Portfolio review

The Fund rose 0.7% in July, trailing global markets for the month (2.4%). Global markets rallied +2.9% in USD terms, with a small rise in the Australian dollar providing the difference.

Headlines on the trade war between the U.S. and China continued to drive markets. Equities initially rallied on news that both countries were holding trade talks, though gave up some of the earlier gains after news that they made little progress in resolving trade disputes. The US (+3.5%) was the best performing region, followed by Europe (+3.3%) with Emerging Markets lagging (+1.7%) and China (-3.1%) suffering the largest losses for the month.

The largest detractor for the month was our long-held position in Open House. Depressed sentiment on the Japanese housing sector saw all stocks in the housing sector fall with the stock dropping 7%. We remain holders and the Fund has added to the position post month-end, after the company announced it will acquire Hawk One, a smaller Japanese home developer. This appears to be a thoughtful acquisition in the Nagoya region that is EPS accretive, yet it has not garnered much attention from the broking community.

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