Celebrating the Australasian Dividend Growth Fund's 10-year milestone
This month we are celebrating the success of the Australasian Dividend Growth Fund. It has been running for 10 years and we’ve achieved an annualised 10-year return just under 20%, after fees and before tax. I feel like that’s probably all I need to say...
However, I’m sure you’re after a few more insights, like how this has been achieved, and potentially, more importantly, is it repeatable? The answer to the former I can explain. The answer to the latter, well we will be applying the same strategy but past performance is not a guarantee of future returns.
They say the hardest part about going for a run is tying your shoelaces. And so it is with any difficult task, really you just need to get going.
There are four individuals who have worked on the Dividend Growth Fund over the last decade and pleasingly, they are all still at Pie: myself, Mark Devcich, Chris Bainbridge & Mike Ross. We have employed a consistent strategy of buying undervalued (predominantly) dividend-paying growth companies. I knew our strategy would work, I just wasn’t sure how well it would work. The Mike of 2011 would certainly bite the hand off someone offering such a lofty return over the next decade, especially when this is after fees.
The Dividend Growth Fund has never had a negative year either, which is immensely satisfying. We’ve learned a lot along the way. Titan Energy, for those that remember, hurt badly, as did Vita Group when that collapsed. But for every Titan there have been 5-10 Macquarie Telecoms or UnitiWireless’. Thanks Mark, Chris & Mike Ross, you’ve done an excellent job and I’m proud of what we have achieved.
Shift in key drivers
September was a delicate month to navigate and October feels like it will be similar. After being blessed with massive tailwinds since April 2020, markets have entered a period where some of those key drivers, while not perhaps headwinds yet, have shifted, and in sailing terms, markets have come off the foils. I don’t foresee this as the beginning of the end, rather just another phase to navigate. If bull markets are born in pessimism, grow on scepticism, mature on optimism and die in euphoria, we are most likely in the scepticism or optimism phase. Remember we are still in the midst of a pandemic. So likely there is still some way to go in the recovery.
I touch on some of the challenges facing markets in my NZ Herald interview with Liam Dann. Risks such as the Chinese property market and what the implications might be of a default by their largest developer Evergrande.
Of course, it is October too, historically a spooky month. Stay safe out there, look after yourself and your loved ones.
As always, thank you for your support. If you have any questions please don’t hesitate to call me on (09) 486 1701, or email me, [email protected]
Mike Taylor, Founder and CEO
Information is current as at 30 September 2021. Pie Funds Management Limited is the manager of the funds in the Pie Funds Management Scheme. Any advice is given by Pie Funds Management Limited and is general only. Our advice relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees, like brokerage, if you act on any advice. As manager of the Pie Funds Management Scheme investment funds, we receive fees determined by your balance and we benefit financially if you invest in our products. We manage this conflict of interest via an internal compliance framework designed to help us meet our duties to you. For information about how we can help you, our duties and complaint process and how disputes can be resolved, or to see our product disclosure statement, please visit www.piefunds.co.nz. Please let us know if you would like a hard copy of this disclosure information. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary.