Portfolio highlights

The Portfolio generated a negative return for the month, with global shares ending a turbulent November with only a flat return. Concerns over expensive share valuations were countered by hopes for lower US interest rates in December.

Polaris Global Equity Fund – The fund outperformed its benchmark by 1.8% in November. Performance was primarily driven by asset allocation with Healthcare and Financials adding value, while overweight positions in Technology and Real Estate detracted. Top positive contributors included United Therapeutics and Marubeni Corp. United Therapeutics rallied on record quarterly revenue, a new share buyback, and management’s confident multi-year growth outlook.

Life Cycle Concentrate Global Share Fund – The fund outperformed its benchmark in November, with positive contributions from Healthcare, Communication Services, and Consumer Defensive. Main detractors were Technology, Consumer Cyclical, and Energy. Top individual stock contributors were Delta Air Lines, HCA Healthcare, and Steel Dynamics. Delta Air Lines gains were driven by record revenue days during peak season, resilient leisure and corporate travel demand, and an upbeat guidance for year-end and 2026. 

Resolution Capital Global Property Securities Fund - The fund outperformed the benchmark by 1.2% in November driven by strong stock selection. Top contributors were Welltower, Mitsui Fudosan, and Ventas. Welltower’s shares rose on strong seniors housing fundamentals and major strategic announcements in late October totalling tens of billions in seniors rental housing transactions.  

US shares had a rollercoaster ride in November. Notably technology companies, including Amazon, Facebook-Meta and Microsoft, recorded sharp price falls in early November as concerns over high valuations cautioned investors. However, slower retail spending helped US share prices recover by boosting hopes for the US central bank lowering interest rates in December. Chinese shares fell as China’s slow retail sales and weak property market remain key concerns.

Australian shares disappointed as higher consumer inflation effectively crushed hopes for another interest rate cut in December. The Information Technology sector delivered the weakest performance of -10.8% given turbulence from Wall Street. Financial shares which include banks also suffered with a -6.5% return. The Consumer Discretionary and Real Estate Investment Trust sectors retreated with diminished hopes for lower interest rates. Yet the more defensive sectors of Health Care and Consumer Staples recorded solid gains given more cautious sentiment. Another resilient performance was the Resources sector given the benefit of strong rises in gold and base metal prices.

Australia’s inflation data revealed persistent price pressures that are maintaining the ‘cost of living’ crisis. For the year to October, headline annual inflation came in at 3.8%. This is well above the Reserve Bank of Australia’s (RBA) 2% to 3% inflation target band, so there are diminished prospects for further interest rate cuts. Stronger jobs growth with the unemployment rate falling from 4.5% to 4.3% in October also weighs against the RBA lowering interest rates.