Pendal Smaller Companies aims to provide a return (before fees, costs and taxes) that exceeds the S&P/ASX Small Ordinaries (TR) Index over the medium to long term. This Fund is designed for investors who want the potential for long term capital growth and tax effective income, diversification across a broad range of smaller companies and industries and are prepared to accept higher variability of returns.
This Fund is designed for investors who want the potential for long term capital growth and tax effective income, diversification across a broad range of smaller companies and industries and are prepared to accept higher variability of returns. The Fund invests primarily in companies outside the top 100 listed on the Australian Securities Exchange. The Fund may also invest in equivalent companies listed on the New Zealand Stock Exchange, hold cash and may use derivatives.
Pendal’s investment process for Australian shares is based on our core investment style and aims to add value through active stock selection and fundamental company research. Pendal’s core investment style is to select stocks based on our assessment of their long term worth and ability to outperform the market, without being restricted by a growth or value bias. Our fundamental company research focuses on valuation, franchise, management quality and risk factors (both financial and non-financial risk).
The Fund may have assets denominated in foreign currencies. This means that changes in the value of the Australian dollar relative to foreign currencies may affect the value of the assets of the Fund. The Fund’s foreign currency exposure may be hedged from time to time, in whole or part.
Derivatives may be used to reduce risk and can act as a hedge against adverse movements in a particular market and/or in the underlying assets. Derivatives can also be used to gain exposure to assets and markets.
What is Pendal Smaller Companies Pendal Smaller Companies is an Managed Funds investment product that is benchmarked against ASX Index Small Ordinaries Index and sits inside the Domestic Equity - Micro Cap 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 Pendal Smaller Companies has Assets Under Management of 321.19 M with a management fee of 1.22%, a performance fee of 0.00% 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 Pendal Smaller Companies has returned 3.44% in the last month. The previous three years have returned 5.44% annualised and 16.64% each year since inception, which is when the Pendal Smaller 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 Pendal Smaller Companies first started, the Sharpe ratio is NA with an annualised volatility of 16.64%. The maximum drawdown of the investment product in the last 12 months is -4.5% and -54.49% 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 Pendal Smaller Companies has a 12-month excess return when compared to the Domestic Equity - Micro Cap Index of 4.38% and -0.67% 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. Pendal Smaller Companies has produced Alpha over the Domestic Equity - Micro Cap 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 Domestic Equity - Micro Cap Index category, you can click here for the Peer Investment Report.
What level of diversification will Pendal Smaller Companies provide?
Pendal Smaller Companies has a correlation coefficient of 0.97 and a beta of 0.96 when compared to the Domestic Equity - Micro Cap 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 Pendal Smaller Companies and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Pendal Smaller Companies with the ASX Index Small Ordinaries Index?
For a full quantitative report on Pendal Smaller Companies compared to the ASX Index Small Ordinaries Index, you can click here.
Can I sort and compare the Pendal Smaller Companies to do my own analysis?
To sort and compare the Pendal Smaller Companies financial metrics, please refer to the table above.
Has the Pendal Smaller 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 Pendal Smaller Companies?
How do I get in contact with the Pendal Smaller Companies?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Pendal Smaller Companies. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - December 31, 2022 The Pendal Smaller Companies Fund (Fund) is an actively managed portfolio investing in companies outside the top 100 listed on the Australian Stock Exchange and their equivalent on the New Zealand Stock Exchange that we believe are trading below their assessed valuation, and which we expect to grow their profits quickly.
This Fund is designed for investors who want the potential for long term capital growth and tax effective income, diversification across a broad range of smaller companies and industries and are prepared to accept higher variability of returns. The Fund invests primarily in companies outside the top 100 listed on the Australian Securities Exchange. The Fund may also invest in equivalent companies listed on the New Zealand Stock Exchange, hold cash and may use derivatives.
Performance Commentary - June 30, 2022 This Fund is designed for investors who want the potential for long term capital growth and tax effective income, diversification across a broad range of smaller companies and industries and are prepared to accept higher variability of returns. The Fund invests primarily in companies outside the top 100 listed on the Australian Securities Exchange. The Fund may also invest in equivalent companies listed on the New Zealand Stock Exchange, hold cash and may use derivatives. Pendal’s investment process for Australian shares is based on our core investment style and aims to add value through active stock selection and fundamental company research.
Pendal’s core investment style is to select stocks based on our assessment of their long term worth and ability to outperform the market, without being restricted by a growth or value bias. Our fundamental company research focuses on valuation, franchise, management quality and risk factors (both financial and non-financial risk).
The Fund may have assets denominated in foreign currencies. This means that changes in the value of the Australian dollar relative to foreign currencies may affect the value of the assets of the Fund. The Fund’s foreign currency exposure may be hedged from time to time, in whole or part.
Performance Commentary - April 30, 2021 This Fund is designed for investors who want the potential for long term capital growth and tax effective income, diversification across a broad range of smaller companies and industries and are prepared to accept higher variability of returns. The Fund invests primarily in companies outside the top 100 listed on the Australian Securities Exchange. The Fund may also invest in equivalent companies listed on the New Zealand Stock Exchange, hold cash and may use derivatives.
Pendal’s investment process for Australian shares is based on our core investment style and aims to add value through active stock selection and fundamental company research. Pendal’s core investment style is to select stocks based on our assessment of their long term worth and ability to outperform the market, without being restricted by a growth or value bias. Our fundamental company research focuses on valuation, franchise, management quality and risk factors (both financial and non-financial risk).
Performance Commentary - December 31, 2020 The Fund outperformed the benchmark over the September quarter.
Contributors
Overweight Reece (REH)
Plumbing supplies company Reece (REH) delivered a strong set of results despite a challenging year. For the year ending 30 June, REH saw sales revenue grow by only 1% across Australia and New Zealand, given the combined impact of the bushfires and COvid-19. However this was more than offset by 20% revenue growth in the US, which saw Group growth in revenue of 10%. Net profit after tax grew 19%.
Overweight Adairs (ADH)
Homewares company Adairs also delivered a strong result during the quarter, demonstrating resilience in the face of the challenge from Covid. In-store sales fell -7.3% for the year following a five week store closure. However a 110.5% surge in online sales saw total group sales grow 12.9%. Underlying earnings before interest and tax grew 39.7% for the year.
Detractors
Underweight Pointsbet (PBH)
Cloud-based corporate book maker Pointsbet surged after announcing a five year deal to become the official sports betting partner of NBC Sport in the US. There is a position in the portfolio, however it was lower than the index, which dragged on the portfolio’s relative performance.
Overweight Technology One (TNE)
Technology One had a volatile quarter after the release of a research report from a short-selling firm based in Hong Kong. In our view, key issues raised in the report around some accounting outcomes were backward looking, already addressed and reasonably well known. They largely pertain to the company’s shift from a perpetual license to recurring license fee model. We maintain conviction in the company’s continued underlying business success and competitive advantage as a first mover in fully fledged cloud enterprise software solutions.
We continue to believe further value will be unlocked as transitional accounting runs its natural course and investors increasingly see a pure SaaS/(recurring) business clearly emerge in both business and financial accounting terms.
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