microequities high income value microcap fund august 2012 update
DESCRIPTION
Microequities High Income Value Microcap Fund returned a positive +4.34% versus the All Ordinaries Accumulation Index positive +2.12% in August. Currently forecast to provide a grossed up dividends yield of +11.73%*. The Fund seeks to provide investors with regular cash distributions and long term capital growth. *Forecast Grossed up Yield is based on internal forecasts and actual results may vary. Investors should note that Gross Dividend Yield is not a forecast distribution as distributions will depend on actual dividend income received and actual number of units on issue at the time a distribution is made.TRANSCRIPT
MICROEQUITIES ASSET MANAGEMENT |AFSL 287526 |Suite 702, 109 Pitt Street, Sydney NSW 2000 Office: +61 2 9231 6169 Fax: +61 2 9475 1156 [email protected]
AUGUST 2012 PERFORMANCE UPDATE by Chief Investment Officer Carlos Gil REPORTING SEASON A key consideration in the construction of our portfolio for the High Income Value Microcap Fund was not only the forecast
grossed up yield of the business, but the sustainability of that dividend yield. To create long term value for our investors we
need to identify businesses that have a solid business model which can maintain the dividend payment commitments to
their shareholders. To sustain a dividend, a company must hold a strong resilient business model that can withstand
competitive pressures and often unforeseen challenges, not all business models are equal. Additionally, those businesses
that hold genuine growth potential and are consequently able to achieve their forecast growth are logically in a strong
position to not only maintain their total dividend commitments but are likely to increase them.
Our current High Income Value Microcap Fund held 15 businesses during the reporting period and we are pleased to report
the following changes to total dividend payments by the companies;
Change in total dividend payment of high Income Value Microcap Fund Portfolio
Number of Companies that lowered total dividend payment 3
Number of Companies that maintained total dividend payment 4
Number of Companies that increased total dividend payment 8
Microequities High Income Value Microcap Fund returned a positive +4.34% versus the All Ordinaries Accumulation Index positive +2.12% in August.
Overall the reporting season provided us with confirmation that our 15 owned businesses are well placed to maintain their total dividend commitments. Whilst the forecast dividend yield four our fund has slightly fallen due to price appreciation (capital growth), we still note that still represents a 8.69% premium over the risk free rate of return currently at 3.04%. Current Forecast Grossed Up Dividend Yield of the Fund*: +11.73% *Forecast Grossed up Yield is based on internal forecasts and actual results may vary. Investors should note that Gross Dividend Yield is not a forecast distribution as distributions will depend on actual dividend income received and actual number of units on issue at the time a distribution is made.
*High Income Value Microcap Portfolio as of 31
st of August
1.2%
51.9%
16.4%
3.1%
9.5%
3.4% 3.2% 0.9%
6.4% 4.0% Cash
Software & Services
Consumer Durables & Apparel
Capital Goods
Media
Commercial Serv. & Sup.
Diversfied Financials
Retailing
Banks
Real Estate
Latest Unit Price
$1.0492 Latest Fund Performance as at August 31, 2012
FUND AOAI* OP* 1 Month +4.34% +2.12% +2.21%
3 Month +7.91% +6.21% +1.69%
6 Month +8.20% +1.12% +7.08%
12 Month
Inception +8.20% +1.12% +7.08% (Returns are calculated after all fees and expenses and reinvestment of distributions. Inception of Fund March 1, 2012) *AOAI: All Ordinaries Accumulation Index. *OP: Out-performance. Past performance is not indicative of future performance.