NZ Model Portfolio
Portfolio return QTD — gross — 2.06% vs NZX50 benchmark 0.13%.
Note all returns are gross of any management fees or administration fees or other associated costs. Eventually we will have a very pretty sheet to show you but let’s bow down to Microsoft Excel for now. Namaste, Bill Gates.
Commentary — During the quarter we sold the bulk of our Rakon position and added to EBOS, NZX, THL. We entered into new positions on Arvida and AoFrio. We sold the bulk of our ATM position (a little too soon, probably!) and exited Pacific Edge and Fletcher Building. We don’t intend on making many more changes over the quarter. We think Arvida is undervalued (its NTA is $2.00 and it trades at $1.10) while we think the NZX is continuously undervalued. We took a small position in AoFrio — read our reasoning here or on BusinessDesk here.
Australian Model Portfolio
Portfolio return QTD — gross — 4.98% vs ASX200 benchmark 0.73%.
During the quarter we sold out of De.mem and AV1. We added Aroa Biosurgery, Droneshield Limited, Dominos Pizza, and added to Lynas and URNM. We sold a little Elders. We continue to see potential in the Australian market, especially in the smaller caps and “oversold” stories like Dominos.
Global Model Portfolio
Portfolio return QTD — gross — 5.87% vs Vanguard All-World FTSE benchmark 2.74% (currency helped us out here — by about ~2% — so don’t think we are some kind of magicians. It’s early in the quarter).
We bought Brunello Cucinelli — a new position. We bought more CDI (more or less a proxy for LVMH), some more Booking.com. We bought a small position in Snapchat viewing it as oversold and we think the benefits of slashing workforce are yet to be seen. We took a very small position in Hipgnosis Songs Fund, as we expect the fund will be “wound up” at some point and trades at a discount to the value of its music catalogue, even with a steep discount for its assets. We sold a little Schwab and continued to trim our Estee Lauder and Manchester United positions, which haven’t performed as we hoped. We also trimmed DG. Obvious winners this quarter so far are Brunello — the co had a stellar year — as well as Bolloré, which owns positions in UMG and various other high-quality assets. Paramount continues to be a disappointment, and we hope Shari sells the thing soon. LVMH continues to be a winner, while Suntory is the one drinks company that has done us good — the cheap yen and high-quality portfolio make it appealing. Diageo continues to do a “little” better but we are still down on the position overall (but only about ~2% now). Last year we did a lot of pruning and will continue to do so until we’re happy with where the portfolio is at — we probably sold tech too early (at the end of last quarter – d’oh!) but we’re value investors at heart — sorry, growth stocks.
International Concentrated
Our “best” ideas portfolio. 4.31% vs our benchmark, the FTSE All-World index — 2.74%. Returns are of course gross of fees, etc etc. This is our newest portfolio, only established last quarter. Portfolio inception was 4 Dec 2023 so don’t get too excited. DGL the clear winner — well done Simon — but only a 1.02% weighting! Your portfolio manager should’ve risked a little more! Richemont has done well too (we are waiting for a good entry point to shed some of the rest of DG and MANU and add that to the Global Model Portfolio). Catapult has been a little bit of a disappointment so far while the others continue to trudge along. We don’t expect to make any major changes to the portfolio composition.
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