The Antares Dividend Builder Model Portfolio delivered a return of -0.8% (net of fees) for the month of June, underperforming its benchmark index by 1.4%.
The Industrial sector of the Australian share market was virtually flat in June, with the S&P/ASX 200 Accumulation Index rising just 0.6%. Strength was evident in health care, banks and technology whilst REITs and utilities were amongst the worst underperformers, negatively impacted by the rise in domestic 10-year bond yields. Moody’s downgraded the credit ratings of the four major banks (ANZ, CBA, NAB and WBC) whilst the Australian Competition Tribunal approved the merger of Tatts Group (TTS) and Tabcorp Holdings (TAH) as long as Odyssey Gaming Services is divested. Vocus Group (VOC) received a takeover offer from private equity company, KKR.
The Portfolio benefited from overweight positions in Fletcher Building (FBU) and Suncorp Group (SUN). FBU is benefiting from continued growth in the New Zealand economy. Two sell-side analysts also confirmed their “buy” recommendations for FBU during the month, noting that its valuation is relatively attractive. SUN revised its takeover offer to buy 100% of Tower, via its wholly-owned subsidiary Vero Insurance New Zealand, from $1.30 to $1.40 per share. Tower then announced that it would support the revised Suncorp offer over the competing offer received from Fairfax Financial Holdings.
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