The Antares Elite Opportunities Fund delivered a return of 0.8% (net of fees) for the month of April, underperforming its benchmark by 0.2%.
The Australian share market continued to perform well in April, with the S&P/ASX 200 Accumulation Index rising 1.0%. Interest rate sensitive sectors performed relatively well as bond yields rallied. This included REITs (+2.6%), utilities (+3.1%) and financials (+1.9%). Other outperforming sectors included industrials (+4.4%), technology (+3.9%) and healthcare (+3.2%). Consumer staples (-2.6%) and resources (-1.6%) lagged the market but telecoms (-9.9%) was the weakest sector as intense competition and the NBN roll out are negatively impacting earnings expectations.
The Fund derived a significant relative performance boost from choosing not to hold a position in Telstra Corporation (TLS) which performed poorly. TPG Telecom announced it was the successful bidder for 700MHz of spectrum at a price of $1,260m. This should enable TPG to enter the mobile market, which is negative for TLS as it will further increase mobile competition. The Fund’s overweight position in Aristocrat Leisure performed well as survey data in the US suggested ALL is continuing to win market share. ALL also experienced some expansion in its price earnings ratio (PE) as investors are positive on the company’s prospects and are therefore willing to pay more for its future earnings. The market seems to be expecting a favourable earnings result to be delivered in May.
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