September 2021

In the month of September, the portfolio fell 1.3%, and outperformed the benchmark (S&P/ASX Small Ordinaries Accumulation Index) by 0.8%.

During the month there was limited news as most companies had already reported. Audinate (AD8) released its annual report during the month, highlighting that the business continues to improve despite Covid-19 impacts. EBITDA turned positive, but the group still recorded a net loss for the year. We remain positive on the company’s dominance in the audio/visual space. Integral Diagnostics (IDX) made a small purchase that was EPS accretive and we continue to see defensive value in this company.

Attribution

It was another strong month for MNF Group (MNF) with the stock contributing the most to this month’s performance. Laserbond (LBL) recouped almost all the losses from last month, followed by Baby Bunting (BBN). The later, we believe to have significant tailwinds into next year as leading indicators suggest an increase in newborns. Praemium (PPS) fell the most during the month, followed by Omni Bridgeway (OML) and then Netwealth (NWL).

Investment Exposures

We aim to achieve superior returns to the ASX Small Ordinaries Accumulation Index. We are achieving this with our large exposure to technology companies which have significant global growth prospects, benefit from the disintermediation of financial services or hold large established positions within the Australian marketplace.