Fund factsheet: bt wholesale american share fund
BT Wholesale American Share Fund
ARSN: 087 594 509
About the Fund
The BT Wholesale American Share Fund (Fund) is an actively managed portfolio
of North American shares. The Fund invests primarily in United States and
Canadian shares. The Fund may also hold cash and may use derivatives.
The management of BTIM's regional international share assets is outsourced to
MFS International (U.K) Limited (MFS), a member of the Boston-based Massachusetts Financial Services group. A member of the firm's group
established the first mutual fund, Massachusetts Investors Trust, in 1924.
The Fund aims to provide a return (before fees, costs and taxes) that exceeds
the S&P500 Total Return Index in AUD over the medium to long term. The
suggested investment timeframe is five years or more.
Sector allocation (as at 30 June 2016)
MFS believes that bottom-up, fundamental analysis offers the best opportunity to identify high quality companies with above average, sustainable earnings
growth. Further, MFS believes that focusing on stock selection, rather than
sector selection, is a compelling way to add value versus the S&P 500 over time.
Each analyst is responsible for following companies within their specific industry
coverage. The analysts develop and maintain their own models, visit with
company management, and interview competitors, suppliers and customers in
order to form an opinion on each company.
Financials ex Property Trusts
Fund size (as at 30 Jun 2016) $44 million
Date of inception1
1 MFS started managing the Fund in June 2006. 2 The buy-sell spread represents transaction costs incurred whenever you invest or withdraw funds, and may vary from time
to time without notice.
The Fund is managed in sector neutral style vs. the S&P500 according to eight broad sectors as defined by MFS: Capital Goods, Consumer Cyclicals,
Consumer Staples, Energy, Financial Services, Health Care, Technology and
3 You should refer to the latest Product Disclosure Statement for
Telecom. Each sector has an allocation within the MFS Research Portfolio which
full details of fees and other costs you may be charged.
matches its proportionate weight in the S&P 500. The Quantitative Analysts will
4 This is the fee for managing the assets of the Fund and
run screens to exclude companies that are deemed to be illiquid.
overseeing the operations of the Fund. The Issuer fee is paid from
The Fund will typically hold 80-110 stocks.
the assets of the Fund and is reflected in the unit price of your investment.
recovery in oil prices as well as management's work to reduce capital expenditure and update with strong production
Global shares produced a positive return for the quarter despite
continuing market uncertainty and geopolitical risks increasing. The MSCI World ex-Australia returned 4.37% for the June quarter,
• Overweighting energy exploration and production company
driven by stronger US markets and a falling Australian dollar. The
EOG Resources aided relative performance. The company
US market continued its rise towards all-time highs with the S&P
reported roughly in line earnings for the quarter. Total
500 returning a positive 1.9% for the quarter, driven by the
production came in at the high end of guidance while the
potential for delayed rate hikes and a rising oil price. This saw the
bottom-line results were supported by costs generally in line to
Energy sector (+10.8%) and Utilities (+5.9%) outperform.
better than guidance.
European markets were most affected due to its proximity to the
Significant impacts on performance - Detractors
UK and the potential ramifications of Brexit on their already struggling economy. The German DAX index returned -3.65% and
the broader Eurostoxx 50 index -4.7%. Remarkably the UK share
• Avoiding diversified medical products maker Johnson &
market made a dramatic rebound post-Brexit that saw it finish up
Johnson held back relative returns. Strong growth in the
5.3% for the quarter.
pharmaceutical division helped drive overall corporate growth
Asian markets were also negative, with the big impact being felt by
in the first quarter. Strong costs controls and favorable FX
the Japanese share market. The Nikkei 225 index dropped 7.1%
movements also supported the solid results. Management
for the quarter, with growing concerns over a strengthening Yen
raised its outlook for the remainder of 2016.
and its impacts on corporate earnings especially the large
• Not holding a position in shares of pharmaceutical giant Pfizer
detracted from relative performance. The company reported
The Australian Dollar was lower against most currencies for the
strong first-quarter results, with its Prenvar, Lyrica and Enbrel
quarter. The AUD/USD fell 2.7% as did the AUD/EURO down -
products contributing most to the revenue beat.
0.3%. The largest drop was against the Yen where we fell 10.8%.
• The portfolio's overweight position in biopharmaceutical
The biggest move, unsurprisingly, was against the GBP with the
company Alexion Pharmaceuticals detracted from relative
AUD/GBP up 7.3% for the month.
performance. The company reported weak quarterly results
below investor expectations. Macroeconomic conditions in Latin American negatively impacted revenues from Soliris
The Fund outperformed the S&P 500 during the June quarter.
which came in lower than expected.
• Security selection in information technology and financials
• An overweight position in US oil refiner Valero Energy
detracted from relative performance. The company reported
Individual stocks: Memorial Resource Development and EOG
quarterly earnings that missed analyst estimates as the rising
crude price has squeezed gasoline margins and the diesel
market has been extremely weak.
• Security selection in healthcare
• Not owning shares of telecommunication services provider
AT&T detracted from relative performance. The company
• Individuals stocks: Valero Energy and not holding AT&T
reported earnings per share ahead of market consensus, while
Significant impacts on performance - Contributors
its revenues were inline. Perhaps a bigger factor in its outperformance during the period was due to heightened
investor interest in owning defensive, higher yielding securities following increased uncertainty after the UK voted to leave the
• The portfolio's holdings of business-oriented social networking
EU and the US Federal Reserve put future rate hikes on hold.
service LinkedIn aided relative returns after shares spiked late in the reporting period following the announcement software
giant Microsoft was to acquire LinkedIn for $26.2 billion in an
We employ a sector neutral approach relative to the S&P 500
all-cash deal representing a 50% premium over its previous
Index and use our bottom-up, fundamental investment approach to
day's price. The deal is expected to enhance Microsoft's
identify solid companies with a bias towards companies generating
transition to a cloud computing services provider.
above-average, sustainable growth and whose stocks trade at
• An underweight to shares of software giant Microsoft
reasonable valuations. Our eight sector teams are focused on
contributed to relative results after the company reported
constructing portfolios that outperform their respective S&P 500
mixed results for the quarter. Although overall earnings results
sectors with the flexibility to invest across industries and add value
were in line with expectations, gross margins came under
through stock selection.
pressure and weaker-than-expected growth in its Server/Cloud
Despite a choppy end to the quarter courtesy of the Brexit vote, the
and Office segments fueled investor concern about prospects
S&P 500 was able to finish positive for the quarter. Low volatility,
for the company's faster growing segments. Finally, news that
high dividend yield and defensive names led the way. At the sector
the company had reached an agreement to acquire Linkedin
level, the resurgence of energy stands out as it finished the quarter
for $26bn surprised the market, further pressuring its share
as the best performing sector in the S&P 500. After nearly two
years of declining North American rig counts (longest correction in
modern times), rig counts climbed modestly in June. While it is certainly premature to declare this move a bottom, based on an
• Holding REIT Store Capital contributed to positive
analysis of prior cycles, the bottom in rig counts tends to follow the
performance. Shares rose as Q12016 earnings were above
bottom in oil prices by 3-6 months. In this cycle, the bottom in oil
expectations and the company raised its acquisition guidance.
prices occurred on February 11th, nearly 4 months before the
recent bottom in rig counts. In past cycles, rig productivity continued to improve for another 6-12 months after the bottoming
• The portfolio's position in independent natural gas and oil
as it takes a while for confidence in the cycle to set in and
company Memorial Resource Development contributed to
influence the type of drilling companies are willing to perform or
relative results. The stock reacted positively to the continued
entice new/more companies back into the field. At this point, it will be important for oil to hold around the $50 level for the recovery to
be sustainable. In looking at the portfolio's performance during the
Coors is a potential takeout candidate, as buying Molson Coors
quarter, while our underweight to the highest yielding stocks was a
would give a company such as Heineken brands, scale and US
meaningful headwind, over the long term our ability to outperform
profit pool exposure.
will largely be a function of our ability to identify compelling investment opportunities rather than broad sector, factor, market or
Within energy, the opportunity set remains challenging but we
economic calls and this quarter strong stock selection across the
continue to favor reasonably valued exploration & production
portfolio (6 of the 8 sector teams had positive stock selection)
companies that we believe can sustainably and profitably grow
production over the long term, offer top quality acreage, skilled production ability with a focus on reducing costs and improving
Within their sector teams our analysts continue to look for
well productivity, and stronger balance sheets. We are
compelling investment opportunities. Within capital goods, given a
underweight the integrated oil companies on valuation concerns
variety of industrial headwinds (weak oil & gas, foreign exchange,
and at current oil prices cash flows do not appear to cover capex
slowing China/emerging market growth) we favor several well
and dividend payments. For example, Chevron recently guided
positioned, high quality multi-industry names including Danaher,
down capex and with lower capex guidance it will be difficult for
Roper, and Honeywell International, which offer compelling
Chevron to grow post 2018, replace reserves, grow its dividend
valuations, capital allocation/M&A catalysts, fundamental
and maintain its AA balance sheet. In addition, we believe our E&P
momentum derived from high levels of execution and the potential
names such as EOG Resources and Pioneer Natural Resources
for margin expansion. Within transportation, we continue to prefer
should outgrow the integrated companies above $40 oil. Within oil
railroads given their ability to grow and take price. Railroads
services, we favor Halliburton and Schlumberger over the
volumes have been negatively impacted by the energy complex,
equipment companies and drillers. While near term valuations for
particularly coal. However, pricing is holding and the expectation is
Halliburton and Schlumberger appear elevated, on a normalized
for similar pricing increases in 2016. In addition, even assuming
basis both look reasonable. In addition, history suggests that
earnings weakness in 2016 the stocks are still trading at or below
recoveries can be much quicker and steeper than expected,
a market multiple. Within autos, we are avoiding the auto OEM's
potentially leading to earnings higher than currently projected. Of
as margins will be under pressure due to regulatory/fuel efficiency
the two, we currently have a preference for Halliburton given its
spend and we have grown increasingly wary of both the potential
higher exposure to North America, which should bounce much
peaking North American seasonally adjusted annual rate (SAAR)
harder in a recovery assuming unconventional North American
for vehicle sales as well as the potential pull forward of auto sales
production is the global swing production.
in China due to government incentives. We view coatings as an attractive industry (pricing power, consolidated within end markets,
Within financial services, we remain underweight money center
high barriers for new entrants, attractive returns) and we remain
banks as the ongoing D.C. reform agenda results in a slow pace
overweight. Finally, we sold our position in Crown Holdings as we
for capital return. We believe that regional banks are uniquely
continued to build our position in Berry Plastics Group. Berry, the
positioned to benefit from G-SIFI regulations that put larger scale
leading provider of value-added plastic consumer packaging and
competitors at a marginal regulatory cost and capital driven
engineered materials, trades at a sizable discount to Crown
disadvantage. In keeping with this line of thinking, we eliminated
Holdings, grows faster, and is de-levering.
our position in Wells Fargo and started a new position in US Bancorp. Regarding Wells Fargo, while we still view the bank as
Within consumer cyclicals, we continue to account for how the
high quality, we believe the bank must operate under a set of
internet impacts specific companies. One area where the impact of
regulatory constraints not present for other super regional banks
the internet has been significant has been retailing with
and these unique constraints will likely cause earnings growth to
Amazon.com putting pressure on many retail business models,
be lower than peers and credit risk to be higher than has
one of the reasons we own Amazon.com. As we look for additional
historically been the case. Conversely, we believe US Bancorp is
opportunities in retailing, finding businesses less impacted by the
poised for relative outperformance driven from fee growth,
threat of the internet is something we take into consideration and
operating leverage and credit protection. Also, the bank is among
Costco, Ross Stores and AutoZone fit that description. Elsewhere,
the most diverse from a product and geographic perspective
we continue to seek differentiated ideas in a tough retail landscape
providing natural growth and credit hedges. Finally, the bank is the
and given some challenging near term trends we decided to
ideal size and its lower regulatory burden relative to the largest
reduce our apparel overweight and eliminated our position in Gap.
banks gives management greater flexibility to grow organically or
Gap is undeniably cheap, but in a tough traffic environment without
through M&A, pay dividends and buy back stock.
broad based women's fashion trends, the path forward for Gap is challenging.
We also eliminated our position in PrivateBancorp following strong performance. Within insurance, we are underweight largely due to
Within consumer staples, we made several adjustments to
not owning Berkshire Hathaway, but we did start a new position in
positioning based on changing analyst views. Specifically, we
Aon, which offers risk management services, insurance and
swapped our Kimberly-Clark position into Procter & Gamble. We
reinsurance brokerage, human resource consulting and
believe Kimberly-Clark's current valuation is less compelling given
outsourcing services globally. Overall, Aon is a capital light
structurally slower growth driven by an increasingly competitive
business with GDP+ growth, high returns and trades at a discount
environment in China. Procter & Gamble on the other hand, we
to the market on a FCF basis. We also changed our positioning
see improving organic growth (growth should improve as P&G
within asset managers, brokers and exchanges by eliminating our
benefits from more focused investments behind a structurally
position in BlackRock and starting new positions in Charles
faster growing set of categories post brand rationalization)
Schwab and Blackstone. Schwab has generated better relative
supported by significant P&L flexibility (additional cost savings
growth than BlackRock, offers asset sensitivity without the credit
opportunity and lessening FX headwinds) leading to limited risk of
risk and exposure to the secular growth of retirement and
meaningful downward earnings revisions, with a valuation that is
independent advisors. With Blackstone, the alternative asset
attractive relative to consumer staples. We also sold our position in
management industry is attractive (high returns due to low capital
Blue Buffalo Pet Products as strong performance made the
intensity, strong FCF generation, accelerating AUM growth and
risk/reward less compelling, and Coca-Cola. The investment thesis
lower fee pressures and market share pressures relative to
on Coca-Cola had been that after the bottler refranchising, the
traditional asset managers) and Blackstone's superior brand,
company would become a higher margin, less volatile, higher
people and process drives long term outperformance. In addition,
ROIC business, thus deserving of a higher multiple. While this is
the diversity of the firm (Blackstone is the only firm with scale in
still the case, the market seems to be giving Coca-Cola credit for
real estate, private equity, hedge funds and credit) should create
this improvement through a higher current valuation. Finally, we
less cyclicality in earnings relative to peers and is trading at an
started a new position in Molson Coors Brewing. Molson Coors is
attractive valuation for a best in class asset manager.
more reasonably valued relative to peers and offers cost synergies associated with the pending Miller transaction. In addition, Molson
Finally, we changed our positioning in REIT's by eliminating
remain underweight the electronics/semiconductor industry and we
Ventas (less compelling risk/reward) and starting new positions in
exited our position in Analog Devices on valuation concerns.
Tanger Factory Outlet Centers and STORE Capital. We believe Tanger can compound AFFO/share growth mid-high single digits,
Within telecom, we continue to favor cable and towers at the
in-line with the industry, but trades at a sizable discount to
expense of telephone services. Within telephone services, we
mall/outlet peers. STORE is a triple net lease REIT (tenant pays
favor Verizon Communications over AT&T given Verizon's superior
base rent plus operating expenses, property taxes and insurance)
collection of assets and lower valuation. We also continue to favor
that is focused on non-investment grade, middle market retail
the tower companies although we swapped our position in
tenants (primarily single tenant properties including chain
American Tower into SBA Communications. The stocks are now
restaurants, supermarkets, drug store and other retail). It is run by
trading near parity versus a long history of SBAC trading at a
an experienced management team, has offensive and defensive
premium. In addition, SBAC has faced a number of topline
qualities and trades at an attractive valuation.
headwinds that should dissipate later this year, and is most exposed to an uptick in US carrier activity which is likely to come in
Within health care, we exited our position in Endo International on
2017 with carrier deployment of newly purchased spectrum.
concerns around generic pricing, increasing leverage and uncertain organic growth resulting in an underweight to
Looking forward, we believe it is extremely difficult to make equity
pharmaceuticals. We are also underweight biopharma due to a
investment decisions based on predictions around economic
lock of new product cycles and we favor the healthier organic
growth, interest rates, commodity prices or currency movements.
growth stories in Celgene and Alexion Pharmaceuticals.
And you can now add in political events. As a result, we build the
Elsewhere, we continue to favor medical equipment as we have
portfolio stock by stock and we will continue to seek out investment
found a mix of medical equipment and supplies companies that
opportunities that can drive strong performance over the long term.
offer a combination of growth (driven by favorable long-term
As financial conditions tighten, revenues and profits will likely
demographic trends that should drive volumes, favorable mix shift,
become more variable, and we anticipate equity returns dispersion
new product launches and a focus on innovation, and penetration
to increase and stock selection to become a larger contributor to
in faster growing markets), high or improving relative market share,
active returns. In fact, we have seen a weakening of the profit
expanding margins, strong free cash flow generation, prudent
cycle. The drag on profits seems to be coming from several
capital deployment and stock prices trading at attractive
sources, excess global manufacturing capacity, particularly in
valuations. We added to our exposure with a new position in
China, slowing capital expenditures and tepid consumer demand.
Zimmer Biomet Holdings. Zimmer Biomet is trading at an attractive
The uncertainty produced by Brexit may present an additional
valuation and we believe the business/end markets are stabilizing,
headwind to global profits. As a result, we expect investors to shift
improving FCF can drive significant de-levering and there is little to
their focus towards the durability of earnings and to reward higher
no near term deal risk. While we are not trying to make a call on
quality companies with sufficient operating cushion and pricing
the HMO group, we are cognizant of the wide deal spreads,
reasonable valuations and stable fundamentals that could continue
to make these good stocks for the foreseeable future and as a result maintain market weight exposure.
Within technology, given a changing technology landscape we are
avoiding certain large cap legacy technology companies with slowing growth including IBM and Intel. However, we are cognizant that this positioning results in an underweight to value tech. As a result, we have been analyzing the value tech landscape and recently added to our positions in Cisco and Hewlett Packard Enterprise. We are overweight the internet space owing to the massive secular shift underway. For example, time spent on the internet now exceeds time spent watching TV, which provides companies such as Google a huge opportunity to monetize this trend. We remain overweight business services, with a mix of generally high quality, durable companies. We made a swap within computer software, selling Qlik Technologies after private equity firm Thoma Bravo agreed to take the business intelligence software company private and started a new position in Akamai. Akamai provides cloud services for delivering, optimization and securing online content and applications through its global network of 200,000 servers across 120 countries. We favor Akamai's competitive positioning (3x the largest competitor), recurring subscription revenue, emerging security business (15% of revenues growing 40%) and ability to benefit from the secular shift of online traffic. After underperformance in the past year, we were able to purchase at a more reasonable valuation. Finally, we
This fact sheet has been prepared by BT Investment Management (Fund Services) Limited (BTIM) ABN 13 161 249 332, AFSL No 431426 and the information contained within is current as at the date
of this fact sheet. It is not to be published, or otherwise made available to any person other than the party to whom it is provided.
BTIM is the responsible entity and issuer of units in the BT Wholesale American Share Fund (Fund) ARSN: 087 594 509. A product disclosure statement (PDS) is available for the Fund and can be
obtained by calling 1800 813 886 or visiting www.btim.com.au. You should obtain and consider the PDS before deciding whether to acquire, continue to hold or dispose of units in the Fund. An
investment in the Fund is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested.
This fact sheet is for general information purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient's personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation.
The information in this fact sheet may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information in this fact sheet is complete and correct, to the maximum extent permitted by law neither BTIM nor any company in the BTIM group accepts any responsibility or liability for the accuracy or completeness of this information.
Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Where performance returns are quoted "Post fees" then this assumes reinvestment of
distributions and is calculated using exit prices which take into account management costs but not tax you may pay as an investor. Where performance returns are quoted "Pre fees and tax", they
exclude the effects of management costs and any taxes. Past performance is not a reliable indicator of future performance.
If market movements, cash flows or changes in the nature of an investment (e.g. a change in credit rating) cause the Fund to exceed any of the investment ranges or limits specified, this will be rectified by BTIM as soon as reasonably practicable after becoming aware of it. If BTIM does so, it will have no other obligations in relation to these circumstances. The procedures, investment ranges, benchmarks and limits specified are accurate as at the date of this fact sheet and BTIM reserves the right to vary these from time to time.
BT® is a registered trade mark of BT Financial Group Pty Ltd and is used under licence.
Casulari et al. Diabetology & Metabolic Syndrome (2015) 7:65 DIABETOLOGY & Effects of caloric restriction and low glycemicindex diets associated with metformin on glucosemetabolism and cortisol response in overweight/obese subjects: a case series study Luiz Augusto Casulari1,5*, Donatella Dondi2, Fabio Celotti2, Fábio Vinicius Pires da Silva3,Caio Eduardo Gonçalves Reis3 and Teresa Helena Macedo da Costa4
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