Commentary Month to 30 June 2018 | Surrey Australian Equities Fund Investment

June marked the first month for the Surrey Australian Equities Fund (The Fund).  Over the month our benchmark, the Small Ordinaries Accumulation Index (XSOAI.ASX) increased by 1.06% which capped off a very strong annual increase of 24% for FY18.

The Fund is committed to investing strictly in accordance with our investment process as we aim to achieve both absolute and relative outperformance.  As such in our opening month we elected to gradually deploy the initial cash holding, only buying where attractive opportunities were evident as opposed to investing all the capital day one.  By month end we had 78% of The Fund invested in equities across 24 individual stocks.

Despite the large average cash balance we held over the month, we were pleased with our ability to generate positive absolute returns of 0.88% after fees, broadly in line with the benchmark’s return.  This reflects the high-quality nature of the investments we have made to date and highlights our intent to deliver consistent risk adjusted performance.

This month we share with you insights from inside the portfolio where we believe there could be further potential upside and where we observe clear value latencies.

We hope you enjoy the inaugural investment commentary.

As always both Nick and Michael are available at any time and we thank you for your support as founding investors.
Nick Maclean & Michael Woolhouse
Directors & Portfolio Managers

Surrey Asset Management