Solaris Core Australian Equity Retail is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Large Cap Neutral 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 Solaris Core Australian Equity Retail has Assets Under Management of 772.06 M with a management fee of 0.9%, a performance fee of 0 and a buy/sell spread fee of 0.6%.
The S&P/ASX 200 Accumulation index delivered -0.7% in August outperforming global markets which also delivered negative absolute returns with the S&P500 returning -1.8% and the MSCI World down -1.7%.
August reporting season saw 162 companies deliver results and brought a marked increase in intraday volatility and dispersion between winners and losers. The broader economy has demonstrated resilience as revenue has marginally exceeded expectations however there has been margin compression resulting from headwinds such as labour costs, interest costs, and higher inflation throughout businesses.
The Reserve Bank of Australia (RBA) elected to keep rates on pause and so the cash rate remains at 4.1% Against a backdrop where earnings downgrades outnumbered upgrades, 8 out of 11 sectors posted negative returns for the month.
Consumer Discretionary (+5.7%), Property (+1.6%) and Energy (+0.5%) were the best performers. Utilities (-3.8%), Consumer Staples (-3.2%) and Information Technology (-2.1%), were the worst performing sectors.
The top three performers included Altium (+26.7%) as the company delivered a strong FY23 result and reiterated aspirational 2026 targets, demonstrating that their strategy is working; Inghams Group (+24.3%) as the poultry farmer’s FY23 and future guidance exceeded the market’s expectations and G.U.D Holdings (+24.0%) as the car product distributor reported results showing a 32% increase in Net Profit after Tax and Amortisation.
The worst performers were Chalice Mining (-39.6%) as the share price of the mineral explorer reacted to the announcement of a disappointing mine scoping study; Iress (-38.3%), the financial services software provider delivered a disappointing result and cut their dividend and Core Lithium (-38.3%) as the Lithium explorer reached 12 months lows after undertaking a capital raising during the month.
A portfolio holding in focus is Altium, which is of one of our preferred holdings in the Software & Services sector.
Altium is a global provider of software for Electronic Computer Aided Design, in addition to Parts listing platform, Octopart. Altium delivered a solid FY23 result showing the broader business is performing well. The management team have been successful in executing on their strategy of converting customers from Standalone to Term and SAS based licensing and breaking into the Enterprise customer segment due to their Cloud platform offering.
Solaris continues to see opportunity and growth in Altium, supported by the announcement of multiple Enterprise customers including a significant exclusive deal with Japanese Semiconductor company Renesas.
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