Karyn West

Independent investment research house, Lonsec, has awarded a ‘Recommended’ rating to the Apostle Dundas Global Equity Fund (the Fund).

The Fund is focused on sustainable dividends from long-term investment in global equities across developed and emerging markets.

Investment manager Dundas Global Investors (Dundas) aims to build a diversified portfolio of between 60-80 stocks with sustained business and dividend growth to achieve long-term capital growth. Strong qualitative and financial research and analysis underpins the Dundas investment criteria. The Fund has typically outperformed in weaker markets and underperformed in strongly rising markets.

The firm’s Senior Partner, Alan McFarlane, explains, “We pick stocks capable of sustained dividend growth and avoid the majority that aren’t. Our companies provide products and services bought by more customers year after year. Rising sales produce increased profit and cash flow which is applied first in reinvestment for future growth and second to pay each year’s dividends. Good companies run by excellent boards and management make repeated good capital allocation decisions, avoiding unnecessary financial risk to reduce the risk of dividend cuts. Consistent reinvestment by growing companies is the foundation for future dividend growth and our strategy’s success.

“In 2020 global dividends suffered a 13% reduction – just under $175 billion – with the cuts concentrated in industries most affected by lockdown and others that struggled because of changing demand patterns and / or poor capital allocation decisions. Avoiding those industries and companies was key to our recent results. COVID-19 exposed the difference between sustainable businesses and the rest.” Mr McFarlane said.

“Dividend growth investing is often confused with investing for high-yield but they are chalk and cheese. 2020 exposed the difference between on the one hand companies capable of sustained dividend growth because of the industries they operate in and the way they are managed and, on the other, over-distributing companies whose high yields signal their lack of opportunity to reinvest for future growth. Sustained dividend growth coupled with sound corporate financial governance are the keys to why dividend growth portfolios play defence well.” Mr McFarlane added.

The Fund’s Recommended rating can be attributed to the highly experienced professionals from both Dundas and Apostle Funds Management.

Karyn West, Managing Director, Apostle Funds Management (AFM) said, “During 2020, the best dividend policy for most companies was to hold cash to fund their business during the tough times experienced in a pandemic environment. Ordinarily Dundas likes to primarily see Boards allocating profits to help grow the business and then subsequently reward shareholders with a sustainable dividend year-on-year.

“Finding businesses that have good return on equity, good margins and pricing power are important as global economies find their feet within the challenges of the pandemic,” Ms West said.

Ms. West welcomed Lonsec’s Recommended rating as positive affirmation for the Fund, AFM and its global equity partners Dundas. “Our key focus at AFM is to provide investment strategies that meet a genuine client need. Advocating for clients’ interests and finding best-of-breed investments from around the world is at our core.”

Ms. West concluded: “We are pleased to be building strong momentum in providing targeted, hand-picked investment opportunities for our clients. Partnerships with quality asset managers like Dundas enable us to support client objectives via access to bespoke product solutions.”

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Karyn West

Apostle Funds Management is pleased to announce the launch of a new Exchange Traded Quoted Managed Fund on the 24th February, 2021, to sit alongside its current Managed Investment Trust. The Fund will be named the Apostle Dundas Global Equity Fund with ASX code ADEF.

Dundas Partners LLP, an Edinburgh based global equity manager founded in 2012, is well known in the institutional market with assets under management of approximately US$1.5 billion. Their investment strategy has delivered a long and successful track record and the launch of this exchanged traded offering will allow all participants within Australian and New Zealand financial services to access this high-quality manager on an intra-day basis with full liquidity.

The investment strategy has delivered gross returns of 14.97% over 3 years and 13.20% over 5 years as of 31 December 2020, placing it as one of the top performing Global Equity Funds over the long term.

About the Fund

Dundas focus on the factors that drive long-term total returns – dividend growth plus dividend yield. These factors result in a portfolio exhibiting total compound annual growth of around 10%. They employ fundamental bottom up research with a portfolio that has delivered capital preservation and good downside protection.

The Fund will have a management fee of 0.90%, well below the category median of 1.35% 2 . Further, there will be no performance fee included.

The Fund may be suitable for investors who are seeking long term risk adjusted returns within the global equity part of their portfolio either as an alternative for a current global growth strategy or to increase diversification in a portfolio overweight in Australian equities.

K2 Asset Management (K2AM) has been selected as our partner who have a strong track record in operating actively traded quoted managed Funds with both domestic and global equity mandates.

Alan McFarlane, Senior Partner of Dundas Partners commented; “Dundas Partners are very pleased that our global equity portfolio will now be readily available to SMSF, IFAs, and the wealth management groups in Australia through the easy access of an Exchange Traded Vehicle.”

Karyn West MD of Apostle Funds Management; “We are pleased to bring a high-quality manager with a market leading product in an ETF format. It is a fully active portfolio of high-quality companies with sustainable dividends and is well priced for our market. In addition, this portfolio has been highly rated on its ESG merits”

Campbell Neal, Chairman and CEO of K2AM commented; “This is a natural partnership with both Apostle Funds Management and Dundas Partners to operate and monitor the new global equity actively traded ETF. We feel privileged to partner with a world class investor like Dundas Partners and pleased to offer our expertise with the listed market for the ETF.”

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Karyn West

Apostle Funds Management is pleased to announce the launch of a new Exchange Traded Quoted Managed Fund early this year, to sit alongside the current Managed Investment Trust. The Fund will be named the Apostle Dundas Global Equity Fund.

Dundas Partners LLP, an Edinburgh based global equity manager founded in 2012, is well known in the institutional market with assets under management of approximately US$1.5 billion. Their investment strategy has delivered a long and successful track record and the launch of this exchanged traded offering will allow all participants within Australian and New Zealand financial services to access this high-quality manager on an intra-day basis with full liquidity.

The investment strategy has delivered net returns of 14.97% over 3 years and 13.20% over 5 years as of 31 December 2020, placing it as one of the top performing Global Equity Funds over the long term.

About the Fund

Dundas focus on the factors that drive long-term total returns – dividend growth plus dividend yield. These factors result in a portfolio exhibiting total compound annual growth of around 10%. They employ fundamental bottom-up research with a portfolio that has delivered capital preservation and good downside protection.

The Fund will have charge total management fees and costs of 0.90%, well below the category median of 1.35% ^[2] . Further, there will be no performance fee included.

The Fund may be suitable for investors who are seeking long term risk adjusted returns within the global equity part of their portfolio either as an alternative for a current global growth strategy or to increase diversification in a portfolio overweight in Australian equities.

K2 Asset Management (K2AM) has been selected as our responsible entity who have a strong track record in operating actively traded quoted managed Funds with both domestic and global equity mandates.

Alan McFarlane, Senior Partner of Dundas Partners commented; “Dundas Partners are very pleased that our global equity portfolio will now be readily available to SMSF, IFAs, and the wealth management groups in Australia through the easy access of an Exchange Traded Vehicle.”

Karyn West MD of Apostle Funds Management; “We are pleased to bring a high-quality manager with a market leading product in an ETF format. It is a fully active portfolio of high-quality companies with sustainable dividends and is well priced for our market. In addition, this portfolio has been highly rated on its ESG merits”.

Campbell Neal, Chairman and CEO of K2AM commented; “This is a natural partnership with both Apostle Funds Management and Dundas Partners to operate and monitor the new global equity actively traded ETF. We feel privileged to partner with a world class investor like Dundas Partners and pleased to offer our expertise with the listed market for the ETF.”

The ETF is set to launch early this year.

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[1] Source: State Street Performance & Analytics Australia. Fund performance calculated using exit prices and shown on a total return basis (net dividends reinvested). Performance inception date is 4th June 2015. Past performance is not a reliable indicator of future performance.
[2] ASX, Bloomberg., IIR; As at Oct 2020. Past performance and fees is not a reliable indicator of future performance and fees.

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Equity trustees launches new global equities fund.

With growing interest in global equities from Australian investors, the Equity Trustees Dundas Global Equity Fund is now available for investment on the BT Wrap and Asgard platforms.

The fund, which takes a long-only position in 60 to 70 companies with a minimum market cap of US$1 billion, is managed by Edinburgh-based Dundas Global Investors and distributed in Australia by Equity Trustees Limited.

David Myers, national sales manager at Equity Trustees Funds Distribution, said over the past 12 months there has been a clear increase in the level of interest in global equities, from both financial advisers and their clients.

“As a result, we have arranged with BT Wrap and Asgard to open the Equity Trustees Dundas Global Equities Fund to retail investors to meet this growing demand.

“Advisers we have spoken with have told us they are seeking to position their clients’ portfolios to benefit from growth in markets such as the US and China, as well as ensuring they are not over-exposed to Australian equities in the current economic environment.

“With many investors still focused on income, the Equity Trustees Dundas Global Equity Fund can help create a stable, regular return for investors thanks to its focus on sustainable long-term dividend and book value growth.

“This approach is particularly attractive to investors who want exposure to global equities without taking on a high level of risk,” Mr Myers said.

Mr Alan McFarlane, senior partner and founder at Dundas Global Investors, said that investors in international equities will need to pick and choose carefully in 2014.

“We saw a strong rally in 2013 in developed market equities.

“As a result, equity markets are at valuation levels susceptible to a correction, and investors should ensure they are invested in companies with a strong and sustainable return on equity as well as cash generation and internal re-investments, in order to achieve future dividend and book value growth.

“Although inflation appears to offer little threat to markets, global equities would probably have a nasty reaction to further US rate rises, and this makes it even more important that any investments in global equities are made on the basis of fundamentals, rather than expectations of across-the-board market growth,” Mr McFarlane said.

As well as opening on the BT Wrap and Asgard platforms, the Equity Trustees Dundas Global Equity Fund has recently received a ‘Recommended’ rating from Lonsec*. It has an ‘A’ rating from van Eyk and an ‘Approved’ rating from Zenith**.

Dundas Global Investors was established in Edinburgh in August 2010. Dundas is an independent partnership with their own assets invested alongside clients. Dundas offer a single strategy to investors; global equities to achieve real capital and dividend growth. Dundas has seen significant growth last year, with the strategy receiving another mandate, for $240 million, from a large Australian superannuation fund in December last year, taking total funds under management to over $500 million.

The fund aims to exceed the MSCI All Country World Index (excluding Australia) by 2.5% p.a. over rolling five year periods after fees.

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