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Northward Equity Income Fund Monthly Retail Report August 2014

Portfolio review
The Northward Equity Income Fund (NEIF) gained +0.39% for the month of August. It was a big month for income with the Fund well positioned to capture dividend income from Commonwealth Bank, Wesfarmers and Woodside Petroleum. The Fund was also well positioned to capture the special dividend from Suncorp and the increased dividend and off-market buyback from Telstra. Option Income for the month was mainly captured from Commonwealth Bank, ANZ Bank, Westpac Banking Corporation, CSL, James Hardie Industries, BHP Billiton and Insurance Australia Group. The Fund’s average market exposure during August continues to be less than half the market exposure of its underlying benchmark.
The S&P/ASX 100 Accumulation Index gained 0.5% over August despite being down 3.5% at one point during the month. It was a busy month for equity markets with the focus on reporting season. The standout theme during the month was the willingness of companies to deliver on dividends and capital management. The standout was the Fund’s Suncorp holding which delivered a higher special dividend than the market was expecting. Telstra, also held by the Fund, increased its final dividend to 15 cents per share and announced a $1 billion off-market buyback of its shares on issue. On the economic front, domestic data was mixed. The Reserve Bank of Australia left the cash rate on hold at 2.5%, iron ore declined 8.5% to $US87 per tonne, and the Australian Dollar continued to be well supported gaining 0.5% to $0.934 US Dollars.

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