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DNR Capital Australian Emerging Companies Fund

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About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/100219-2022-12-21-02:28.pdf
FUND MANAGER DNR Capital
ASX Code
APIR PIM4357AU
ASSET CLASS AUSTRALIAN EQUITIES
INVESTMENT STYLE Australian emerging companies and cash. Style neutral with a quality focus.
INVESTMENT PROFILE The Fund's investment objective is to outperform the Benchmark (net of fees) over a rolling five -year period
CURRENCY MANAGEMENT Unhedged
INCEPTION DATE 31-08-2018
BENCHMARK S&P/ASX Small Ordinaries Total Return Index
FUND SIZE S&P/ASX Small Ordinaries Total Return Index
DISTRIBUTION FREQUENCY Half-yearly
NO. OF HOLDINGS 20-45
FEES 1.15% p.a. (inclusive of GST and RITC)
STRUCTURE

Benefits

Benefits

Benefits of investing in the DNR Capital Australian Emerging Companies Fund

Investing in the Fund will give you access to the following features and benefits:

  • Access to an actively managed portfolio of emerging companies that seeks to be high conviction and invests for the medium to long term.
  • A comprehensive investment process that is based on the belief that a focus on quality emerging companies will enhance returns when it is combined with a thorough valuation overlay.
  • Investment process involves detailed company and sector research, with proprietary financial modelling and valuation analysis.
  • An experienced investment management team, with a combined investment experience of over 25 years across Australian and international equity markets.
  • Ongoing risk management is a key part of the investment process and portfolio construction, with regular monitoring and review.

Risk level

High

Investor suitability

Investors seeking a medium-to-longer term investment focused on achieving growth, with less focus on generating excess income. The investor is prepared to accept higher volatility in pursuit of higher growth.

RISK LEVEL
INVESTOR SUITABILITY

Risks

Title
Detail

Key Features

The DNR Capital Australian Emerging Companies Fund is designed for investors seeking a medium-to-longer term investment focused on achieving growth, with less focus on generating excess income. The investor is prepared to accept higher volatility in pursuit of higher growth.

Investment philosophy

DNR Capital believes a focus on quality will enhance returns when combined with a thorough valuation overlay. It seeks to identify good quality emerging businesses that are mispriced by overlaying DNR Capital's quality filter, referred to as the quality web', with a strong valuation discipline.

Investment strategy

The DNR Capital Australian Emerging Companies Fund has an investment style best described as style neutral'. The security selection process has a strong bottom-up discipline and focuses on buying quality emerging businesses at reasonable prices. The process involves comprehensive company and industry research, company visits and meetings, and detailed valuation analysis and modelling. This information is used to assess the quality of a business, and the expected return.

Quality businesses are defined as being those with the following five attributes:

  • earnings strength (particularly improving return)
  • superior industry position
  • a sound balance sheet
  • strong management
  • low environmental, social and governance (ESG) risk.

Where the security passes this quality assessment then a range of valuation methodologies are used to identify value having regard for the industry and circumstances of the business.

DNR Capital seeks to invest in businesses which offer upside to the target valuation in excess of its market forecast and sit within a defined portfolio construction framework.

Having identified securities with attractive quality and value characteristics, consideration is given to risk characteristics such as the security and sector correlations of investments.

The portfolio construction process is also influenced by a top-down economic appraisal. A range of economic indicators are reviewed regularly and these measures are used to formulate an economic overview which provides a backdrop to investment decision making and influences portfolio construction.

Investments held in the Fund are formally reviewed by the investment committee which meets monthly and is responsible for reviewing Fund performance, Fund constituents, the economic overview and internally generated reports.

While the ultimate decision rests with the investment team, the investment committee provides a mechanism of accountability.

The investment strategy of the Fund is intended to result in a concentrated portfolio that is high conviction and invests for the medium to long-term.    

Mandate

How we invest your money

Fund asset allocation

  • Australian Equities 80-100%
  • Cash 0- 20%

This provides only an indication of the intended investments of the Fund and these allocations may be exceeded or not reached from time to time. You may obtain information of the actual investment allocations of the Fund by contacting the Manager directly.

The Fund will not invest in derivatives.