Lazard Australian Equity W (LAZ0010AU) Report & Performance

What is the Lazard Australian Equity W fund?

The Lazard Australian Equity Fund takes large active positions, holding generally 25 to 45 securities chosen for their potential to deliver absolute returns over the long term. It is a high conviction portfolio but key benchmark risks are also taken into consideration when constructing the portfolio. The Fund’s objective is to achieve total returns (including income and capital appreciation and before the deduction of fees and taxes) that exceed those of the S&P/ASX 200 Accumulation Index by 3% per annum over rolling three-year periods.

  • Risk Aware: Focus on benchmark and absolute risk
  • Disciplined: ‘Value’ Investment Approach Longer-term independent thinking
  • Stability and Experience: Team together at Lazard for more than 18 Years

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For Lazard Australian Equity W

Lazard Australian Equity W Fund Commentary September 30, 2023

Australian equities fell through September 2023, as investors took a cautious stance during a period where the Australian 10-year bond yields reached the strongest levels since October 2011. The S&P/ASX 200 outperformed the Developed World performance, with a fall of -2.8% in September, while the S&P 500 also fell -4.8% in local currency terms. For the quarter ending September 2023, the S&P/ASX 200 ended down -0.8%. On a sector basis, Energy, Financials, and Consumer Staples outperformed in Australia, and Health Care, IT, and REITs sectors were the relative worst performers during the month. During the quarter ended September 2023, the Lazard Australian Equity Fund returned 1.4% (net of W Class fees), outperforming the S&P/ASX 200 Accumulation Index which declined -0.8%.

Contributors to Performance

• Monadelphous (MND) was a contributor to portfolio performance over the current quarter. The company announced several major construction contract awards in the lithium and iron ore segment, bringing the value of secured contracts since the start of FY23 to nearly A$1bn with over half of this post balance date. Monadelphous Managing Director, Zoran Bebic, stated that these contracts represented the first in a new wave of major construction projects to come to market. We continue to remain shareholders in MND, with the view that the medium-term earnings power of the company is higher than its current share price valuations.

• Costa Group’s (CGC) shares performed strongly during Q3 2023, rising around 15% after the board entered a Scheme of Arrangement with Paine Partners for the sale of the company at a price of A$3.20 per share. This price was disappointingly lower than the A$3.50 level discussed few months earlier before CGC’s most recent earnings downgrade.

Detractors from Performance

• Despite reporting results and guidance in-line with market expectations, Waypoint REIT’s (WPR) underperformance accelerated over Q3 2023 as bond yields rose. The ‘higher for longer’ thesis for bond yields placed pressure on the broader REIT sector, with the key implications being negative asset revaluations and rising debt costs. WPR is relatively well-positioned, with full-year CY23 earnings guidance unchanged being flat versus the prior year, with ~3% rent growth offset by the full-year impact of prior asset sales and higher cost of debt. The balance sheet remains strong with gearing at the low end of the 30-40% target range and 93% hedging for FY24, providing significant headroom. We are still awaiting the competition regulator ACCC’s adjudication of main tenant Viva Energy’s (VEA) acquisition of On the Run (OTR). This will determine VEA’s rollout of the OTR format across the store network, which could be partially funded by WPR and provide redevelopment returns. WPR currently trades at a 7.3% dividend yield and 25% discount to net tangible assets, providing a good valuation support.

• Healius (HLS) was subject to a conditional non-binding offer from another pathology services operator to acquire the company in March 2023, which offered some support to the shares in recent months. However, the stock underperformed the market in Q3 2023 in anticipation and later release of the ACCC’s preliminary finding that the acquisition would likely substantially lessen competition in Australian pathology services. This highlighted that the proposed offer might need to be revised before it is considered again. At current levels, we believe there is still value in the stock as we believe the market is not yet fully appreciating the recovery in diagnostics volumes and the company’s refocusing initiatives.

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Performance Review

Fund Name Last Month
? Returns after fees in the most recent (last) month).
3 Months Return
? Returns after fees in the most recent 3 months.
1 Year Return
? Trailing 12 month returns.
3 Years Average Return
? Average Annual returns from the last 3 years.
Since Inc. Average Return
? Average (annualised) returns since inception
1 Year Std. Dev. (Annual)
? The standard deviation (or annual volatility) of the last 12 months.
3 Years Std. Dev. (Annual)
? The average standard deviation (or annual volatility) from the last 3 years.
Since Inc. Std. Dev. (Annual)
? The average standard deviation (or annual volatility) since the fund inception.
1 Year Max Drawdown
? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
3 Year Max Drawdown
? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Since Inc. Max Drawdown
? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Lazard Australian Equity W4.83%5.43%9.23%8.88%7.6%9.99%12.2%13.86%-4.84%-7.86%-55.27%

Product Overview

Peer Comparison

Product Details

Product Due Diligence

What is Lazard Australian Equity W

Lazard Australian Equity W is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Large Value 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 Lazard Australian Equity W has Assets Under Management of 91.29 M with a management fee of 0.82%, a performance fee of 0.00% and a buy/sell spread fee of 0.4%.

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Historical Performance Commentary

Performance Commentary - August 31, 2023

The S&P/ASX 200 outperformed the Developed World markets performance, falling -0.7% in August 2023. Weakness in Australian equities was mainly on the back of dull guidance from companies through the earnings season. The Australian 10-year bond yields sold off by 2bps to 4.03%, trading relatively unchanged as the Reserve Bank of Australia (RBA) remained unmoved on the cash rate, however still retained a tightening bias. On a sector basis, Consumer Discretionary, REITs, and Energy outperformed, while Utilities and Consumer Staples sectors were the relative worst performers.

During the month ended August 2023, the Lazard Australian Equity Fund returned -1.5% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned -0.7%.

Contributors to Performance

• Bapcor (BAP) announced their results on August 16, 2023 which were in-line with expectations. BAP shares rose 6% over the month, outperforming the ASX200 which declined in August as the market had concerns that BAP may be impacted by the slowing consumer demand in Australia. The largest value driver for BAP remains the ‘Better Than Before’ program, for which management has announced aggressive cost saving targets. If these are mostly realized, we believe there might be a meaningful upside for BAP shares. We remain attracted to BAP’s resilient top line and rational competitive dynamics in key markets with minimal ‘Better Than Before’ upside included in our valuation. We continue to hold BAP shares.

• Ridley (RIC) posted another solid result in August with NPAT increasing 15.5% for FY23. The shares were weak in the last quarter of the financial year as the market was concerned that weaker tallow pricing would derail the company’s earnings growth. We used this share price weakness to add to our RIC positions. While commodity price tailwinds have undoubtedly assisted in previous periods, RIC has numerous growth drivers to depend on, as detailed in management’s “Growth Plan 2” initiative. Confirmation of these growth options across the stockfeed, packaged products and rendering business units saw the shares rise through August and outperform the broader index. We continue to hold RIC shares as we believe that the market is factoring in less than the full upside we believe “Growth Plan 2” provides.

Detractors from Performance

• Towards the end of August 2023, Costa Group (CGC) reported a very disappointing earnings downgrade, with a deterioration in the quality of the citrus harvest. The shares fell 14% as the market was concerned the downgrade could impact the indicative takeover offer Paine Partners made to the CGC board for $3.50 per share from progressing to a binding acquisition proposal. We expect an update on the status of the proposal from the CGC board in mid-late September 2023.

• South32 (S32) underperformed the market in August 2023 as concerns about a slower than expected Chinese economic recovery continued to weigh on sentiment. S32 reported its FY23 result during the month, and while it was broadly in line with consensus, we believe the guidance for FY24 was disappointing. Costs guidance was significantly higher than expected and production growth guidance was also soft. While S32 is investing in growth, these benefits won’t be seen until post FY25. S32 continues to transform its portfolio with 71% of FY23 revenue related to base metals, up from 45% when the business was demerged from BHP almost 10 years ago. In our view, S32 is well positioned to benefit from the significant energy transition demand for base metals in the medium to long term. Despite some near-term headwinds we continue to see S32 as attractively priced.

Performance Commentary - July 31, 2023

Performance Commentary - June 30, 2023

Performance Commentary - May 31, 2023

Performance Commentary - April 30, 2023

Performance Commentary - March 31, 2023

Performance Commentary - February 28, 2023

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