PM Capital Global Companies aims to provide long-term capital growth and outperform the greater of the MSCI World Net Total Return Index (AUD) or RBA cash rate over rolling seven year periods. The Fund is not intended to replicate the index. The Fund is a concentrated portfolio, with its listed equity component typically holding 25 to 45 securities, when fully invested, diversified across global equity markets. Old fashioned stock pickers – fundamental, bottom-up research intensive approach. The investment process is built around the simple principle that the best way to preserve and enhance your wealth over the longer term is to “buy a good business at a good price”.
• Positive contributors to performance for the month of September included our commodity holdings CNOOC, Arch Resources, Stanmore Resources, and Teck Resources.
• Detractors to monthly performance included Wynn Resorts, ING Groep, and Star Entertainment.
• No new positions were initiated during August, however additional purchases were made in Grupo Mexico and Charles Schwab Corp. We also took up our allocation in Star Entertainment’s rights issue, increasing the position size.
• No positions were exited during the period, however we trimmed our position in JP Morgan.
• The gross invested position at month’s end closed at 102%, with a net equity position of 88%
What is PM Capital Global Companies PM Capital Global Companies is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Long Short 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 PM Capital Global Companies has Assets Under Management of 398.77 M with a management fee of 1.09%, a performance fee of 0 and a buy/sell spread fee of 0.5%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the PM Capital Global Companies has returned 2.3% in the last month. The previous three years have returned 18.18% annualised and 18.75% each year since inception, which is when the PM Capital Global Companies 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 PM Capital Global Companies first started, the Sharpe ratio is NA with an annualised volatility of 18.75%. The maximum drawdown of the investment product in the last 12 months is -6.06% and -62.28% 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 PM Capital Global Companies has a 12-month excess return when compared to the Foreign Equity - Long Short Index of 10.42% and -0.16% 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. PM Capital Global Companies has produced Alpha over the Foreign Equity - Long Short 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 - Long Short Index category, you can click here for the Peer Investment Report.
What level of diversification will PM Capital Global Companies provide?
PM Capital Global Companies has a correlation coefficient of 0.83 and a beta of 1.22 when compared to the Foreign Equity - Long Short 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 PM Capital Global Companies and its peer investments, you can click here for the Peer Investment Report.
How do I compare the PM Capital Global Companies with the Developed -World Index?
For a full quantitative report on PM Capital Global Companies compared to the Developed -World Index, you can click here.
Can I sort and compare the PM Capital Global Companies to do my own analysis?
To sort and compare the PM Capital Global Companies financial metrics, please refer to the table above.
Has the PM Capital Global Companies 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.
How can I invest in PM Capital Global Companies?
How do I get in contact with the PM Capital Global Companies?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the PM Capital Global Companies. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - August 31, 2023 • Positive contributors to performance for the month of August included Apollo Global Management, CNOOC, Shell plc, ING Group and Arch Resources.
• Detractors to monthly performance included Bank of America, Siemens AG, Wells Fargo, Freeport McMoRan and Sands China.
• Currency positioning also had a negative impact on performance relative to the MSCI Global (AUD). The Fund’s currency positioning is actively managed and at the end of August the three largest currency exposures were Australian Dollar (83%), British Pound (8%) and Hong Kong Dollar (6%). In August the Australian Dollar declined ~4% against the US Dollar which accounts for almost 70% of the MSCI World Index.
• No new positions were initiated during August, however additional purchases were made in Heineken Holdings as well as recently initiated Grupo Mexico.
• No positions were exited during the period however out of the money call options were sold on Apollo Asset Management reducing our effective position and providing an exit point in the event of a further increase in the share price.
• The gross invested position at month’s end closed at 106%, with a net equity position of 94%.
Performance Commentary - July 31, 2023 • Positive contributors to performance for the month of July included Bank of America, CNOOC Limited, ING Group, Apollo Global Management and Teck Resources.
• Detractors to monthly performance included CaxiaBank, Cairn Homes, Heineken Holdings, SPIE and Star Entertainment.
• Two new positions were initiated during July, Grupo Mexico and Arch Resources. Both positions add to the portfolio’s commodity position. Grupo Mexico is a holding company with two main businesses, a majority 90% stake in Southern Copper and a 70% stake in Grupo Mexico Transportes, the largest freight rail operator in Mexico. Arch Resources is a metallurgical coal producer operating in the Appalachian region of the United States.
• No positions were exited during the period however out of the money call options were sold on Freeport McMoRan reducing our effective position and providing an exit point in the event of a further increase in the share price.
• The gross invested position at month’s end closed at 106%, with a net equity position of 93%.
Performance Commentary - June 30, 2023 • Positive contributors to performance over the month of June included Apollo Global Management, Freeport McMoRan, Teck Resources, ING Group and CaxiaBank.
• Detractors to monthly performance included Apple (short), Lloyds Banking Group, McDonalds (short), Siemens and Aalberts.
• There were no new positions initiated during June, however the Fund completed the purchase of an initial position in European industrials company Aalberts, which was initiated in May. The Fund’s existing position Bank of America was increased.
• Oracle was exited during the period after the recent strong performance saw the share price reach our target. Weightings in Teck Resources and Siemens were reduced.
• The gross invested position at month’s end closed at 106%, with a net equity position of 94%
Performance Commentary - May 31, 2023 The portfolio returned -3.3% over the month whilst the MSCI Word Net Total Return Index (AUD) returned 1.1%.
• Positive contributors to monthly performance included Apollo Global Management, Applus Services, Glenveagh Properties, Oracle Corporation and ING Groep.
• Detractors to monthly performance included Teck Resources, Wynn Resorts, Shell, MGM China and CNOOC Limited.
• We added new positions in Intesa Sanpaolo, Charles Schwab Corp and a European industrials company which will be disclosed during the upcoming quarterly once completed.
• Positions in MGM China and Stanmore Resources were increased.
• No positions were exited during the period.
• The gross invested position at month’s end closed at 103%, with a net equity position of 96%.
Performance Commentary - April 30, 2023 Teck Resources, the portfolio’s largest commodities position, rose materially after disclosing the receipt of a merger proposal from Glencore. Interest in Teck Resources has been triggered by the company’s February announcement that it would look to separate its industrial metals and steelmaking coal businesses. We have been vocal in our opposition to Teck’s proposed separation, and we were pleased to see the shareholder vote was withdrawn from its recent AGM after it became clear the company did not have the requisite support.
We continue to believe Teck’s assets are being undervalued by the market and Glencore’s interest supports this view. Flutter Entertainment gained after the UK’s long-delayed Gaming Act Review was officially published. The review’s key recommendations were in line with what had been flagged in press reports in the weeks leading up to its release with no adverse recommendations taking investors by surprise.
The Gaming Act Review has acted as an overhang for the UK gaming sector since mid-2020 when it was initiated. It has also created an unlevel playing field between large operators like Flutter who have proactively self-regulated and smaller operators who have not. We think this benefits Flutter moving forward.
Performance Commentary - March 31, 2023 The portfolio returned 4.6% over the quarter. Our positions in European industrials and gaming were positive contributors while our US financials holdings detracted from performance.
US bank holdings were impacted by the collapse of Silicon Valley Bank and Signature Bank which sparked fear within the market and led to broad-based selling of the sector. Below we assess what happened to Silicon Valley Bank and the comparability (or lack thereof) to our US bank holdings. Silicon Valley Bank collapsed due to a mismatch in its assets and liabilities. Like at most banks (including the Australian banks), Silicon Valley’s liability book (deposits) was generally on-demand, meaning that deposit holders could withdraw their funds without notice. Their asset book was mostly longer dated fixed income securities including government-guaranteed mortgage-backed securities.
The securities carried low credit risk but were bought during the pandemic at a time of low interest rates, so were less valuable in today’s higher rate world and thus carried mark-to-market losses. The mark-tomarket losses on securities would only prove problematic if a run on deposits required Silicon Valley to liquidate the securities and realise the losses – which is what happened.
Performance Commentary - February 28, 2023 In late February diversified miner Teck Resources announced a transaction to spin-off its steelmaking coal assets into a separately listed company, leaving the core copper and zinc business in the to-be-renamed Teck Metals. Rumours circulated in the media the week before and the stock appreciated as much as 10 percent on the news. When the details were ultimately announced, the stock gave up all those gains and more. We agree with the concept of separating the assets but, like the market, not the details – for the next decade or so the newly created steelmaking coal entity will remit most of its free cash flow back to the base metals company via a complex royalty and preferred equity structure. In our view the transaction is a separation in name but not substance, and we have spoken to Teck’s management team on the issue. The transaction goes to a shareholder vote in April.
We maintain our holding in Teck Resources as its assets & earnings are strong, and its valuation remains compelling. We are conscious however that should the transaction go ahead it will be more difficult for Teck stock to achieve a full & fair valuation in the next three to five years.
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