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The Fund is an open ended, unlisted unit trust investing predominantly in ASX listed companies. Hybrid, debt & unlisted investments are also considered. The Fund is focused on investing in growing or strategic businesses and generating returns that, to the extent possible, are less dependent on the direction of the broader sharemarket. The Fund may at times change its cash weighting or utilise exchange traded products to manage market risk.
Investments will primarily be made in micro-to-mid cap companies listed on the ASX. Larger listed businesses will also be considered for investment but are not expected to meet the manager's investment criteria as regularly as smaller peers.
In March, the fund's best performed holdings were the largest and more liquid: Omni Bridgeway (OBL) and EML Payments (EML). Equitable added that the Fund underperformed benchmarks like the S&P/ASX Small Ordinaries and Emerging Companies indices that are weighted to more liquid investments - and unlike the Fund they also feature a material exposure to the resources sector, which had a strong month.
The portfolio holdings that made positive contributions in the quarter were generally those with a track record of profitability, such as Earlypay (EPY), Omni Bridgeway (OBL), Pental (PTL) and Reckon (RKN). Three of the four of those names have market caps greater than $100m (OBL is just shy of $1 billion, PTL is the odd one out at ~$70m).
At the other end of the spectrum, three of the four worst performed investments for the quarter had market caps less than $50m. The volume of shares traded declined by at least 50% for each of these four names when comparing the March 2022 quarter with the December 2021 quarter - and volume for three of the four was at least 40% lower compared to the prior March quarter. Equitable emphasised their view that liquidity is a double-edged sword and in this quarter it hurt their mark-to-market NAV pricing.