Fund Review
Lincoln Australian Growth Fund
July 2015
Month in review
Dear Investor,
Welcome to the month of August 2015!
Equity markets recovered from a weak end to the 2014-15 financial year after the Greek government accepted a conditional bail-out from the European
Union and Chinese authorities stepped in to support their plummeting share market. The S&P/ASX 300 Accum. Index (ex. top 20) closed the month
4.12% higher, while the Lincoln Australian Growth Fund (Fund) returned 2.81% over July, underperforming its benchmark.
July began with wide attention on the political situation in Greece. After securing a mandate from its people to refuse the conditional bail-out on
offer via a referendum, the Syriza-led government effectively caved under the pressure of an imminent default and accepted a bail-out package that
included politically damaging economic reforms. The news saw European and developed market equities rally. However, China’s Shanghai Composite
Index experienced massive one-day falls, largely to do with an overvalued market and a highly leveraged investor base. This was exacerbated by the
weakening economic outlook for China. Again commodity prices came under significant pressure and Australian resource stocks bore the brunt.
Tim Lincoln
Managing
Director and
Head of
Managed
Investments
On the domestic front, the Australian economy is transitioning slowly from the resources investment boom but remains in reasonable shape. The
Reserve Bank is committed to maintaining its easing policy bias in the current benign inflation environment, which should support non-resource
capital expenditure in the medium term and provide debt relief to Australian consumers. We feel that the domestic equity market remains attractive
to investors as the earnings/dividend yields on offer at current prices remain superior to alternate asset classes.
As always, during the current reporting period the focus will firmly be directed on Australian companies rather than global macro risks. We feel that the growth portfolio is
well positioned in the current environment, where stocks offering strong earnings growth will be the outperformers.
I hope you have a happy, healthy and prosperous August.
Yours sincerely
Tim Lincoln
Managing Director
Performance1 to 31 July 2015
Lincoln Australian Growth Fund
Investors seeking growth
Suitable for
Investment objective
To outperform the S&P/ASX 300 Accumulation Index (excl. top 20 stocks) over
the medium to long term*
Half-yearly
Distribution frequency
Performance highlights
Performance contributors this month included:
Wholesale
Fund return
Benchmark S&P/ASX
300 Accum. Index
(excl. top 20 stocks)*
S&P/ASX 300
Accumulation Index
S&P/ASX
Small Ordinaries
Accumulation Index
1 month
2.81%
4.12%
4.31%
1.56%
3 months
-5.99%
-0.44%
-0.81%
-4.13%
1 year p.a.
7.55%
7.59%
5.51%
-2.77%
2 years p.a.
11.47%
11.76%
10.76%
2.50%
3 years p.a.
15.13%
12.48%
14.75%
3.05%
5 years p.a.
5.12%
7.55%
9.42%
0.63%
7 years p.a.
2.86%
2.91%
6.44%
-1.30%
Financial Year to date
2.81%
4.12%
4.31%
1.56%
Since inception p.a.
6.27%
4.42%
7.67%
2.41%
S&P/ASX 300
Accumulation Index
S&P/ASX
Small Ordinaries
Accumulation Index
2
Data referred to in the performance
commentary above relates to the Lincoln
Wholesale Australian Growth Fund unless
otherwise stated.
AP Eagers (APE) released its half year guidance
and expects an increase of 29% in net profit
before tax, driven by acquisition and organic
growth. APE shares rose 12.19% this month.
Blackmores (BKL) continued its strong run and
share price rose by 17.58% this month. The
company is expected to deliver strong profit
growth this financial year and outlook for the
business remains positive.
Infomedia (IFM) lowered its earnings guidance
for the full year and now expects slight decline
in net profit. As a result it no longer met Star
Growth Stock criteria and share price fell 12.50%.
Retail
Fund return
Benchmark S&P/ASX
300 Accum. Index
(excl. top 20 stocks)*
1 month
2.76%
4.12%
4.31%
1.56%
3 months
-6.17%
-0.44%
-0.81%
-4.13%
1 year
6.79%
7.59%
5.51%
-2.77%
2 years p.a.
10.61%
11.76%
10.76%
2.50%
3 years p.a.
14.22%
12.48%
14.75%
3.05%
5 years p.a.
4.29%
7.55%
9.42%
0.63%
7 years p.a.
2.00%
2.91%
6.44%
-1.30%
Financial Year to date
2.76%
4.12%
4.31%
1.56%
Since inception p.a.
0.37%
-1.19%
2.94%
-4.54%
3
Fund returns are calculated using exit prices and
are net of management fees, ongoing fees and
expenses, and assume distributions are reinvested
and that no tax is deducted.
2
11 January 2005
3
1 June 2007
*Benchmark S&P/ASX 300 Accumulation Index
(excluding top 20 stocks) over the medium to long
term.
1
Fund Review
Lincoln Australian Growth Fund
July 2015
Lincoln Australian Growth Fund holdings as at 31 July 2015
Code
Company
Portfolio holding %
Large Diversified Industrials
62.48%
ANN
Ansell Limited
6.55%
WES
Wesfarmers Limited
6.44%
SKT
Sky Network Television Limited
6.26%
REA
REA Group Ltd
6.22%
DMP
Domino's Pizza Enterprises Limited
6.18%
SGH
Slater & Gordon Limited
6.17%
CTX
Caltex Australia Limited
6.08%
SRX
Sirtex Medical
5.99%
BKL
Blackmores Limited
5.33%
IIN
iiNET Limited
5.04%
APE
AP Eagers Limited
2.22%
Large Resources
6.36%
WSA
6.36%
Western Areas Limited
Large Financials
12.25%
PPT
Perpetual Limited
6.26%
MFG
Magellan Financial Group Ltd
5.99%
Small Industrials
11.58%
CAJ
Capitol Health Limited
3.99%
GBT
GBST Holdings Limited
3.35%
HSN
Hansen Technologies
2.40%
CKF
Collins Foods Limited
1.11%
IFM
Infomedia Limited
0.41%
SRV
Servcorp Limited
0.32%
Small Financials
5.24%
CCP
5.24%
Credit Corp Group Limited
Cash
Strategy update
The Fund sold positions in Navitas Limited (NVT),
Infomedia (IFM) and My Net Fone Limited (NVT) as
they no longer meet the Star Growth Stock criteria.
Due to liquidity constraint, the Fund was still in the
process of selling IFM at the end of July.
The Fund purchased positions in AP Eagers Limited
(APE) and Collins Food Limited (CKF) after they
both met the Star Growth Stock criteria.
The portfolio was rebalanced to ensure it remained
an equally weighted Star Growth Stock portfolio.
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2.09%
Important information.
Key data
Lincoln Wholesale
Australian Growth Fund
APIR code
Fund inception
Lincoln Retail
Australian Growth Fund
ETL0043AU
ETL0089AU
11 January 2005
1 June 2007
Minimum initial investment
$250,000
$20,000
Management costs
0.95% p.a.
1.75% p.a.
Entry/exit fees
Distribution frequency
Estimated Average yield1
Entry/exit unit price2
Fund size2
Responsible Entity
Investment Manager
1
This estimated dividend yield is as at 31 July 2015
2
As at 31 July 2015
Nil
Nil
Half-yearly
Half-yearly
2.0%
1.5%
$1.1840/$1.1758
$0.8408/$0.8350
$61.01 million
Equity Trustees Ltd
Lincoln Indicators Pty Ltd
This information is issued by the Investment Manager,
Lincoln Indicators Pty Ltd (Lincoln) ACN 006 715 573,
AFSL 237740. The Responsible Entity of the Fund is Equity
Trustees Limited ABN 46 004 031 298, AFSL 240975. All
figures, information and illustrations are as at 31 July
2015 unless stated otherwise. Portfolio holdings are
subject to change without notice. This communication
contains general information only. It has been prepared
without taking into account the objectives, financial
situation or needs of any individual investor. As a result,
you should consider its appropriateness in regard to your
particular objectives, financial situation and needs. You
should also consider obtaining your own independent
advice before making any financial decisions.
You should read the Product Disclosure Statement
(PDS) and the Reference Guide where references are
made for additional information in the PDS for the
Lincoln Australian Growth Fund or Lincoln Australian
Income Fund before making any decision about
whether to acquire or continue to hold in either product.
Applications to acquire units can only be made on
an Application Form attached to a current PDS. You
should also read and consider our Financial Services
Guide (FSG), which sets out key information about the
services we provide. A copy of each PDS, including
the Reference Guide and our FSG are available by
contacting Lincoln on 1300 676 333 or via our website
www.lincolnindicators.com.au.
Lincoln, its employees and/or associates hold interests
in companies listed in this communication. This position
may change at any time without notice. Investments
go up and down. Past performance is not a reliable
indicator of future performance. Lincoln will be
remunerated based on funds invested. Neither Lincoln,
Equity Trustees Limited, or their directors, employees
or agents provide any guarantee, representation or
warranty as to the reliability, accuracy or completeness
of the information in this document; and do not accept
any responsibility or liability arising in any way (including
by reason of negligence) for errors in, or omissions
from, this document. This disclaimer does not purport
to exclude any warranties implied by law which may not
be lawfully excluded. Neither Lincoln, Equity Trustees
Limited, or their directors, employees or agents
guarantees the performance of, or the repayment of
capital or income invested in the Fund.