Talk to a product specialist - 02 9009 2900

DEEP VALUE FUND

MONTHLY PERFORMANCE AS AT 31/08/2021

mam-logo-final-resized

Latest unit price

$5.1202

Return since inception (March 2009)

856.88%

Return 1 month

5.96%

MARKET UPDATE AND COMMENTARY - DVF 08-21

Projected EPS Growth
1 Year Forward
(on a weighted basis)
+28.2%

Projected EPS Growth
2 Year Forward
(on a weighted basis)
+24.9%

Number of companies
34

Top 5 Holdings
% of NAV

38.6%

Top 20 Holdings
% of NAV

85.3%

Top 10 Holdings
% of NAV

59.4%

Cash Position
% of NAV

0.8%

MARKET UPDATE AND COMMENTARY

The US Federal Reserve gave its strongest signal that it is likely to begin tapering its massive bond-buying program after acknowledging it had met two of its key goals required to unwind it. The Federal Reserve chairman recognised the US economy had made clear progress towards achieving full employment, and inflation had gathered pace sufficiently to warrant the removal of bond buying.The US Federal Reserve has been buying $120b USD of bond securities each month since July 2020, the biggest quantitative easing programme in the history of economics. Whilst there appears to be a clear consensus amongst US Federal Treasury members about the cessation of the bond-buying programme, the exact timeline remains unclear. However, we believe it is likely to happen towards the end of 2021.

Domestically, Australia’s most populated states, NSW and Victoria, remain in a prolonged lockdown that will have distortive economic effects for the 1H22 period; however, we expect a difference of two halves. Unwinding the lockdowns towards the end of October with resultant pent-up demand will resurge economic conditions in the last two months of this half.

Microequities Deep Value Fund returned 5.96% in August. With this, our fund managers brought in a total return net of fees to 856.88% for the Fund since inception in March 2009.

The FY21 earnings season demonstrated the growth qualities of both the asset class and portfolio of companies in our Deep Value Fund. The earnings season provided strong validation that smaller companies will outgrow larger companies and continue to do so for more extended periods. This data shows that they are investment options worth exploring.

The 27.6% represents one of the portfolio’s highest average EPS weighted growth performances. As pleasing as that is, investment management is a future-looking business. As we look at the runway of growth for FY22 and FY23, we are pleased to report that we are forecasting strong double-digit weighted EPS growth for the portfolio. We believe our investment strategy behind the EPS growth of the portfolio is an important driver and leads to the long term return profiles of all our investment funds.

Important information: This information is not intended to be financial advice. Past performance is not indicative of future performance. Microequities Asset Management Pty Ltd is a corporate authorised representative, number 462438, appointed by Microequities Asset Management Group Limited, holder of AFSL number 287526. Application for units in the Fund is limited to wholesale or sophisticated investors within the meaning of Section 761G(7) and 761GA(7) of the Corporations Act 2001.

Important information: This information is not intended to be financial advice. Past performance is not indicative of future performance. Microequities Asset Management Pty Ltd is a corporate authorised representative, number 462438, as appointed by Microequities Asset Management Group Limited holder of AFSL number 287526. Application for units in the Fund is limited to investors that are wholesale or sophisticated investors within the meaning of Section 761G(7) and 761GA(7) of the Corporations Act 2001.