Harbour Asset Management Equity Funds
This one is a bit more a 'boutique manager', although they do have a shareholder called Jardens (77.57% owned by them in fact). Share funds available for investment are as follows:
1/ Harbour Australasian Equity Fund:
Investment Theme |
The Fund is actively managed and invests in stocks which our equity team believes will outperform the local equity market over the long term. Stocks are chosen through a combination of qualitative bottom-up company research undertaken by our in-house analysts, environmental, social and governance (ESG) integration and quantitative screening of factors such as growth and quality. |
Currency Hedging Policy |
ASX component 90%-95% hedged to the NZD |
Top ten holdings |
MFT, FPH, EBO, CEN, MEL, SUM, PEB, IFT, CSL Limited Australia (drug maker), and AIA. The top ten positions make up 55.8% of the fund. The fund currently has 29.3% of assets invested in Australian equities. |
Distribution over FY2022: |
none. |
Total management annual charge |
= 1.1% (plus a performance fee of 0%). |
Fund size |
$248.6m @31-03-2022. |
Fund risk rating |
5 |
2/ Harbour Australasian Equity Focus Fund:
Investment Theme |
The Focus Fund is actively managed and only invests in stocks which are rated highly by our in-house research analysts. The team use their in depth company and industry research to rate and pick stocks which they strongly believe will add positively to the Fund. |
Top ten holdings: |
MFT, Macquarie Group Limited Australia (investment banking), EBO, CSL Limited Australia (drug maker), BHP Group, Australia (Mining), SUM, PEB, Xero Limited (Accounting Software), Goodman Group Australia (logistics management and development), Vulcan Steel Limited Australia. The top 10 investments make up 62.9% of the funds value. The fund currently has 54.56% of assets invested in Australian Equities. |
Currency Hedging Policy |
ASX component 90%-95% hedged to the NZD |
Distribution over FY2022: |
none. |
Total management annual charge |
= 1.70% (which includes a 0.53% performance fee). |
Fund size |
$35.2m @31-03-2022. |
Fund risk rating |
6 |
3/ Harbour NZ Shares Index fund:
Investment Theme |
Track the NZX50 Portfolio Index. This index contains the top 50 companies listed on the NZX, but with a 5% cap on each company. |
Top ten holdings |
AIA, EBO, MFT, FBU, IFT, CEN, MEL, SPK, FPH and ATM. These holdings make up 48.9% of the fund. |
Distribution over FY2022 |
2.28cpu (based on a unit price @05-05-2022 of 2.013 and a 28% tax rate, this is a gross yield of 1.39%) |
Total management annual charge |
= 0.2% |
Fund Size |
$382.4m @31-03-2022. |
Fund risk rating |
5. |
4/ Harbour Sustainable NZ Shares Fund:
Investment Theme |
Tracks NZX50 index, but excludes companies that are exposed to large carbon emitters, alcohol, gambling, munitions, adult entertainment, nuclear armaments, firearms, tobacco and recreational cannabis, child labour and companies with human and animal right violations. There will also be positive and negative tilts to the remaining companies based on Harbour’s proprietary Corporate Behaviour Score, which has been a core part of Harbour's equity investment processes for over a decade. |
Top ten holdings |
AIA, MFT, CEN, EBO, MEL, SPK, FPH, FBU, IFT, ATM, making up 54.1% of the asset value of the fund. |
Distribution over FY2022: |
0.72cpu (based on a unit price of 0.9251@05-05-2022 and a tax rate of 28%, this is a gross yield of 1.08%) |
Total management annual charge |
= 0.25% |
Fund Size |
$186.0m @31-03-2022 |
Fund risk rating |
5 |
5/ Harbour Real Estate Investment Fund:
Invrestment Themes |
As well as holding listed Property Sector funds, the Fund may also hold securities which are not included in listed property security or Real Estate Investment Trusts (REITS) benchmark indices. To be included, underlying profit certainty needs to be high. Examples include property management, sea ports, toll roads, airports, cell-phone towers, aged care & retirement villages, waste management facilities and data centres industries. |
Top ten holdings |
GMT, PCT, KPG, VHP, PFI, ARG, SPG, IPL, Goodman Group (Australia) (this company owns develops and manages logistic building spaces) , Charter Hall Group Australia (invests and develops office, retail, industrial & logistics and social infrastructure). These top ten businesses make up 76.9% of the asset value of the fund. |
Distribution over FY2022 |
2.01cpu (based on a unit price of 1.2476 and a tax rate of 28%, this is a gross yield of 2.24%) |
Total management annual charge |
= 0.88% |
Fund Size |
$110.4m @31-03-2022 |
Fund risk rating |
5 |
Note that I have omitted from this list the 'Harbour T Rowe' funds, that are repackaged funds from other providers. I have also excluded funds that have a non-share component.
The 'Investment Team' made up of 'Equities', 'Fixed Income' and 'Multi Asset' managers number 17 people.
SNOOPY
Tax free payments from Milford?
Quote:
Originally Posted by
Snoopy
3/
'Trans-tasman Equity Fund'
Investment Theme |
Stock picking across the NZX and the ASX |
Distribution over FY2022 |
3.0cpu |
It looks like the above is the only Milford run 'purely share based' fund that offers an income payment during the year. Looking up distributions in the FAQ lead me to this curious text:
---------------
Milford Asset Management - How Do Distributions Work?
Some of our funds pay distributions at set intervals. Distributions are a way for some of the fund’s returns to be paid out to investors, in the form of cash payments. The portfolio managers have set the distribution amounts at levels they feel are sustainable, given the current and expected future environment. The amount paid to each investor is based on the number of cents per unit held.
If you are investing into a fund that pays regular distributions but opt not to receive the cash, it will instead be reinvested and used to purchase additional units in that fund.
Distributions from the funds are non-taxable events and are not treated as income for tax purposes.
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It is the last bit that I have put in italics that intrigues me. How on earth can that be?
SNOOPY
Harbour Asset Mangement Analyst Musings
I like to try and get a flavour of how the asset mangers think. The following information from this 8th April 2022 round up.
https://www.harbourasset.co.nz/resea...ds-down-under/
1/ Harbour consider that global efforts to control inflation will be successful.
2/ In 'equity growth' Harbour are overweight in 'healthcare' and 'information technology' sectors, as these sectors look 'relatively more attractive'.
3/ Harbour thinking is that during periods of low growth coming up, it may be prudent to move away from cyclical stocks as economic activity decreases. NZ interest rates have risen faster than most. With the markets being forward looking -coupled with decreasing economic activity- that means higher interest rates, and the accompanying discounting effect on future earnings may have already done their damage on growth stock valuations.
4/ Nevertheless Harbour has made selective investments in cyclical investments with 'pricing power': The materials and financial sectors. Disruption in the global supply chain is expected to favour more locally sourced solutions on an ongoing basis.
5/ Harbour are underweight in the energy sector, where risk of disruption is high.
6/ Harbour are underweight in communications, real estate, infrastructure and utilities sectors where valuations are high relative to potential growth.
7/ Harbour has sold out of US financial sector after booking some good interest rate related gains
8/ Harbour thinks that the Australia and New Zealand region has better near term outlook than other global equity markets.
SNOOPY