Recent additions to the Powerwrap Approved Products List – Month of July 2019

Recently, Powerwrap has added the following funds to our Approved Products List (APL). Some are subject to close. If you are an adviser who would like access to any of these funds please raise a ticket through Hive or the Service Desk. 

APIR CODE Fund Manager – Managed Fund Description
COR0001AU Cor Capital Fund Absolute Return
RGL5177AUThe Regal Global Equity Income Fund  Global Equity
SWI1413AU WCM Quality Global Growth Fund (Managed Fund)  Global Equity
IM BasedThe Navis Jockey Fund Private Equity
IM BasedOctopus Innovation Fund  Venture capital
PER7572AU  MCP Credit Trust Credit
IM BasedPEP – Secure Assets Fund A Private Equity
IM BasedICAM Duxton Port Infrastructure Trust Infrastructure
IM BasedWingate Ordinary Note II  Credit
BFL3446AUWheelhouse Global Equity Income fund  Global Equity
WCP8486AUPerennial Value Management – Perennial Private to Public Opportunities Fund Listed Absolute Return
IM BasedShenkman Capital – Global High Yield Fund Global Bonds
IM BasedKapstream Absolute return fund – Income Plus – Janus Henderson Absolute Return
PIM1966AU  CFM IS Trents Trust Class A Units Multi-Asset
IM BasedCVS Lane – 312 South Street, Marsden Park  Property
FID0026AU Fidelity Future Leaders Aus small cap Equities
ETL4432AUL1 Capital UK residential property High Yield Residential Prop
HOW8743AUKapstream Absolute Return Income Plus IAbsolute Return
SLT3458AULong-Short Credit Fund Institutional Investor Class  Long Short
ECC2707AU Ellerston – JAADE Retail Fund Private Equity
IM BasedMutual Private Opportunities Fund (Rent 4 Keeps) Private Equity
SBC0811AU UBS Cash fund Cash

Powerwrap’s Model Portfolios – Recent Additions

Model Portfolio ManagerBanyantree Investment Group
Model Portfolio NameBanyantree Australian Core Model Portfolio
Model descriptionS&P/ASX 300, with the ability to invest up to 30% in global stocks and 30% in ex ASX300 stocks. Between 20 and 35 holdings. 
No more than 10% in any stock. Up to 100% in cash.
Investment ObjectiveTo beat the ASX 200 index
Benchmark IndexASX 200
Who is this option suitable for?Retail and institutional clients
Model Portfolio Fee (ex. GST)25 bps (excluding transaction costs)
Performance FeeNil
Asset Allocation Ranges (including target allocations)Cash: 0 – 100% Companies within ASX300: 0 – 100% 
Global Stocks: up to 30%
Authorised InvestmentsDirect shares
Minimum Cash Holding2%
Minimum Model Investment$20,000
Indicative Number of AssetsBetween 20 and 35 holdings.
Minimum suggested timeframe5 years
Risk levelMedium
Model Portfolio ManagerBanyantree Investment Group
Model Portfolio NameBanyantree Australian Small Companies Model Portfolio
Model descriptionTo invest in all companies outside the ASX100, with the ability to invest up to 30% in global stocks. Between 20 and 35 holdings. No more than 10% in any stock. Up to 100% in cash.
Investment ObjectiveTo beat the ASX Small Companies index
Benchmark IndexASX Small Companies
Model Portfolio Fee (ex. GST)25 bps (excluding transaction costs)
Performance FeeNil
Asset Allocation RangesCash: 0 – 100% Companies outside ASX100: 0 – 100% 
Global Stocks: up to 30%
Authorised InvestmentsDirect shares  
Minimum Cash Holding2%
Minimum Model Investment$20,000
Indicative Number of AssetsBetween 20 and 35 holdings.
Model Portfolio ManagerBanyantree Investment Group
Model Portfolio NameBanyantree Australian Multi-Asset Strategy
(Moderate Growth 70% / 30%)
Investment ObjectiveTo beat the LT RBA Cash Rate + 3.5%
Benchmark IndexLT RBA Cash Rate + 3.5%
Model Portfolio Fee (ex. GST)25bps (excluding transaction costs)
Performance FeeNil
Asset Allocation RangesCash: 0 – 100% 70% in Growth assets 30% in Defensive assets
Authorised InvestmentsDirect shares, hybrids, ETFs and managed funds
Minimum Cash Holding2%
Minimum Model Investment$20,000
Indicative Number of AssetsUp to 20 investments
Model Portfolio ManagerBlackmore Capital
Model Portfolio NameBlended Australian Equities Portfolio
Model descriptionThe Blackmore Capital Blended Australian Equities Model Portfolio is focused on the Australian equity asset class. Diversity is achieved through investment across a variety of equity strategies, industries and geographies, all aiming to emphasise alpha driven returns and risk reduction. Blackmore Capital’s investment approach aims to generate long-term risk adjusted returns, by investing in companies that focus on generating high-quality earnings and operate in industries that exhibit favourable long-term growth prospects.
Investment ObjectiveThe portfolio seeks to generate long term capital appreciation by investing in Australian listed equities. The portfolio aims to do so with lower volatility and greater downside protection relative to the S&P/ASX 200 Accumulation Index benchmark.
Benchmark IndexS&P/ASX 200 Accumulation Index
Who is this option suitable for?The Blackmore Capital Blended Australian Equities Model Portfolio is suitable for an investor who is seeking long term capital growth via an exposure to the Australian share market. This portfolio is designed for investors who seek a lower level of volatility and greater downside protection relative to the S&P/ASX 200 Accumulation Index, prefer a relatively lower turnover portfolio and hold a moderate appetite for risk.
Model Portfolio Fee (ex. GST)0.60%
Performance FeeNil
Asset Allocation Ranges (including target allocations)Australian Equities – 75% to 100% Cash – 0 to 25%
Authorised InvestmentsAustralian Shares Cash
Minimum Cash Holding2%
Minimum Model Investment$20,000
Indicative Number of Assets20 – 40
Minimum suggested timeframe5 years+
Risk levelMedium-High
Model Portfolio ManagerBlackmore Capital
Model Portfolio NameAustralian Equities Income Portfolio
Model descriptionThe Blackmore Capital Australian Equities Income Model Portfolio is focused on the Australian equity asset class. Diversity is achieved through investment across a variety of equity strategies, industries and geographies, all aiming to emphasise alpha driven returns and risk reduction. The primary focus of the portfolio is to identify companies that provide an attractive and stable dividend income stream over the long term. Blackmore Capital’s investment approach aims to generate long-term risk adjusted returns, by investing in companies that focus on generating high-quality earnings and operate in industries that exhibit favourable long-term growth prospects
Investment ObjectiveThe portfolio seeks to deliver long term growth in both capital and income by investing in Australian listed equities. The portfolio aims to do so with lower volatility and greater downside protection relative to the S&P/ASX 200 Accumulation index benchmark.
Benchmark IndexS&P/ASX 200 Accumulation Index
Who is this option suitable for?The Blackmore Capital Australian Equities Income Model Portfolio is suitable for an investor who is seeking an income stream via an exposure to the Australian share market.   This portfolio is designed for investors who are seeking a lower level of volatility and greater downside protection relative to the S&P/ASX 200 Accumulation Index
Model Portfolio Fee (ex. GST)0.60%
Performance FeeNil
Asset Allocation Ranges (including target allocations)Australian Equities – 75% to 100% Cash – 0 to 25%
Authorised InvestmentsAustralian Shares Cash
Minimum Cash Holding2%
Minimum Model Investment$20,000
Indicative Number of Assets20 – 40
Minimum suggested timeframe5 years+
Risk levelMedium

Monthly Model Portfolio update

Blackmore Capital – Monthly update

Central bank risk aversion was on full display in July with both Australia and the US cutting interest rates by 25 basis points. Mounting concerns over the weakness in the global economy and escalating trade tensions between the US and China provided the tinder for the US Federal Reserve to reduce its interest rate for the first time since the global financial crisis.

Global equity markets remarkable rally since December 2018 has been predominately fuelled by Central Bank intervention and fiscal stimulus as investors have chosen to ignore company earnings headwinds. Yet, with a growing number of Australian companies pre-announcing earnings downgrades, the ASX 200 price-earnings valuation of circa 16.2 times looks increasingly vulnerable. As such, we have raised portfolio cash levels to around 20%.

Blended Australian Equity Portfolio  |  Australian Equities Income Portfolio

The Blended Australian Equity Portfolio finished the month of July up 2.07% compared to the ASX Accumulation Index up 2.94%. Positive attribution for the Blended Australian Equity Portfolio was driven by Caltex (CTX), Resmed (RMD), and Cleanaway Waste Management (CWY). Whereas, Adelaide Brighton (ABC), Nearmap (NEA) and Healius (HLS) weighed negatively on attribution.

The Australian Income Portfolio finished the month of June up 1.88% compared to the ASX Accumulation Index up 2.94%. Positive attribution for the Australian Income Portfolio was driven by Caltex (CTX), ASX Limited (ASX), and Woolworths (WOW). Whereas, Adelaide Brighton (ABC), Healius (HLS) and Woodside (WPL) weighed negatively on attribution.

Blended Australian Equities Portfolio
The Blended Australian Equities Portfolio commenced investing in Feb 2014. Since its inception, the portfolio has achieved a compound annual return of 12.4% compared to the ASX 200 Accumulation Index of 9.0%. 

Australian Equities Income Portfolio
The Australian Equities Income Portfolio commenced investing in May 2014. Since its inception, the portfolio has achieved a compound annual return of 10.9% compared to the ASX 200 Accumulation Index of 8.9%.

Recent changes to the Blended Australian Equities Portfolio & Australian Equities Income Portfolio  

Reduced Woodside Petroleum (WPL)
We reduced the position in Woodside because its major growth projects, Browse and Scarborough, are facing several uncertainties from a regulatory, market and joint venture partner point of view. The partners in Woodside’s proposed projects are facing pressure from the WA Government to commit to development in order to retain the resource leases. While this may suit Woodside’s agenda to develop the projects, the LNG market into 2025 is presented with several rival projects (currently ~100mtpa) with competitors that are prepared to develop with significant uncontracted capacity. This environment may necessitate the higher risk of developing the projects with significant uncontracted capacity. We have reduced the Woodside exposure in the portfolios until there is greater clarity around these issues.     

Reduced Qube Holdings (QUB)
QUBE Holdings has an impressive suite of operating divisions in Automotive, Bulk and General Stevedoring along with Logistics and strategic developments in the Moorebank Logistics Park. This combination of essential logistics earnings with long term Industrial Logistics property development is more attractive amid a low interest rate environment and the stock price traded to record high earlier in July. While we remain long term investors in this suite of assets, the share price has moved well ahead of earnings in the near term and has traded up with the support of the bond market rally.

Sold QBE Insurance (QBE) & Reduced Insurance Australia Group (IAG)
Over the course of the last 12 months IAG and QBE have benefitted from a period of greater industry discipline and a more favourable pricing environment. Both companies have recorded strong share price appreciation in 2019 and their earnings multiples now look relatively full. Moreover, the bond yield collapse in 2019 and the likely long- term impact of an extended period of record low interest rates will negatively weigh on insurance sector returns. As such, we have sold our position in QBE Insurance and reduced our weighting in IAG Limited