IMPQ Monthly Report
- The Future Impact Small Caps Fund was up 11.8% net of fees, outperforming the benchmark return by 1.5%.
- It is a key goal of the Fund to demonstrate that there is no performance trade-off to invest with a focus on sustainability and ESG. Since inception in May 2019, the Fund has delivered a 17.6% p.a. return net of fees, outperforming the benchmark by 11.0% p.a.
- Positive contributors this month included Telix Pharmaceuticals (+113.7%), Calix (+38.4%), Janison Education (+35.6%) and Mach7 Technologies (+35.6%).
- Negative contributors this month included Imricor (-11.9%), Limeade (-10.1%), Genetic Signatures (-6.1%) and our holding of cash which detracted from performance in a very strong market.
|Month (%)||Quarter (%)||FYTD (%)||1 Year (% p.a.)||Since Inception* (%)|
|eInvest Future Impact Small Caps Fund||11.8%||13.4%||22.0%||16.5%||17.6%|
|S&P/ASX Small Ordinaries Index||10.3%||7.7%||17.1%||6.0%||6.5%|
|Added value (detracted)||1.5%||5.7%||4.9%||10.5%||11.1%|
^Inception date was 23 May 2019. IMPQ returns are calculated using net asset value per unit at the start and end of the specified period and do not reflect the brokerage or the bid ask spread that investors incur when buying and selling units on the ASX. Past performance is not a reliable indicator of future performance.
Better Future Highlights
We recently participated in a capital raising which added Eroad Limited to the portfolio and resulted in the company being listed on the ASX in addition to the company’s existing listing on the New Zealand Stock Exchange.
Eroad is a New Zealand based business that has developed an in-vehicle telematics system that allows owners of vehicle fleets to improve driver safety and increase the efficiency of vehicles.
Eroad has expanded into the US and Australia with interesting growth opportunities in both of these jurisdictions.
The Eroad device provides real-time driver coaching with in-vehicle feedback for speeding and harsh braking. It also monitors the length of time that drivers have been driving and “gamifies” driver behaviour to create a safe driving culture and reduce fuel consumption.
The capital raised by Eroad will be used to accelerate execution of the product development for the Eroad platform and sales and marketing of the product.
During a very strong month for the market the Future Impact Small Caps Fund was up 11.8% net of fees, outperforming the benchmark return by 1.5%. This was a pleasing result, especially as our cash levels remain elevated. We like to maintain a good cash buffer to provide scope to take advantage of opportunities that present, particularly as the market has rallied strongly in recent months.
It is a key goal of the Fund to demonstrate that there is no performance trade-off to invest with a focus on sustainability and ESG. Since inception in May 2019, the Fund has delivered a 17.6% p.a. return net of fees, outperforming the benchmark by 11.0% p.a.
Positive contributors this month included Telix Pharmaceuticals (+113.7%), Calix (+38.4%), Janison Education (+35.6%) and Mach7 Technologies (35.6%).
Negative contributors this month included Imricor (-11.9%), Limeade (-10.1%), Genetic Signatures (-6.1%) and our holding of cash which detracted from performance in a very strong market.
Telix Pharmaceuticals, which is developing products to diagnose and treat prostrate cancer, announced a number of positive developments. Firstly, it announced that it had appointed a partner to develop and commercialise Telix’s products in China which will result in Telix receiving payments of up to US$315m over time. This was significant as the market was ascribing little value for distribution of the products in the Chinese market. Telix also announced that it is acquiring TheraPharm, a Swiss-German biotechnology company developing innovative diagnostic and therapeutic solutions for blood cancers. The acquisition is interesting in that the purchase price was modest for products that complement Telix’s existing product portfolio.
Calix announced a solid business update and held a presentation to explain the opportunity presented by the lithium-manganese batteries that the company is developing. It is doing this as part of an Advanced Battery Materials Development Program that the company is participating in with other industry participants. While it is still quite early in the development process, the advantages of the lithium-manganese battery process that the company is developing include being significantly lower cost and having better performance than comparable technologies.
Janison Education announced a positive update on the company’s 1H21 outlook after higher-than-expected revenue from the recently acquired independent ICAS Assessment that is undertaken by students from around 2,500 high schools in areas such as maths and science.
Mach 7 Technologies affirmed a strong sales pipeline of the company’s IT products despite the impacts of COVID, including the signing of a significant contract with Trinity Health which is a large US health-care provider.
Imricor gave up some of the company’s recent gains after announcing it was likely that there would be some revenue delays due to COVID impacts in Europe.
Limeade was weaker after reiterating guidance albeit noting there were potential future impacts from COVID disruptions. Genetic Signatures was weaker as the market perceives that it may be negatively impact by an effective COVID vaccine.
We also participated in two IPOs that will commence trading on ASX in December and we will discuss in more detail in our next monthly update. At month end the Fund held 41 stocks and cash was 8.5%.
For November, the weighted average Perennial-derived Environmental, Social, Governance and Engagement (“ESGE”) Score of the Fund was 7.2 which is 30% higher than the benchmark ESGE Score of 5.6.
Our ESG activities during the month included:
- We attended the Responsible Investment Association Australasia (“RIAA”) 2020 annual conference which was held in virtual format due to COVID. Perennial was one of the sponsors of the conference.
- We met with Fluence Corporation and discussed the governance impacts of the recent change in management as well as reiterating our encouragement for the company to appoint a female director.
- We met with Pendal Group senior management and discussed the firm’s approach to ESG integration.
- Damian Cottier, the portfolio manager of the portfolio, presented on the “ESG Investing: Towards the Sustainable Recovery 2020” Webinar held by IBR Conferences.
This is analysis done on the Sustainable Future Trust portfolio as at Feb 2020 by the Sustainable Platform
To read more about eInvest Future Impact Small Caps Fund (Managed Fund) ASX: IMPQ, click here.
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Past performance is not a reliable indicator of future performance. Please read the PDS prior to investing. This information is general in nature and is subject to the terms and conditions outlined here.