Institutional Monthly Update

Performance Review

Plato Australian Shares Enhanced Index Composite (gross of fees and expenses) underperformed the S&P/ASX300 Accumulation Index by 0.19% in November. The largest contributors to active performance included were overweight positions in Perseus, GPT Group, Regis Resources and Orica as well as an underweight position in NextDC. However, overweight positions in Temple and Webster, Life360, Technology One and Codan as well as an underweight position in Pilbara Resources detracted from relative performance. The strategy has tracked 0.85% 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) underperformed the S&P/ASX200 Accumulation Index (post franking credits) by 0.11% in November whilst achieving greater than 20% lower carbon intensity exposure than the benchmark. The largest contributors to active performance included overweight positions in Perseus, Monadelphous, Orica, Newcrest and Charter Hall. However, overweight positions in AP Eagers, Macquarie and Temple and Webster as well as underweight positions in Pilbara Resources and Light and Wonder detracted from relative performance. The strategy has tracked 1.43% 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 0.12% in November. The largest contributors to active performance included overweight positions in Perseus, Orica, Monadelphous, Ramelius and Evolution. However, overweight positions in AP Eagers, Macquarie and Technology One as well as underweight positions in Pilbara Resources and Northern Star detracted from relative performance. The strategy has tracked 1.71% 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 1.31% in November. The largest contributors to active performance included overweight positions in Monadelphous and Perseus as well as underweight positions in Commonwealth Bank, Goodman Group and Macquarie. However, overweight positions in Codan and Technology One as well as underweight positions in Northern Star, Pilbara Resources and Evolution detracted from relative performance. The strategy has delivered a 20% higher Sharpe ratio than that of the market since inception and has tracked 0.32% p.a. ahead of its benchmark since inception.

Plato Australian Defensive Income Composite (gross of fees and expenses) underperformed the S&P/ASX200 Accumulation Index (post franking credits) by 0.21% in November. The largest contributors to active performance included overweight positions in Perseus, Regis Resources, Evolution, Newmont and NRW Holdings. However, overweight positions in Codan and Technology One as well as underweight positions in Northern Star, Pilbara Resources and Woolworths detracted from relative performance. The strategy has tracked 0.15% 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 (-75.3%) and carbon footprint (-74.9%) versus the index. The Fund posted a total return of 0.36% in November, beating the benchmark by 0.19%. In November, low-carbon-intensive stocks underperformed their higher carbon intensive counterparts, creating a headwind for the strategy. Despite this, the Fund outperformed the index due to the outperformance of the Momentum and Sentiment factors.  At the country level, positive contributions came from the exposures in Canada and Japan.  Strong stock selection in Health Care and Financials led sector outperformance.   At the stock level the most positive contribution came from the overweight to Lundin Gold, whilst the most significant detractor came from exclusions.

The Plato Global Shares Income Composite (gross of fees and expenses) returned 0.88% in November, outperforming the benchmark by 0.71%. In November, higher dividend yield stocks on average outperformed, providing a tailwind for the fund.  In addition to positive country allocation, the positive contribution to alpha was driven by strong stock selection in Canada, the United Kingdom and Spain.  From a sector perspective, positive stock selection in the Materials, Financials and Health Care sectors led outperformance.  This offset the Fund’s most significant negative contribution to active return, from alpha seeking exposures in Energy.  At the stock level the most positive contribution came from the exposure to Canadian materials company, Lundin Gold.

The Plato Global Alpha Strategy (gross of fees and expenses) delivered a return of 1.82% outperforming the MSCI World benchmark by 1.72%. Since inception, the Fund has achieved an annualised return of 28.41%, outperforming the benchmark by 15.55% per annum and delivering positive relative performance in 94% of rolling quarters. Plato Global Alpha’s upside capture ratio is 129%, while the downside capture is just 65%, underscoring the Fund’s strong risk-adjusted performance.

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.