Institutional Monthly Update

Performance Review

Plato Australian Shares Enhanced Index Composite (gross of fees and expenses) outperformed the S&P/ASX300 Accumulation Index by 0.26% in October. The largest contributors to active performance included overweight positions in Ramelius, Super Retail and Perseus as well as underweight positions in Liontown and Mirvac. However, overweight positions in Mineral Resources, Pilbara Minerals and Independence Group as well as underweight positions in Fortescue and Washington H Soul Pattinson detracted from relative performance. The strategy has tracked 0.74% p.a. ahead of its benchmark since inception and delivered an information ratio of 0.8.

Plato Australian Shares Tax-Exempt Composite (gross of fees and expenses) outperformed the S&P/ASX200 Accumulation Index (post franking credits) by 0.39% in October whilst achieving greater than 20% lower carbon intensity exposure than the benchmark. The largest contributors to active performance include overweight positions in BHP, Fortescue and Northern Star as well as underweight positions in Liontown and Allkem. However, overweight positions in Mineral Resources, Independence Group and Pilbara Minerals as well as underweight positions in Rio Tinto and Evolution detracted from relative performance. The strategy has tracked 1.56% p.a. ahead of its benchmark since inception and delivered an information ratio of 0.8.

Plato Australian Shares Income Composite (gross of fees and expenses) outperformed the S&P/ASX200 Accumulation Index (post franking credits) by 0.21% in October. The largest contributors to active performance included overweight positions in BHP and Northern Star as well as underweight positions in Liontown, Allkem and Mirvac. However, overweight positions in Independence Group and Mineral Resources as well as underweight positions in Rio Tinto, Fortescue and Evolution detracted from relative performance. The strategy has tracked 1.79% p.a. ahead of its benchmark since inception, with an information ratio of 0.9.

Plato Australian Shares Low Volatility Income Composite (gross of fees and expenses) outperformed the S&P/ASX300 Accumulation Index (post franking credits) by 0.58% in October. The largest contributors to active performance included an overweight position in Spark as well as underweight positions in Liontown, APA, IGO and Pilbara Minerals. However, overweight positions in TechnologyOne and Transurban as well as underweight positions in Fortescue, BHP and Northern Star detracted from relative performance. The strategy has delivered a 23% higher Sharpe ratio than that of the market since inception and has tracked 0.30% p.a. above its benchmark since inception in March 2013.

Plato Global Shares Low Carbon Enhanced Composite (gross of fees and expenses) posted a total return of -0.76%, exceeding a weak benchmark, down -1%.  The Fund continues to outperform since inception, while also achieving its carbon reduction targets.  The Fund delivered a significant reduction in carbon exposure, reducing both carbon intensity (-75.1%) and carbon footprint (-75.2%) versus the index. Low carbon intensive names broadly outperformed in October, providing a small tailwind for the strategy.  Positive stock selection increased this relative outperformance.  The Funds’ largest positive contribution to relative return came from exposures in Energy and Healthcare, including Equinor ASA and Novo Nordisk.  Previous strong performance from the exclusions reversed, with underweights to Exxon Mobil Corp and Chevron Corp benefitting the fund.  Plato’s proprietary approach seeks to lower the Fund level carbon exposure, whilst identifying stocks that perform strongly.

The Plato Global Shares Income Composite (gross of fees and expenses) returned -0.40% (after fees), outperforming a weak benchmark, which fell -1%. Value stocks slightly outperformed their growth counterparts, creating a small tailwind for the strategy (MSCI World Growth -2.6%, MSCI World Value -2.4% in USD).  The Fund benefitted from strong stock selection in the US and Norway, overcoming a detraction from Israel, where escalating tension resulted in it being the worst absolute performing country in the index.  From a sector perspective, the main outperformance came from Health Care and Energy.  Positive stock selection in the Health Care sector was again driven by UnitedHealth Group Inc.

The Plato Global Alpha Strategy (gross of fees and expenses) delivered a return of 0.56% (after fees) in October versus the MSCI World benchmark of –1.02%. The Fund has outperformed the MSCI World benchmark by 11.23% per annum since inception, beating the benchmark in 87% of rolling quarters. The Fund is now up 25% year to date. The upside capture is 1.21 and the downside capture is 0.76. The MSCI World index continued the September decline as 10 year treasuries levels flirted with the 5% barrier. The Treasuries sell-off is now the most severe since 1787. Equity markets were roiled as Hamas launched attacks inside Israel. Unprofitable technology companies were again hammered along with companies with high growth and low margins. Bond proxies and expensive defensives did well. Key stock contributors year to date include NVIDIA, Broadcom, and Novo Nordisk up 205%, 85% and 80% respectively.

DISCLAIMER

This communication is prepared by by Plato Investment Management Limited (‘Plato’) (ABN 77 120 730 136, AFSL 504616) as the investment manager of the Plato Australian Shares Enhanced Index Strategy, Plato Australian Shares Tax-Exempt Strategy, Plato Australian Shares Income Strategy, Plato Australian Shares Low Volatility Income Strategy, Plato Global Low Carbon Strategy, Plato Global Shares Income Strategy. The information in this communication is intended for wholesale investors only. This communication is for general information only. It is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice before doing so. Past performance is for illustrative purposes only and is not indicative of future performance.

Any opinions and forecasts reflect the judgment and assumptions of Plato and its representatives on the basis of information available as at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future.

Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this communication is prohibited without obtaining prior written permission from Plato. Pinnacle Investment Management Group Limited (‘Pinnacle’) ABN 22 100 325 184 and its associates may have interests in financial products and may receive fees from companies referred to during this communication.