29 Apr 2019
Quarter in review
Equities and bonds across the globe posted strong returns over the quarter. This was partly due to the recovery of market sentiment from the previous quarter and the more dovish statements from reserve banks opening the door to further injections of liquidity. The New Zealand equity market was again one of the stronger performers.
The Ranger Fund posted a strong quarter but unsurprisingly lagged rampant equity markets. Most of our investments contributed positively. Afterpay Touch Group and Vista Group were the top performers, both producing positive trading statements over the quarter. Our portfolio of put options provided a small headwind to performance as general risk aversion fell.
An investment in Coventry Group was added to the portfolio. Coventry is an Australian industrial services business. It is out-of-favour with the market having suffered many years of poor performance but, in our opinion, the new management team are making the right steps to turn the business around.
5 Oceans Fund
The 5 Oceans Fund had a positive quarter as equities, both locally and globally, performed strongly. On the bond side Daintree, AMP and our direct bond holdings contributed positively while T Rowe Price was a modest negative detractor as it focused more on providing diversification to growth assets. The tail risk Kohinoor strategies, not surprisingly, gave up ground as both volatility fell and equity markets rebounded.
The Trans-Tasman Fund managed to outperform a strong New Zealand equity market over the quarter. There were no material detractors to performance. Our underweight position in Air New Zealand and most of our overweight positions contributed positively but the standout was Vista Group, which announced a positive trading update during the quarter.
After a material appreciation in price we removed our overweight to Meridian Energy and added Coventry Group to the portfolio over the quarter.