Advance Australia Shr Multi-Blend W (ADV0045AU) Report & Performance

The Australian share market underperformed its hedged overseas counterpart over the month as the S&P/ASX300 Index returned 1.7%. The S&P/ASX 50 Accumulation Index was the strongest relative performer, returning 2.1%, while the S&P/ASX Small Ords was the weakest with a flat return over the month.

The best performing sectors were Materials (4.6%) and Financials (3.1%), while the weakest performing sectors were Healthcare (-6.4%) and Communication Services (-1.0%). The largest positive stock contributors to the index return were BHP, Fortescue Metals and CBA with absolute returns of 7.9%, 16.3% and 3.6%, respectively. In contrast, the most significant detractors were CSL, Transurban and Telstra with absolute returns of -9.4%, -3.7% and -1.1%, respectively.

The Australian share market underperformed its hedged overseas counterpart over the month as the S&P/ASX300 Index returned -2.5%. The S&P/ASX Mid 50 Accumulation Index was the strongest relative performer, generating a flat return, while the S&P/ASX Small Ords was the weakest, returning -3.3% over the month.

The best performing sectors were IT (10.4%) and Utilities (1.1%), while the weakest performing sectors were Consumer Discretionary (-6.2%) and Consumer Staples (-4.5%). The largest positive stock contributors to the index return were CSL, Woodside Energy and Xero with absolute returns of 2.0%, 2.8% and 17.8%, respectively. In contrast, the most significant detractors were NAB, BHP and Westpac with absolute returns of -9.5%, -4.6% and -7.5%, respectively

The Australian share market outperformed its hedged overseas counterpart over the month as the S&P/ASX300 Index returned 1.8%. The S&P/ASX Mid 50 Accumulation Index was the strongest relative performer, returning 3.5%, while the S&P/ASX 50 Accumulation was the weakest, returning 1.5% over the month.

The best performing sectors were Real Estate (5.2%) and IT (4.5%), while the weakest performing sectors were Materials (-2.6%) and Utilities (1.4%). The largest positive stock contributors to the index return were CSL, ANZ and NAB with absolute returns of 4.4%, 6.7% and 4.4%, respectively. In contrast, the most significant detractors were BHP, Rio Tinto and Fortescue Metals with absolute returns of -5.4%, -6.1% and -6.2%, respectively.

The Advance Australian Shares Multi-Blend Fund declined by 0.15% on a net basis in March, outperforming the S&P/ASX 300 Accumulation Index which fell by 0.24%. It was a volatile month as Australian equities were caught up in the risk asset sell-off due to the collapse of Silicon Valley Bank and fears of financial contagion. Although the end of the month saw equities rise as investors reduced their expectations for more rate rises. The more economically sensitive sectors including Real Estate and Financials led the declines.

Underlying manager performance was mixed. Platypus was the top contributor to relative performance. The manager invests in companies with underappreciated earnings growth. In addition to being supported by style tailwinds, the large overweights and stock selection in Healthcare and IT were significant contributors to outperformance. On the other side, Fidelity was the biggest detractor. The manager seeks out companies that exhibit favourable industry dynamics, competitive advantages, high quality management teams, and are likely to exceed market expectations on earnings and cash flows. Stock selection was the primary driver of underperformance over the month and was weakest in Health Care.

From a sector perspective, the underweight and stock selection in Real Estate contributed the most to outperformance. On the other side, the underweight and stock selection in the Materials sector detracted the most. At the stock level, the overweight to Northern Star Resources was the top contributor to relative performance. The underweight to Newcrest Mining was the largest detractor.

The Advance Australian Shares Multi-Blend Fund declined by 2.30% on a net basis in February, outperforming the S&P/ASX 300 Accumulation Index which fell by 2.55%. Domestic equities delivered weaker results after a strong January and underperformed global equities (2.09% as measured by the MSCI World ex AU Index). Reporting season was in focus over the month, which saw further earnings downgrades and weaker results across small caps.

At the manager level, Pendal was the top contributor to relative performance. The manager invests in companies where an anticipated change in earnings is not yet priced in by the market while also balancing thematic risks. Stock selection in the Financials sector was the largest contributor to relative performance, driven primarily by the portfolio’s insurance names. Solaris was the only detractor from relative performance. Solaris is a benchmark aware, style-neutral manager whose performance is primarily driven by stock selection. The underperformance was due to negative stock selection across the cyclical segments of the market. The underweight and negative stock selection in the Consumer Discretionary and IT detracted the most.

From a sector perspective, stock selection in the Financials sector contributed most to relative outperformance. On the other side, the underweight and stock selection in the Industrials sector detracted the most. At the stock level, the overweight to Aristocrat Leisure was the top contributor to relative performance. The overweight to Northern Star Resources was the largest detractor

The Advance Australian Shares Multi-Blend Fund returned 6.64% on a net basis in January, outperforming the S&P/ASX 300 Accumulation Index which returned 6.29%. Domestic equities performed strongly over the period outperforming global equities (2.97% as measured by the MSCI World ex AU Index). Growing optimism for a soft-landing scenario at the global level supported the outperformance of Australia’s cyclical-heavy benchmark. All sectors except Utilities delivered positive absolute returns, led by Consumer Discretionary and Materials sectors.

At the manager level, Platypus was the top contributor to relative performance. The manager invests in companies with underappreciated earnings growth, which typically results in the portfolio having a growth bias. Falling real yields over the month provided a style tailwind for the portfolio. Stock selection was positive across most sectors and was most rewarded in Financials. Realindex was the largest detractor from relative performance. The quantitative manager builds portfolios based on accounting measures representative of fundamental value independent of the benchmark. Relative underperformance was driven by weaker stock selection. This was weakest in Materials and Financials and were the largest detractors over the month.

From a sector perspective, stock selection in the Real Estate sector contributed most to relative outperformance. On the other side, stock selection in the Materials sector detracted the most. At the stock level, the overweight to Goodman Group was the top contributor to relative performance. The underweight to Pilbara was the largest detractor.