Insights, March 2021 - Fund Updates

The February reporting season was one of the strongest in recent years, despite the significant COVID-19 disruptions with positive earnings surprises outweighing earnings disappointments across the broader Australian market, including the domestic small cap space.

The positive upside in company results was largely driven by upside surprise on operating margins, rather than top line revenue growth and consensus earnings forecasts across the market have moved higher for the balance of the financial year. But the strength of the results period has been largely overshadowed by a surge in treasury yields with both the Australian 10-year treasury (month end 1.76%) and the US 10-year treasury (month end 1.44%) moving sharply higher and spooking markets that have become accustomed to the ‘lower for longer’ rhetoric on interest rates from our central bankers.

The OC Premium Small Companies Fund and OC Dynamic Equity Fund both enjoyed a solid reporting season finishing the month up +1.1% and +1.3% respectively, although this was slightly behind the S&P/ASX Small Ordinaries Accumulation Index and the S&P/ASX Small Industrials Accumulation Index which were up +1.5% and +1.4% respectively for the month.

The OC Micro-Cap Fund finished February up +1.1%, behind the S&P/ASX Emerging Companies Accumulation Index which was up +2.0% for the month.

To discuss our portfolios in detail, contact your local Copia business development team member.

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TAGS : Australian equities, Australian shares, Dynamic Equity, Fund update, Latest report, Micro-cap, Premium Small Companies, Small caps