Contact Australian Ex-50 Fund

Description

The Contact Australian Ex-50 Fund balances growth and income to provide access to a concentrated portfolio of quality Australian companies that sit outside the S&P/ASX 50 Index. This strategy seeks to find long term investments in tomorrow’s leaders. Derivatives, short selling and gearing will not be used. The strategy applies Contact’s long term focused investment philosophy.

Objective

The Fund’s investment objective is to seek to achieve strong relative returns in excess of the 10% Target Return, through a concentrated portfolio of high quality small to medium sized ASX listed companies.

Fund Information

Target ReturnTotal Return of 10.0%pa (net of fees)
APIR code or ticker code
EVO4741AU
Investment ObjectiveThe Fund’s investment objective is to seek to achieve strong relative returns in excess of the 10% Target Return, through a concentrated portfolio of high quality small to medium sized ASX listed companies.
Distribution Frequency Semi-annually
Inception dateMarch 2020
Management Fee0.60% per annum (excluding GST) of the net asset value of the Fund (after any current accrued Management Fees and expenses).
Performance FeeNil
Lonsec RatingInvestment Grade (Disclaimer)
Responsible Entity / Administrator
Evolution Trustees / Mainstream
Years managing the asset class20
Assets managed in the sector$1.7bn
Portfolio ManagersWill Culbert (Lead Portfolio Manager)
Tom Millner
Size of Investment Team5
Investment style
Quality / Income
Typical capitalisation bias
Mid Cap / Small Cap
Typical stock numbers
20 – 40
Stock limit
10% in any one stock (soft limit)
Sector Limits
30% (soft limit)
Expected turnover
Low
Cash range
10% (soft limit)
Stocks in universe
250
Other restrictionsNo gearing or short selling

Why Invest?

Many Australian Equity investors hold a large allocation of their wealth in traditional Large-Cap companies. At the larger end of the market, and especially in the Top 20, the Index is heavily weighted towards financials which is largely made up of banks. For others there may be direct investments with the ability and access Micro-Cap, Private Equity, Venture Capital and Property opportunities. Many of these investments are unique, opportunistic and can be very rewarding. However, analysing and monitoring these investments can also be very time consuming.

Companies that sit outside the S&P/ASX50 Index are often ignored. However, it’s these companies who have a proven business model and are at the point in the business life cycle where revenue and earnings are often rising at a fast rate. An investment into the broad Small and Mid-Cap universe can provide a great opportunity for investors seeking sector diversification and additional growth.

The Contact Ex-50 Fund holds a majority of its portfolio in founder-led companies.

Founder-led companies are those whose founder holds a position of influence; CEO, Chairman, Board Member, Family Member or a substantial shareholder. Founder-led companies benefit from the long-term guidance of their founders. Executives who founded a firm often see it as their life’s work. Founders are highly motivated to think long-term and have invested a sizable portion of their life savings into their companies. They are aligned with those of their shareholders. Founders know much more about the company’s business. They have a clear idea of where they want to go, and they will guide the business in that direction. Many non-founder executives do not have the vision that a strong founder has.

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