Strategy Objective: The Rivkin Australian Defensive Income Strategy aims to produce positive average annual returns while seeking to maintain a level of volatility lower than that of the S&P/ASX 200 Accumulation Index over the same investment period. The strategy focuses on income over capital growth and invests in high dividend paying blue chip stocks, hybrid securities, and takeover arbitrage.
30 June 2020 Equivalent Unit Price – A$0.9200
Welcome investors to the monthly update for the Rivkin Australian Defensive Income Strategy (RADIS) for June 2020. The portfolio posted modest gains for the month of June, with the Equivalent Unit Price (EUP) gaining 0.59% to close at 0.9200. Australian stocks in general, as measured by the ASX200 Index remain approximately 16% below the highs from February 2020, set below on the onset of the Covid-19 outbreak. Following a sharp decline into March, Australian equity prices have recovered strongly throughout April and May before momentum has stalled slightly in June.
| PORTFOLIOS | RADIS |
|---|---|
| Latest Month | 0.59% |
| QTD | 7.97% |
| Calendar YTD | -8.43% |
| Financial YTD | -10.82% |
| 12m | -10.82% |
| Inception | -8.00% |
Monthly Commentary
Before we discuss the current composition of the portfolio, we have a note regarding the end of financial year tax reporting. As all the assets are held in the individual name or entity of each investor, the tax reporting becomes relatively straight forward, particularly as we use an external software provided, Praemium, to generate tax reporting. As such, tax reports are now available by logging into your Praemium portal, however we will also email these reports out to each investor over the coming weeks.
Discussing the broader market environment, equity prices have remain largely well supported despite some concerning trends regarding the spread of Covid-19. Globally, we have seen total number of confirmed cases continue to rise, while closer to home, a large outbreak of community transmission has led to Greater Melbourne reintroducing stage 3 lockdown measures for the next six weeks. At this point, equity markets have held up quite well, however, it goes to show that the recovery out of this crisis is unlikely to be a clear V-shape, as some have optimistically suggested.
The most recent adjustment to the Blue Chip strategy, which occurred on the 1st of July has seen Qantas (QAN), Stockland (SGL), and Sydney Airports (SYD) removed from the portfolio, and replaced with Woodside Petroleum (WPL), BHP Group (BHP), and Medibank Private (MPL). The shift from travel related and real estate stocks to miners and health care, we view as an overall positive. Regarding our Blue-Chip holdings, many of the current portfolio are due to go ex-dividend throughout August and into the first week of September.
The strategy weightings below show a decent weighting to cash at 17.8%, which is partly as a result of the OMN event trade having finally being paid. This will be reinvested back into the market over the coming days and weeks. The OMN payment ended up being significantly above early guidance which was a pleasant surprise. Additionally, we saw the completion of the investment in Windlab (WND) which generated a solid, low-risk return and our investment in Zenith Energy (ZEN) proceeded towards its conclusion.
If you have any questions regarding the above or your investments with Rivkin in general, please call us on 02 8302 3605.
Performance
NAV Price Chart
Monthly Returns
Portfolio Composition
Sector Breakdown
Top 10 Stock Holdings
Strategy Weighting
Strategy Description & Information
The Rivkin Australian Defensive Income Strategy invests predominantly in listed Australian securities whose characteristics satisfy one or more of the strategies that occupy the portfolio. These strategies include: Blue Chips, being high dividend paying stocks from the ASX50, Hybrids Securities, which as the name suggests are a hybrid between a debt and equity instrument, and Events, which include opportunities such as takeover arbitrage.
Important Disclaimer
The Rivkin Australian Defensive Income Strategy is available to wholesale investors only. Past performance is not a reliable indicator of future performance. The value of your investment may rise and fall, and you may not receive the amount originally invested.
Contact
Thomas Silitonga – Director, Rivkin Asset Management
[email protected] – +612 8302 3605
