Investment Matters

Company news

Cash Reclassification

Several new cash allocations (for convenience recorded as securities) have been added to clients’ holdings.

They are as follows:

Asset Class

Security

Property Securities

PROPCASH

Income Securities

AFICASH

Australian Equities

EQUITYCASH

Alternative Securities

ALTCASH

Cash levels were previously reflected in two holdings: CASHV2 and EQUITYCASH which aggregated the cash available to invest across all portfolios.

We wish to have greater transparency about cash allocations in each asset class.  So, these securities will now reflect uninvested funds for each relevant portfolio, for greater transparency.

For example, clients with a property allocation will now have a security called PROPCASH, which represents the uninvested cash attributable to their property portfolio.

The change does not impact where cash balances are held. There will be no transfer of funds and funds will continue to be held in the same bank accounts. 

It is simply a change in the presentation of this cash - for better transparency as to how it is allocated between asset classes as per client asset allocations. 

James Hardie – recovering strongly

James Hardie released their full year result this week, with its shares finishing the week more almost 10% higher. Their result reflected what had been a very strong period leading up to the fourth quarter of 2020 (January to March period) off the back of strength in US housing.

Furthermore, we were incredibly pleased with sales performance for FY-21 (1st of April to 15th of May) which has been less impacted than expected. This suggests the company has maintained, if not grown its strong market share and has seen growth in channels such as DIY.

Over the past two months the company has seen a progressive strengthening in sales, with its CEO optimistic it will see a recovery in sales momentum and return to growth. This recovery would be consistent with early indications of activity we have received from contractors in the US.

Given such a recovery, COVID-19 would have provided a unique opportunity to purchase a company with strong prospects for growth and a dominant brand, at a significant discount.