Intermede Global Equities Fund aims to deliver a return that exceeds the Benchmark (before fees) over 7 year periods. Intermede engages in intensive research to identify investment opportunities in mid and large capitalisation companies and across developed and emerging markets.
We initiated a position in Inditex late in September. Inditex is the leading global apparel firm outside of the sporting goods space. The company has 5,700 stores across 93 countries with 73% of sales from the Zara brand. The company has long been widely appreciated for its unique business model which is based on a rapidly refreshed product assortment supported by a highly responsive and proximate supply chain. Inditex was initially slow to embrace ecommerce but shifted strategy around 2016, and in 2022 ecommerce accounted for 24% of sales with profitability commensurate with physical stores. After a long period of heavy investment in its ecommerce capabilities and a rationalisation of the store base, we view the company as well positioned to grow at a sustained pace with room for expansion in Northern Europe, the Middle East and the US.
There were no fully closed position during the period.
What is Intermede Global Equities Fund Intermede Global Equities Fund is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Fundamental Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Intermede Global Equities Fund has Assets Under Management of 512.63 M with a management fee of 0.99%, a performance fee of 0.00% and a buy/sell spread fee of 0.1%.
How has the investment product performed recently? The recent investment performance of the investment product shows that the Intermede Global Equities Fund has returned -0.19% in the last month. The previous three years have returned 4.4% annualised and 11.26% each year since inception, which is when the Intermede Global Equities Fund first started.
How is risk measured in this investment product? There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Intermede Global Equities Fund first started, the Sharpe ratio is NA with an annualised volatility of 11.26%. The maximum drawdown of the investment product in the last 12 months is -3.58% and -22.85% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product? Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Intermede Global Equities Fund has a 12-month excess return when compared to the Foreign Equity - Large Fundamental Index of -0.75% and 0.66% since inception.
Does the investment product produce Alpha over its Peers? Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Intermede Global Equities Fund has produced Alpha over the Foreign Equity - Large Fundamental Index of NA% in the last 12 months and NA% since inception.
What are similar investment products? For a full list of investment products in the Foreign Equity - Large Fundamental Index category, you can click here for the Peer Investment Report.
What level of diversification will Intermede Global Equities Fund provide? Intermede Global Equities Fund has a correlation coefficient of 0.95 and a beta of 0.83 when compared to the Foreign Equity - Large Fundamental Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers? For a full quantitative report on Intermede Global Equities Fund and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Intermede Global Equities Fund with the Developed -World Index? For a full quantitative report on Intermede Global Equities Fund compared to the Developed -World Index, you can click here.
Can I sort and compare the Intermede Global Equities Fund to do my own analysis? To sort and compare the Intermede Global Equities Fund financial metrics, please refer to the table above.
Has the Intermede Global Equities Fund been independently verified by SMSF Mate? This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
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Performance Commentary - August 31, 2023 There were no newly opened or fully closed positions in the period.
Performance Commentary - July 31, 2023 We closed our position in Disney in July. We closed our position in Disney during the period after taking a more negative overall view on the direction and economics of the company’s transition from linear TV to content delivered increasingly through Disney+, the company’s OTT streaming service launched in late 2019. While the early magnitude of Disney+ success was accretive to revenue as the pandemic accelerated streaming adoption, we have developed a more negative long-term view regarding the terminal profitability of this business, particularly relative to the company’s Linear Networks segment, its largest profit pool. While we continue to recognize the powerful network effects of streaming in combination with Disney’s experiences and Parks business, we have decided to close our position as we view more attractive long-term opportunities in the media and entertainment space.
Performance Commentary - June 30, 2023 We opened a new position in Universal in June and fully closed our position in Dollar Tree.
We opened a new position in Universal Music Group, UMG, in June. UMG is the largest music entertainment company in the world with more than 30% market share. While the history of the music industry has seen volatility, the current secular shift toward streaming and digital technologies is reinvigorating growth, which creates new opportunities for artists and music companies to monetise on increasing consumption. In an increasingly competitive entertainment environment, we believe music’s uniquely enduring and long-lasting popularity will drive compounding value over the longterm, and UMG is the best positioned company to capitalise on those trends.
We closed the position in Dollar Tree late in the quarter after holding the name since early 2021. The initial benefits of the move away from the single price of $1 at the Dollar Tree banner have been realised. We increasingly believe that management’s attention is too focussed on Family Dollar, the chain acquired in 2013, which has been a major drag on the business for most of the time since. While a turnaround would certainly be accretive to earnings, if this comes at the expense of performance at the much higher margin Dollar Tree banner, the overall result would not be positive.
After attending the company’s investor day we see an increased risk that the Dollar Tree banner may not be getting the attention it needs.
Performance Commentary - May 31, 2023 There were no newly opened or fully closed positions in May.
Performance Commentary - April 30, 2023 There were no newly opened or fully closed positions in April.
Performance Commentary - February 28, 2023 There were no newly opened or fully closed positions in February.
Performance Commentary - January 31, 2023 We opened one new position Equifax in January.
In January, we initiated an investment in Equifax, a leading consumer data and analytics provider. Equifax is one of three global credit bureaus, an oligopolistic industry with high barriers to entry benefitting from secular demand trends for increased data, analytics and insights. Equifax also has a differentiated employment data asset, with a monopoly type competitive position and significant growth opportunities through penetration, pricing, product enhancements and new verticals/use cases. Following the well-publicised data breach in 2017, an impressive new management team has been installed who have spent $1.5bn upgrading to a best in class, fully cloud native technology system, which improves security, reduces costs and accelerates product development, in addition to a well executed bolt-on M&A to enhance existing offerings and add faster growing verticals. We have been following Equifax for several years but have been waiting to enter at the optimal point in the US mortgage market cycle, with 20-30% of group revenues sensitive to origination volumes. We were reluctant to invest during the temporary boom driven by falling rates post covid, since this appeared to be over-extrapolated, and then held back last year amid uncertainty regarding where and when the mortgage market would bottom, as rates moved up significantly. With mortgage rates now seeming to have peaked, origination volumes appear likely to trough in the coming quarters, leading us to initiate our investment at an attractive price ahead of a likely acceleration in revenue growth.
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