Institutional Monthly Update

Performance Review

Plato Australian Shares Enhanced Index Composite (gross of fees and expenses) outperformed the S&P/ASX300 Accumulation Index by 0.05% in December. The largest contributors to active performance included overweight positions in JB Hi-Fi and Technology One as well as underweight positions in Seek, ANZ and Reece. However, overweight positions in Ventia Services, Northern Star and Life360 as well as underweight positions in Mesoblast and Transurban detracted from relative performance. The strategy has tracked 0.87% p.a. ahead of its benchmark since inception and delivered an information ratio of 0.9.

Plato Australian Shares Tax-Exempt Composite (gross of fees and expenses) outperformed the S&P/ASX200 Accumulation Index (post franking credits) by 0.33% in December whilst achieving greater than 20% lower carbon intensity exposure than the benchmark. The largest contributors to active performance included overweight positions in Coles and Origin Energy as well as underweight positions in BlueScope Steel, Seek and South32. However, overweight positions in Car Group, Ventia Services and Northern Star as well as underweight positions in Woolworths and Santos detracted from relative performance. The strategy has tracked 1.34% p.a. ahead of its benchmark since inception and delivered an information ratio of 0.7.

Plato Australian Shares Income Composite (gross of fees and expenses) outperformed the S&P/ASX200 Accumulation Index (post franking credits) by 0.41% in December. The largest contributors to active performance included overweight positions in Origin Energy and Technology One as well as underweight positions in BlueScope Steel, Seek and South32. However, overweight positions in Ventia Services, Northern Star and Car Group as well as underweight positions in Wesfarmers and Santos detracted from relative performance. The strategy has tracked 1.65% 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 1.21% in December. The largest contributors to active performance included overweight positions in Perenti, Telstra and Origin Energy as well as underweight positions in ANZ and James Hardie. However, overweight positions in Ventia Services, Orica and Regis Healthcare as well as underweight positions in Woodside Energy and Mesoblast detracted from relative performance. The strategy has delivered a 20% higher Sharpe ratio than that of the market since inception and has tracked 0.11% p.a. ahead of its benchmark since inception in March 2013.

Plato Australian Defensive Income Composite (gross of fees and expenses) outperformed the S&P/ASX200 Accumulation Index (post franking credits) by 0.35% in December. The largest contributors to active performance included overweight positions in JB Hi-Fi and Qantas as well as underweight positions in James Hardie, Car Group and BlueScope Steel. However, overweight positions in Ventia Services, Northern Star, Zip and Alcoa as well as an underweight position in Woolworths detracted from relative performance. The strategy has tracked 0.28% p.a. ahead of its benchmark since inception.

Plato Global Shares Low Carbon Enhanced Composite (gross of fees and expenses) delivered a significant reduction in carbon exposure, reducing both carbon intensity (-75.4%) and carbon footprint (-75.2%) versus the index. The Fund posted a total return of 2.97% in December, outperforming the benchmark by 0.40%. This ends a strong year, with the fund outperforming the index by 1.99% in 2024. In December, low-carbon intensive stocks continued to outperform, providing a significant tailwind for the Fund. The outperformance was largely driven by strong stock selection across key sectors, primarily Financials, Energy, and Consumer Discretionary. At the country level, half of the Fund’s outperformance came from US-based names, with additional strong contributions from Canada, the UK, and Italy.  At the individual stock level, the main positive contributors were overweights in Alphabet and Sony Group. Underweights due to Fund exclusions in the underperforming energy sector, including Chevron Corp and Exxon Mobil, further added to the Fund’s positive relative performance.

The Plato Global Shares Income Composite (gross of fees and expenses) returned 3.43% in December, strongly outperforming the benchmark by 0.86%. This ends a positive year, with the fund outperforming by 1.81% in 2024.  Through December yield was not rewarded, with non-dividend payers broadly outperforming dividend paying companies.  Despite this the fund generated alpha, with positive contributions from stock selection in some low and high yielding segments of the market.  Over the month the Funds’ most significant positive contribution to active return came from alpha seeking exposures in Industrial and Energy companies.  At the stock level the most positive contribution came from Singaporean industrial, Yangzijang Shipbuilding.  The Fund continued to generate strong excess income.  From a country perspective the drivers were the United States and Japan.  At the sector level income was driven by Financial and Real Estate companies.  Stock examples of these exposures include US Financial, CME Group, and Real Estate business, Simon Property Group.

The Plato Global Alpha Strategy (gross of fees and expenses) delivered an impressive return of 4.1% in December, outperforming the MSCI World benchmark, which rose 2.5%. Since inception, the Fund has achieved an annualised return of 26.3% after fees, outperforming the benchmark by 14.0% per annum and delivering positive relative performance in 92% of rolling quarters. Our upside capture ratio stands at 127%, while the downside capture is just 74%, underscoring our strong risk-adjusted performance. The Fund is now ranked 2nd out of 262 funds in the Morningstar World Large Cap universe since inception and has grown to $362 million in assets under management. On 25th of November we launched a complex ETF version of the Plato Global Alpha Fund under the ticker PGA1.

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 Australian Defensive Income Composite, 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.