The Antares Elite Opportunities Fund delivered a return of 0.9% (net of fees) for the month of June, outperforming its benchmark by 0.7%.
The Australian share market was virtually flat in June, with the S&P/ASX 200 Accumulation Index rising just 0.2%. Strength in health care (+6.1%), banks (+1.5%) and technology (+1.4%) was largely offset by weakness in energy (-6.9%) as the oil price fell in response to expectations of increased supply. REITs (-4.8%) and utilities (-2.7%) were also amongst the worst underperformers, negatively impacted by the rise in domestic 10-year bond yields. The iron ore price rose 14% as China’s growth data improved. This supported large resource stocks, including BHP Billiton (BHP) and Rio Tinto (RIO), that rallied strongly late in the month.
The Fund benefited from overweight positions in Vocus Group (VOC) and Qantas Airways (QAN). Private equity group, KKR, made a takeover bid for VOC, offering $3.50 cash per share. This represented a 22.4% premium to the last closing price. The offer is subject to several conditions, including satisfactory due diligence, financing and a unanimous recommendation from the VOC board. VOC has formed an Independent Board Committee to review the proposal and make a recommendation. QAN did not announce any specific news but the stock continued to perform strongly, having released a favourable Q317 trading update and FY17 guidance in May. Domestic revenue for the group was up a strong 4.6% in the quarter and international revenue, whilst down 5.6%, represented an improvement on the previous period. FY17 guidance was stronger than analysts’ expectations. QAN also held an investor day in May that was viewed favourably by investors.
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