The Bennelong Concentrated Australian Equities Fund has gained 29.1 per cent over the past 12 months, easily outpacing the 13.2 per cent return of its benchmark S&P/ASX 300 Accumulation Index.
The fund is a concentrated portfolio of Bennelong’s highest conviction stock ideas, and has been able to beat the market quite meaningfully and with relative consistency over the long-term.
The Fund benefited from strong returns from some of its largest holdings, saying these are high quality growth companies that proved again this quarter to have better than expected earnings prospects.
CSL Limited (ASX:CSL) is the largest position in the fund. In May, the global biopharmaceutical company announced an upgrade to its earnings guidance which implied constant currency profit growth of around 27 per cent.
Bennelong says CSL continues to spend big on research and development, building out new plasma collection centres and making other investments, something that widens its competitive moat and supports its growth profile. It continues to believe the company has better than expected earnings prospects over the foreseeable future.
Reliance Worldwide Corporation (ASX:RWC) is the second largest position in the fund. In May. it made a very significant and value accretive acquisition during the quarter, buying John Guest for $1.2 billion.
Reliance is the world’s leading manufacturer of brass push-to-connect plumbing fittings, selling predominantly into the US and Australasian markets. John Guest is the world’s leading manufacturer of plastic push-to-connect plumbing fittings, and with its headquarters in UK, it sells mainly into European markets.
Bennelong says the John Guest acquisition is expected to be at least 30 per cent accretive to earnings per share, after accounting for synergies.
Aristocrat Leisure Limited (ASX:ALL), the slot machine manufacturer and online social games developer, saw its share price jump higher in May after announcing first half results that beat expectations.
Aristocrat grew revenues and profits both by approximately 33 per cent, the growth
underpinned by strength in its online social games business, where two recent acquisitions proved their worth, and which business now boasts over eight million daily active users.
The company guided to continued aggressive investment in new product design and development, as well as to continuing strong profitability over the next 12 months.