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High Conviction Active Active Income 

High Conviction Active SMA

MONTHLY REVIEW –October 2019

It was a tricky month for the market overall with any sustained strength being sold into while weakness attracted decent buying – this led to a range bound market where rotation at the sector level was the overall consequence. We maintained a more defensive portfolio composition which assisted at the start of the month but less so at the end. Overall we are becoming more positive on some sectors of the market, particularly the material stocks which now account for a growing proportion of the portfolio.

At the macro level, the US Federal Reserve once again cut official interest rates while the UK is heading to the poles for a general election as they attempt to settle the ongoing Brexit debacle. Closer to home, the RBA has started the conversation about unconventional monetary policy known as quantitative easing, releasing a white paper on the topic which had an overall positive slant.

For the month the S&P/ASX 200 index fell -0.35% inclusive of dividends, the high flying IT stocks hardest hit.

MONTHLY REVIEW –September 2019

A strong month for the Australian share market overall and more importantly the Market Matters Active High Conviction Portfolio, which outperformed by +1.49%. Although positive overall, the market remained choppy with some aggressive sector rotation becoming obvious, a distinct move away from a number of hot stocks into more value orientated opportunities; Costa Group and Janus Henderson clear examples of that theme.

Following the August reporting period, focus returned to US- China trade negotiations & UK politics, although these headwinds were offset to a large degree by coordinated central bank support. The RBA cut interest rates, as did the US Federal Reserve & the ECB, while the Europeans also launched back into quantitative easing. Interest rates remain the driving force behind higher stock valuations and this theme will likely persist.

For the month, the ASX 200 advanced +2.26% on an accumulation basis while the portfolio increased by +3.75%

MONTHLY REVIEW –August 2019

Reporting season dominated the month of August ensuring considerable volatility at the stock level. We talked last month about applying a more defensive portfolio stance based on our concern that RBA rate cuts were suggesting a weak backdrop for corporate earnings – that certainly proved the case. Industrial companies (ASX200 ex-Resources) grew their profits by only 1.0% during FY19 as a weak domestic economy weighed on profit growth.

For the month, the Australian share market snapped seven consecutive months or gains to finish down, the S&P/ASX 200 index off -2.36% with the most pronounced weakness focussed in the material and energy sectors while the defensive healthcare & real estate sectors performed well.

We enter September with a ‘tweaked portfolio’ in terms of sector allocations, using weakness to buy into the mining space while maintaining optionality through cash levels. The portfolio outperformed by +0.20% for the month.

MONTHLY REVIEW –July 2019

A tougher month for our growth orientated portfolio overall against a backdrop of a strong domestic share market. We elected to position more defensively leading into local reporting season which commences in August , while we also had one of the smaller portfolio holdings, building materials business Adelaide Brighton (ABC) announce a painful 23% downgrade to full year earnings expectations – more on that over the page.

More broadly, the Australian share market relished in the backdrop of lower interest rates, with the S&P/ASX 200 index up 2.93% for July, the 8th month in a row it has posted gains, starting the new financial year on the front foot.

We enter the August reporting period with a defensive portfolio skew; overweight gold, overweight banks and underweight resources (but looking to increase). We have strong optionality through our current cash weighting, and will remain on the buy side into weakness.

MONTHLY REVIEW –June 2019

Another solid month of returns for our growth orientated portfolio as we locked in strong gains from Bingo (BIN) which appreciated nearly 60% from our initial purchase while a resurgence in Resmed (RMD) & Aristocrat Leisure (ALL) helped us take solid gains in both.

More broadly, the Australian share market defied the bears and had another cracking month, with the S&P/ASX 200 index up 3.70% for June, the seventh month in a row it has posted gains turning what looked like a poor year into a good one. For the year the ASX 200 added 6.85% in absolute terms and 11.55% when including dividends.

Our decision to remain overweight banks was the right one while we used weakness at the start of June to add to our resource exposure, buying BHP. The two greatest contributors to portfolio returns in June were Bingo &  earthmoving operator Emeco Holdings (EHL).

MONTHLY REVIEW –May 2019

Australian shares enjoyed a month of outperformance relative to other global markets during May supported by the expectation of lower interest rates and the surprise election of a Liberal Government, the latter of which helped to support traditional ‘yield stocks’. The ASX 200 accumulation index added +1.71% for the month with NAB, & WBC trading ex-dividend while FMG announced a big 60c special – boosting the portfolio income.

Health Insurer Nib Holdings (NHF) was seen as a net beneficiary of a Liberal win and the position in the portfolio rallied strongly.

On the negative side, Costa Group (CGC) downgraded earnings expectations late in the month, and the shares fell ~30%. We hold CGC in the portfolio and will discuss it in more detail over the page.

MONTHLY REVIEW – April 2019

Australian shares enjoyed another strong month in April with the ASX200 Accumulation Index adding +2.37%, although size was a differentiating factor with the top 20 stocks underperforming, adding 2% in the period versus the Small Ordinaries which added 4%. Money is clearly venturing up the risk spectrum after a strong run in the market.

Monetary policy continues to dominate with pressure now firmly on the RBA to cut interest rates – the market expecting benchmark interest rates to reach 1% this year. Lower rates are supportive of stocks even though overall earnings growth in the local market is elusive. While the market overall remains fully valued, identifying specific themes and stocks that fit those themes remains key. We believe any ongoing weakness in stocks is a buying opportunity in cyclical stocks like resources as opposed to defensive plays such as healthcare.

MONTHLY REVIEW – March 2019

Australian shares were marginally higher in March consolidating the very strong first two months of the calendar year to produce the best quarterly return since the GFC – the ASX 200 adding +9.46% during the period. The ‘melt up’ in equities was largely underpinned by a significant about turn by global central banks which moved on a dime from a tightening to an easing bias. Lower interest rates globally and a bearish market following the significant decline into Christmas prompted strong buying across global stock markets, catching many on the hop. The rally was not underpinned by earnings growth, but rather a big expansion in earnings multiples (P/E’s) thanks to a lower risk free rate. Iron Ore stocks were strong which filtered into stellar performances across the resource sector, while real-estate stocks were also a standout. While the market has rallied, earnings expectations (outside Iron Ore exposed names) have remained subdued.

MONTHLY REVIEW – February 2019

The hectic month of February came to a close last week and with it so too the half yearly earnings season for Australian companies. The Australian market excluding dividends advanced by +5.2% while the US S&P 500 was up by +2.97%, however it was Chinese markets that really impressed, the Shanghai Composite adding 12.82% for the month – punching through resistance thanks to more positive commentary around the Chinese / US trade discussions. We’ve experienced some extreme volatility at a stock level driven obviously by results but more importantly, market positioning around those results. Investors (including MM) where more bearish than bullish leading into reporting season and the outcome was not the ‘car crash’ that it could have been. The correction in global markets in December was driven by fears of a global slow down – an impending recession led by the US – however that negative backdrop generally speaking didn’t show up through weakness in earnings (yet).

MONTHLY REVIEW – January 2019

Global markets experienced a strong recovery in January after a savage sell-off in December. Fading fears on a number of binary outcomes surrounding trade, central bank action and geopolitical risks helped the ‘risk on’ attitude towards stocks, while we also saw a big improvement in the US Junk Bond market after a turbulent December quarter. The recent weakness experienced in some of the high value growth orientated companies gave way and money flowed back into this sector, aggressively so in parts. We held positions in Appen (ASX:APX), Xero (ASX:XRO) and Altium (ASX:ALU) that benefitted from this theme, while we also saw a strong recovery from our positions held in CSL & Cochlear (ASX:COH). The broad based strength in January gave us the opportunity to increase our cash levels across the portfolio as we head into February reporting season – opportunities in a tough environment will hopefully present themselves. While we don’t necessarily like holding a large cash balance, having flexibility to take advantage of any market miss-pricing has been one of our strengths over the years – and reporting season
provides a good catalyst for that. Resmed (ASX:RMD) has been one of the earlier casualties and we used some extreme weakness to buy shares in the sleep treatment-focused medical device company.

MONTHLY REVIEW – December 2018

The local share market was more resilient over the course of December relative to international markets although the ASX 200 on an accumulation basis still ended in the red. The typical Christmas rally was illusive in December with the market falling by 0.12% overall, however we have seen this come into play during the start of January.

The local Material sector was the main supporting factor for our market in December, thanks largely to a strong move higher in index heavyweight BHP while our position in Fortescue Metals (ASX: FMG) benefitted from a 10% rally in the Iron Ore price during the month. Hybrid’s added to performance over the period while stocks detracted from it

We have continued to underperform our cash +4% benchmark on the respective time frames which is disappointing, although hardly surprising given the negative skew of equity markets over the period.

MONTHLY REVIEW – November 2018

Another soft month for global equities with a smorgasbord of risk events hurting markets. These ranged from fears of an escalating Trade War between the US and China, a hawkish Fed that is going to slam the brakes on the US economy, a plummeting oil price as OPEC overproduces, a sharp slowdown in Chinese economic activity, rising corporate borrowing spreads and a falling Australian housing market, to name a few!

Navigating that backdrop has been challenging however the Active High Conviction SMA has continued its period of outperformance adding 99bps of ‘alpha’ versus the ASX 200 Accumulation Index.  While relative performance is pleasing, losing less is not our mantra. The portfolio is now set for a typical Christmas rally finding some comfort that over the past 30 years, on only 3 occasions has December been weak following a ‘red’ November. Time will tell.

MONTHLY REVIEW – OCTOBER 2018

Concerns over global growth, trade wars and peak earnings saw global equity markets sharply lower in October, dragging the local  ASX 200 down by -6.05% for the month, however the drop from high to low was a more aggressive -9.4%.

We entered October with a bearish skew holding two negative facing ETFs in the portfolio (as a hedge), a reasonable cash holding and a number of low beta stocks that in our view would outperform into weakness. That positioning worked well allowing the portfolio to outperform its benchmark (ASX 200 accumulation) by 3.89% for the month, and by 4.39% this financial year, however as we often discuss in reports, we’re all about making money, not losing less.

By the end of October we’d closed the hedges and were positioned more than 90% long equities targeting a move back towards the ~5900 region for the ASX 200. We increased our weightings towards growth during the decline picking up Nickel miner Western Areas (WSA) very close to the $2.20 low in the stock.
Financials remain our big overweight call at this juncture and pleasingly, bank reporting has completed without any major negative surprises. Less bad news is good for the banks given depressed valuations and we expect banks to edge higher into Christmas.

MONTHLY REVIEW – SEPTEMBER 2018

The portfolio remains defensively positioned with a high cash balance of ~18% and around ~11% short exposure spread between the Australian and US markets. We continue to target stocks with an overall low correlation to the market preferably with a near term catalyst for share price growth. Examples include Healthscope (HSO) which was added during the month on the belief that another takeover tilt seems likely. We also bought Newcrest Mining (NCM) following a very strong production report while market technology player IRESS (IRE) was purchased as a short term positional trade. We are neutral the ASX200 while the index holds above 6140 but we remain in “sell mode” albeit in a patient manner.

MONTHLY REVIEW – AUGUST 2018

We’ve continued to position the portfolio more defensively over the past few months with a number of hedging positions (negative facing ETFs), reasonably high cash levels (~19%), while we’re also now skewed towards ‘old world’ stocks that we believe will outperform in any market volatility.  It’s pleasing that we’ve kept broadly in line with the market’s performance yet we’ve had a substantially lower ‘value at risk’ which is an important measure when thinking about risk versus return in a portfolio.

Our view remains that the equity markets are extended, and risks for a meaningful pullback are bubbling away. While it’s hard to fully insulate portfolios in a falling market, having flexibility to buy weakness if/when it prevails is important, and should put us in good stead to add value as the year progresses.

Local earnings season dominated our focus during August and overall, companies within the portfolio delivered acceptable numbers.

On a positive note, stocks that impressed included A2 Milk (A2M) and IRESS (IRE) – both reporting results well ahead of market expectations, while Telstra (TLS) did a good job of calming investor concerns, and the rubber band snapped back to the upside. Less pleasing was Janus Henderson (JHG), a stock that was already cheap ahead of reporting although it became cheaper during the period while the rout in Lithium continued to weigh on Orocobre (ORE) – a positon we cut for a loss during the month.

MONTHLY REVIEW – JULY 2018

The portfolio remains defensively positioned with a high cash balance of ~18% and around ~11% short exposure spread between the Australian and US markets. We continue to target stocks with an overall low correlation to the market preferably with a near term catalyst for share price growth. Examples include Healthscope (HSO) which was added during the month on the belief that another takeover tilt seems likely. We also bought Newcrest Mining (NCM) following a very strong production report while market technology player IRESS (IRE) was purchased as a short term positional trade. We are neutral the ASX200 while the index holds above 6140 but we remain in “sell mode” albeit in a patient manner.

Active Income SMA

MONTHLY REVIEW –October 2019

It was a tricky month for the market overall with any sustained strength being sold into while weakness attracted decent buying – this led to a range bound market where rotation at the sector level was the overall consequence. We maintained a more defensive portfolio composition which assisted at the start of the month but less so at the end. Overall we are becoming more positive on some sectors of the market, particularly the material stocks which now account for a growing proportion of the portfolio.

At the macro level, the US Federal Reserve once again cut official interest rates while the UK is heading to the poles for a general election as they attempt to settle the ongoing Brexit debacle. Closer to home, the RBA has started the conversation about unconventional monetary policy known as quantitative easing, releasing a white paper on the topic which had an overall positive slant.

For the month the S&P/ASX 200 index fell -0.35% inclusive of dividends, the high flying IT stocks hardest hit.

MONTHLY REVIEW –September 2019

Interest rates ticked higher during the month with the US 10 year bond yield trading back to a 1.90% high despite the Federal Reserve cutting interest rates. This has implications for yield investments and we saw a sell-off in the more traditional bond like sectors on the ASX – a move that we ultimately faded adding two infrastructure stocks to the portfolio – more on those overleaf.

More broadly, stocks remained choppy with some aggressive sector rotation becoming obvious, a distinct move away from a number of hot stocks into more value orientated opportunities and this benefitted the portfolio overall.

The hybrid market remained strong and while we are struggling to see compelling value amongst financial hybrids, on a risk adjusted basis relative to other income opportunities, they remain strong portfolio holds for income.

For the month, the portfolio increased +2.90% while the absolute return benchmark of cash +4% increased +0.40%

MONTHLY REVIEW –August 2019

Reporting season dominated the month of August ensuring considerable volatility at the stock level. We talked last month about applying a more defensive portfolio stance based on our concern that RBA rate cuts were suggesting a weak backdrop for corporate earnings – that certainly proved the case. Industrial companies (ASX200 ex-Resources) grew their profits by only 1.0% during FY19 as a weak domestic economy weighed on profit growth.

For the month, the Australian share market snapped seven consecutive months or gains to finish down, the S&P/ASX 200 index off -2.36% on an accumulation basis with the most pronounced weakness focussed in the material and energy sectors while the defensive healthcare & real estate sectors performed well.

The portfolio declined by -0.57% for the month underperforming its absolute return benchmark by 99bp, however that’s to be expected given the weak backdrop for equities.

MONTHLY REVIEW –July 2019

Another solid month of returns for our income orientated portfolio as strength in stock markets along with a continued support of ‘yield’ assets helped to drive anther strong outcome.

More broadly, the Australian share market relished in the backdrop of lower interest rates, with the S&P/ASX 200 index up 2.93% for July, the 8th month in a row it has posted gains, starting the new financial year on the front foot.

The portfolio remains skewed towards equities with a ~50% allocation while holding ~30% in income securities along with a relatively high cash balance – cash has risen into recent market strength. Our expectation is to deploy this cash through reporting season as more opportunities arise.

A strong result from mortgage Insurer Genworth (GMA) during the month and announcement of a special dividend was pleasing.

MONTHLY REVIEW –June 2019

Another solid month of returns for our income orientated portfolio as strength in global stock markets along with a continued focus on yield investments as interest rates declined underpinned strength in income securities, particularly hybrids where strong demand and limited supply underpinned strength.

More broadly, the Australian share market defied the bears and had another cracking month, with the S&P/ASX 200 index up 3.70% for June, the seventh month in a row it has posted gains turning what looked like a poor year into a good one. For the year the ASX 200 added 6.85% in absolute terms and 11.55% when including dividends.

The portfolio remains skewed towards equities with a ~50% allocation while holding ~30% in income securities along with a relatively high cash balance – cash has risen into recent market strength. Our expectation is to deploy this cash through reporting season as more opportunities arise.

MONTHLY REVIEW – May 2019

Australian shares enjoyed a month of outperformance relative to other global markets during May supported by the expectation of lower interest rates and the surprise election of a Liberal Government, the latter of which helped to support traditional ‘yield stocks’ along with Hybrid investments given the continuance of existing franking credit legislation. The ASX 200 accumulation index added +1.72% for the month with NAB, WBC, and BOQ all trading ex dividend – boosting the portfolio income.  Hybrid spreads contracted sending prices higher.

Property and construction related stocks did well during the month with the recent purchase of CSR rallying more than 20%, while continued strength on the Iron Ore price supported our position in Rio Tinto.

Overall, it was a very strong month for the Income Portfolio with a combination of high income and strong capital gains producing a return +2.67% above benchmark.

MONTHLY REVIEW – April 2019

Australian shares enjoyed another strong month in April with the ASX200 Accumulation Index adding +2.37%, although size was a differentiating factor with the top 20 stocks underperforming, adding 2% in the period versus the Small Ordinaries which added 4%. Money is clearly venturing up the risk spectrum after a strong run in the market.

Monetary policy continues to dominate with pressure now firmly on the RBA to cut interest rates – the market expecting benchmark  interest rates to reach 1%  this year. Lower rates are supportive of stocks even though overall earnings growth in the local market is elusive. In the Hybrid market, the median margin across financial hybrids contracted 7bps over April from 3.38% to 3.31%. The successful listing of 2 longer dated securities during the previous month of March being NABPF and MQGPD set the tone for performance, with these securities trading at margins 39bps and 56bps inside their respective issue margins of 4.00% and 4.15% by the end of April curve.

MONTHLY REVIEW – March 2019

Australian shares were marginally higher in March consolidating the very strong first two months of the calendar year to produce the best quarterly return since the GFC – the ASX 200 adding +9.46% during the period. The ‘melt up’ in equities was largely underpinned by a significant about turn by global central banks which moved on a dime from a tightening to an easing bias. Lower interest rates globally and a bearish market following the significant decline into Christmas prompted strong buying across global stock markets, catching many on the hop.

The rally was not underpinned by earnings growth, but rather a big expansion in earnings multiples (P/E’s) thanks to a lower risk free rate. Iron Ore stocks were strong which filtered into stellar performances across the resource sector, while real-estate stocks were also a standout. While the market has rallied, earnings expectations (outside Iron Ore exposed names) have remained subdued.

MONTHLY REVIEW – February 2019

The hectic month of February came to a close last week and with it so too the half yearly earnings season for Australian companies. The Australian market excluding dividends advanced by +5.2% while the US S&P 500 was up by +2.97%, however it was Chinese markets that really impressed, the Shanghai Composite adding 12.82% for the month – punching through resistance thanks to more positive commentary around the Chinese / US trade discussions. We’ve experienced some extreme volatility at a stock level driven obviously by results but more importantly, market positioning around those results. Investors (including MM) where more bearish than bullish leading into reporting season and the outcome was not the ‘car crash’ that it could have been. The correction in global markets in December was driven by fears of a global slow down – an impending recession led by the US – however that negative backdrop generally speaking didn’t show up through weakness in earnings (yet).

MONTHLY REVIEW – January 2019

Global markets experienced a strong recovery in January after a savage sell-off in December. Fading fears on a number of binary outcomes surrounding trade, central bank action and geopolitical risks helped the ‘risk on’ attitude towards stocks, while we also saw a big improvement in the US Junk Bond market after a turbulent December quarter. Equities exposed to Iron Ore prices were a standout through the period, and the Income Portfolio benefitted from a strong run from Fortescue Metals (ASX:FMG) which was the best performing positon in the portfolio through January.

The broad based strength in January gave us the opportunity to increase our cash levels across the portfolio as we head into February reporting season – opportunities in a tough environment will hopefully present themselves for pile of cash. While we don’t necessarily like holding a large cash balance, having flexibility to take advantage of any market miss-pricing has been one of our strengths over the years – and reporting season provides a good catalyst for that. We also expect one, potentially two new hybrid securities to be released during February which we will assess for this portfolio.

MONTHLY REVIEW – December 2018

The local share market was more resilient over the course of December relative to international markets although the ASX 200 on an accumulation basis still ended in the red. The typical Christmas rally was illusive in December with the market falling by 0.12% overall, however we have seen this come into play during the start of January.

The local Material sector was the main supporting factor for our market in December, thanks largely to a strong move higher in index heavyweight BHP while our position in Rio Tinto (ASX: RIO) benefitted from a 10% rally in the Iron Ore price during the month. That said, our underweight positioning within the portfolio towards resources cost us relative performance during the period, although we continue to outperform our benchmark on both a 3 and 6 month time frame. We view Nickel Miner Western Areas (ASX: WSA) as a strong buy in the sector while RIO is a sell in the mid $80’s

MONTHLY REVIEW – November 2018

Another soft month for global equities with a smorgasbord of risk events hurting markets. These ranged from fears of an escalating Trade War between the US and China, a hawkish Fed that is going to slam the brakes on the US economy, a plummeting oil price as OPEC overproduces, a sharp slowdown in Chinese economic activity, rising corporate borrowing spreads and a falling Australian housing market, to name a few!

The portfolio is now set for a typical Christmas rally finding some comfort that over the past 30 years, on only 3 occasions has December been weak following a ‘red’ November. Time will tell.

MONTHLY REVIEW – OCTOBER 2018

Concerns over global growth, trade wars and peak earnings saw global equity markets sharply lower in October, dragging the local  ASX 200 down by -6.08% for the month, however the drop from high to low was a more aggressive -9.4%.

In the Hybrid market, the average median margin across financial hybrids widened 24bps over October to 3.31%, reflecting the volatility in growth assets over the period, albeit when considered against the backdrop of the market volatility, the move was reasonably subdued.

We entered October with a higher skew towards listed income securities, however throughout the month we decreased our weightings by cutting the ANZPD and increasing the portfolios skew to more volatile equities. That has been a negative for performance in the short term with the portfolio now trading below its return objective across all time frames.

Cash remains elevated at a time when there are more obvious income opportunities following recent weakness.

MONTHLY REVIEW – SEPTEMBER 2018

The model portfolio has only recently launched and has been progressively ‘set’ over the past 2 months. Portfolio construction is based on macro-economic and thematic views of our investment team, and is aligned with our weekly Market Matters Income Report.  Investment selection is skewed towards fundamental filters and relative valuation; however current macro trends and technical timing are also taken into consideration.

The portfolio has outperformed its benchmark over the course of June whilst maintaining a high cash allocation (~28%). The lag between launching the model and setting the portfolio has partially dragged performance since inception however recent momentum is pleasing.

The portfolio is positioned defensively given our neutral to bearish view on the share market in the short term. We have ~50% of the portfolio in domestic shares, ~22% in hybrid securities and ~28% in cash, awaiting opportunity.  The portfolio is expected to deliver income exceeding 6% over the next 12 months.

We expect Australian banks to outperform this year, while the unloved retail sector may offer some opportunity into further weakness. Elsewhere, global facing fund managers are worth consideration if a deeper market correction plays out given some are now relatively inexpensive.

MONTHLY REVIEW – AUGUST 2018

Performance during the month of August was solely achieved through dividend and interest payments, offset by a small capital loss across the portfolio. Cash remains elevated although as I type, equity markets are coming under some pressure which may create opportunity in the month ahead. Local earnings season dominated our focus during August and overall, companies within the portfolio delivered acceptable numbers.

On a positive note, stocks that impressed included Telstra (TLS) and Suncorp (SUN). Less pleasing were Eclipxe (ECX) and Fortescue Metals (FMG), although ECX did manage a strong recovery from its monthly lows.

In the Hybrid market credit spreads narrowed over the month translating into a narrowing in the median margin across financial hybrids which went from ~ 3.27% to ~ 3.00%. For the month the total portfolio return was +0.76% and +3.52% since inception.

The total return of the portfolio has exceeded its respective objective for the month, and is now 1.18% ahead of its benchmark since inception (28/3/18).  We plan to add the Neuberger Berman International Bond Fund to the Portfolio with a 5% weighting.

MONTHLY REVIEW – JULY 2018

The portfolio continues to be ‘progressively’ set as opportunities present themselves with a bias towards more defensive style income investments at this point in time. The portfolio added a listed bond issued by equipment finance provider Axcesstoday  during the month. The simple style unsecured bond is listed on the ASX under code AXLHA and pays a floating rate coupon of 4.90% over the 90 day bank bill rate, equating to around 7% in total.

Credit spreads tightened throughout the month pushing hybrid prices higher overall. Genworth (GMA) was a strong performer in the portfolio during the course of July as market expectations around the mortgage insurance company proved too negative. Reporting season may throw up some opportunities to deploy our ~24% cash weighting.