Hyperion High Conviction Large Cap Report

Global equity markets were broadly up during October as phase one of trade negotiations between the U.S. and China were finalised and further Brexit negotiation delays dominated headlines. In the U.S., the S&P 500 Index returned +2.2%, as the Federal Open Market Committee lowered the Federal Funds Rate target range for a third time this year, by 25 basis points to 1.50% – 1.75%. In Europe, the German DAX, Euro STOXX 50 and FTSE 100 Indexes returned +3.5%, +1.1% and -1.9%, respectively. During the month, the European Central Bank kept interest rates unchanged and confirmed its Asset Purchase Programme would commence from 1 November at a monthly pace of €20 billion. In addition, U.K. lawmakers delayed a crucial vote that forced the British government to ask the European Union for a further extension on Brexit negotiations to the previously negotiated October 31 deadline. In Australia, the S&P/ASX 300 Index returned -0.4% after the Reserve Bank of Australia lowered the official cash rate to a new low of 0.75%. Health Care (+7.3%), industrials (+2.9%) and REITs (+1.4%) were the best performing sectors. Information technology (-3.2%), financials (-2.9%) and consumer staples (-2.2%) were the worst performers. Bulk commodity prices were mixed with hard coking coal and gold prices rising, whilst iron ore, thermal coking coal and brent oil prices fell. The U.S. dollar broadly declined against most G10 currencies during the month, expect against the Norwegian Krone and Japanese Yen.

Performance

Portfolio
(%)
    Benchmark*
(%)
Excess
Performance (%)
  1 month 3.22 -0.38 3.60
  3 month 4.01 -0.78 4.79
  1 year 25.12 19.50 5.62
  3 years p.a. 13.63 12.53 1.10
  5 years p.a 11.27 8.56 2.71
  7  years p.a. 14.42 10.38 4.05
  10 years p.a. 10.80 8.23 2.57
* 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

HUB24 Limited (HUB-AU) released a market update for the first quarter ended 30 September 2019, announcing funds under administration (FUA) of $14.4b, an increase of $1.5b or 12% for the quarter. On an annual basis, FUA increased by $5.2b or +57%. Net inflows were up 26% to $1.2b for the quarter and on an annual basis increased 94% or $600m. In addition, 80 new advisors were introduced to the platform increasing the company’s advisor base by 29% to 1,705 advisors for the year. Furthermore, the company also signed 22 new licensee agreements, with Paragem successfully completing the onboarding of 11 new practices. At the industry level, the latest Strategic Insights quarterly platform market update revealed the HUB-AU continues to be one of the fastest growing platforms, increasing its market share to 1.5% as at 30 June 2019 and ranked 2nd across both quarterly and annual net inflows.

Netwealth Group Limited (NWL-AU) released a market update for the first quarter ended 30 September 2019, reporting funds under administration (FUA) of $25.3b, an increase of $2.0b or 9% for the quarter. On an annual basis, FUA increased by $6.0b or +31%. Additionally, the company’s funds under management (FUM) increased by $496m or +13% to $4.4b during the quarter. Annually, FUM has grown by $1.4b or +44%. NWL-AU’s platform member accounts also achieved strong growth, increasing by 8,840 accounts or +14% to 72,711 member accounts as at 30 September 2019. Based on the latest Strategic Insights quarterly platform market update, NWL-AU increased its market share to 2.6% and achieved the highest quarterly and annual platform flows to June 2019, achieving net flows of +$1.5b and +$4.3b, respectively.

ResMed Inc. (RMD-AU) released its results for the first quarter ended 30 September 2019, reporting revenue growth of 16% to $681m, gross profit margin expansion of 115bps to 59.5% and net profit growth of 14% to $120m. Geographically, revenue in the U.S., Canada and Latin America, excluding Software as a Service (SaaS), increased by 13% to $370m, driven by Mask sales which grew by 19% following new product releases. Revenue in the combined Europe, Asia and other markets increased by 4% to $224m, driven by Mask sales growth of 15% in the region. SaaS revenue increased 83% to $87m, due to continued growth in Brightree service offerings and incremental contributions from the recently acquired MatrixCare. Overall, the achieved margin expansion was predominantly due to manufacturing and procurement efficiencies, the MatrixCare acquisition and a favourable product mix.

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 31st October 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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