations continue trade negotiations. In Europe, the Euro STOXX 50, German DAX and FTSE 100 Indexes all finished higher returning +6.0%, +5.7% and +4.0% respectively. During the month, German unemployment rose, whilst Eurozone Composite PMI improved with Services PMI recovering to a seven-month high of 56.4. In Australia, the S&P/ASX 300 Index returned +3.7%, as the unemployment rate rose to 5.2% and the RBA reduced the cash rate by 0.25% to a new all-time low of 1.25%. Materials (+6.2%), industrials (+5.6%) and health care (+4.4%) were the best performing sectors. Consumer discretionary (-1.5%), informational technology (+1.1%) and energy (+2.2%) were the worst performers. Bulk commodity prices were mixed during the month, with iron ore, brent oil and gold prices trading higher whilst thermal and hard coking coal prices declined. The U.S. Dollar declined against all G10 currencies during the month.

Market Outlook

June was a quiet month for portfolio news ahead of the Australian reporting season in August. The team attended several company and industry meetings in relation to prospective and current portfolio companies to gain insight and build a deeper understanding of their respective industries.

We remain confident that the companies in the portfolios will achieve attractive rates of revenue, EPS and DPS growth over the next five years, well ahead of the broader market.

Portfolio
(%)
    Benchmark*
(%)
Excess
Performance (%)
  1 month 2.50 3.64 -1.14
  3 month 7.20 8.05 -0.85
  1 year 7.01 11.42 -4.41
  3 years p.a. 9.77 12.82 -3.05
  5 years 10.17 8.88 1.29
* Benchmark is the S&P/ASX 300 Accumulation Index.
Performance is gross of fees and expenses.
Past performance is not a reliable indicator of future performance

Carsales.com Ltd (CAR-AU) announced that it is conducting a strategic review and will be pursuing the sale of its 50.1% interest in Stratton Finance Pty Ltd (Stratton). Stratton is a leading player in the asset finance and insurance market, assisting customers finance approximately $750m of assets each year by providing innovative finance arrangements for vehicles, boats and other leisure items, vehicle procurement and other related services. CAR-AU expects to continue its strong commercial relationship with Stratton and allow the business to focus on its other core business growth opportunities across its Australian and international operations. The timing of the sale will be determined following the completion of the independent strategic review, which Miles Partners has been engaged to conduct.

Cochlear Limited (COH-AU) advised that it has received FDA approval for its Nucleus® Profile™ Plus Series cochlear implant and will commence an immediate U.S. launch. The new implant is the thinnest in the world at only 3.9mm and offers improved MRI compatibility without the need to remove the implant’s magnet.

OBJECTIVE: MEDIUM TO LONG-TERM CAPITAL GROWTH AND INCOME BY INVESTING IN HIGH CALIBRE AUSTRALIAN COMPANIES PRIMARILY LISTED WITHIN THE S&P/ASX 300, AT THE TIME OF INVESTMENT.

 

 

 

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

The information in this document was prepared by Hyperion Asset Management Limited (‘Hyperion’), ABN 80 080 135 897 AFSL 238 380, for wholesale investors. 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 document does not take account of any person’s objectives, financial situation or needs and before acting, an investor should consider the appropriateness of the investment having regard to their objectives, financial situation and needs. 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. This document is provided to the recipient only and must not be copied or passed on to any other person without the consent of Hyperion Asset Management Limited. Past performance is not an indicator or guarantee of future performance. Investment performance is presented gross of investment management fees and other expenses, including custody. Hyperion Asset Management Limited believes the information contained in this communication is reliable, however, no warranty is given as to its accuracy and persons relying on this information do so at their own risk. To the extent permitted by law, Hyperion disclaims 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. Figures provided as at 30th June 2019. 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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