April proved to be a month of consolidation for the OC funds after a very strong March quarter.  With the Federal budget this week and the Gillard led minority government’s numbers in the lower house changing almost weekly, we are cognisant now, more than ever, of the impact events in Canberra can have on the domestic equity market.

We have mentioned Warren Buffet’s well known quote in our reports many times, “…be fearful when others are greedy and be greedy when others are fearful”. We believe this to be sage advice in the current environment and the investment team will certainly be looking to take advantage of exceptional opportunities the market may present in any periods of heightened volatility. 

April 2012 Monthly Fund Update

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The March quarter was strong across all of the OC Funds and was underpinned by excellent operational results from most of our core holdings and reported results in excess of market expectations and re-rated accordingly. In particular, the mining services space was extremely buoyant for us…

March 2012 Quarterly Fund Update

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OC Funds has become a regular contributor to the well known on-line investing publication The Eureka Report. Published by Alan Kohler, one of Australia’s most experienced financial journalists, the report covers a wide range of investment related topics. OC Funds has been asked to contribute regular stock ideas for subscribers.

The stocks we write about are typically high quality companies held within our Funds that have been selected based on our rigorous investment process. Most of them possess many of the following attributes: proven management; sustainable and transparent business model; reliable earnings streams; strong free cash-flow; strong balance sheet; high return on equity and a proven track record. To see our contributions, click here

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The February reporting season proved to be an excellent one for all of the OC Funds and saw a continuation of the strong positive momentum that started in January.   Many investors are cashed up but sitting on the sidelines awaiting further confirmation that a global recovery is underway. Our view is that these investors, in exercising caution, risk paying significantly higher prices for equities when they eventually wade back into the market.

February 2012 Monthly Fund Update

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Against the expectations of many investors, the global equity markets clearly went into “risk-on” mode in January, a trend which has continued into early February. Many of our portfolio holdings have positive momentum coming into reporting season including our key consumer related stocks which have recently released positive trading updates.  We continue to position the portfolio towards stocks which are not reliant on a strong domestic or global economy for growth.

January 2012 Monthly Fund Update

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“The ‘Recommended’ rating indicates that Lonsec has conviction that the fund or product can achieve its objectives and, if applicable, outperform peers over an appropriate investment timeframe. The manager or product has a number of competitive advantages in people, process and product design. The investment is a recommended entry point to access this asset class or strategy.”

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The Lonsec Limited (“Lonsec”) ABN 56 061 751 102 rating (assigned Dec 2011) presented in this document is limited to “General Advice” and based solely on consideration of the investment merits of the financial product(s). It is not a recommendation to purchase, sell or hold the relevant product(s), and you should seek independent financial advice before investing in this product(s). The rating is subject to change without notice and Lonsec assumes no obligation to update this document following publication. Lonsec receives a fee from the fund manager for rating the product(s) using comprehensive and objective criteria.

The Australian equity market finished the quarter in the black with the S&P ASX 200 Accumulation Index finishing up 2.1%. This was well behind many of the major international bourses which bounced from oversold levels at the end of the September quarter despite a continuing challenging macro backdrop.

In our view, the equity market is pricing in a material chance of a major sovereign default in the coming months. Should such a scenario be avoided (and we believe that it will be avoided) then we ought to see a strong relief rally in equity markets.

December 2011 Quarterly Fund Update