A Quality approach to investing in Australian Equities


A core investment allocation in most portfolios, Australian equities can offer investors an exposure to the growth potential of leading Australian businesses listed on the Australian Securities Exchange. The Warakirri Ethical Australian Equities Fund provides investors access to an actively managed, high quality portfolio of the best Australian company ideas aimed at delivering above average growth prospects over the long term. Utilising a “quality” approach, the Fund is managed by our specialist investment partner, Northcape Capital, who are a dedicated, well established, highly skilled and passionate team that has successfully been managing Australian equities since 2004. The Australian Equities team have the principles of ethical investment at the forefront of their approach with ESG considerations incorporated into their investment decision making process. Warakirri applies its own unique Ethical Overlay screen, integrating positive (ESG) and negative exclusion components.

Investment Objective

Icon - Binoculars

A core holding which invests in a diversified selection of around 25 – 40 Australian companies and that is focused on maximising after-tax returns.

Icon - Magnifying Glass

Primary focus is to identify quality businesses that offer above average growth prospects and high rates of return on equity over the long term.

Icon - Globe

Ethical overlay incorporating both positive and negative components applied with a focus on sustainable businesses that exhibit sound Environmental, Social & Governance practices.

Ethical Investing – Our Approach


Road through a dense forrest

Warakirri applies a proprietary ethical screen for this Fund, incorporating both positive and negative components.

Positive Overlay

The positive overlay component incorporates a focus on investment in sustainable businesses that exhibit sound environmental, social and governance practices.

Negative Overlay

The negative overlay excludes investment in companies that Warakirri considers have significant businesses, that is, revenue of greater than 5% from the audited financial statements of a company, involved in the:

  • provision of gaming products and/or services
  • manufacture of tobacco products
  • manufacture of alcoholic beverages
  • manufacture of products for military applications
  • manufacture of products that could contribute to increased levels of obesity
  • extraction of thermal coal and/or coal seam gas

Warakirri is ultimately responsible for the application and implementation of the Warakirri Ethical Overlay in consultation with the fund’s underlying investment manager Northcape Capital.

In addition to the application of Warakirri’s proprietary ethical screen, Northcape Capital also incorporate ESG considerations into their investment decision making process. There may be instances where Warakirri elect to exclude a company from the portfolio on ethical grounds, despite that company having passed Northcape’s ESG process.

Northcape’s investment procedures are designed to incorporate ESG issues into their investment analysis and decision-making processes. In particular, ESG factors are used to assess if a company is suitable for inclusion on Northcape’s approved list of companies for investment. Northcape’s ESG test is applied based on a scoring system as follows:

  • Environmental practices (3 points total)
  • Social practices (3 points total)
  • Governance (4 points total).

A company needs to pass Northcape’s ESG test which requires achieving a score of at least 6 out of 10 in relation to the above scoring system before being considered for inclusion on Northcape’s approved list of companies for investment.

More detailed information on Northcape’s ESG test and scoring system is available here.

You can view Northcape’s latest ESG & Investment Stewardship Report here.

Fund Facts

Benchmark S&P/ASX300 Accumulation Index
Stock Range 25-40
Portfolio Turnover 20-30%
Inception Date 1 June 1993
Fund Size $242m
Distribution Frequency Quarterly
Currency AUD
APIR Code WRA7701AU
ARSN 642 393 299

Performance, Prices & Distributions


Net returns as at 30 April 2024

1 month % 3 months % FYTD % 1 year % 3 years % pa 5 years % pa 10 years % pa Since inception (01/06/1993) % pa
Fund -3.62 -1.16 +8.98 +7.20 +7.52 +7.50 +6.50 +10.83
Benchmark -2.92 +1.23 +9.97 +9.04 +7.05 +7.98 +7.77 +9.26
Relative Return -0.70 -2.39 -0.99 -1.84 +0.47 -0.48 -1.27 +1.57

Past performance is not a reliable indicator of future performance. The return of capital is not guaranteed.
Northcape Capital was appointed the underlying investment manager effective 1 April 2020.

Current Unit Price
Prices as at 28 May 2024

Month-end Unit Price
Prices as at 30 April 2024

Application $2.2118 $2.1966
Redemption $2.2074 $2.1922
Distribution Rate Reinvestment Price
31 March 2024 $0.01578333 $2.2769
31 December 2023 $0.01144941 $2.1919
30 September 2023 $0.02280845 $2.0027
30 June 2023 $0.00366338 $2.0613
31 March 2023 $0.01669580 $2.0496
31 December 2022 $0.00878644 $1.9361
30 September 2022 $0.02675738 $1.7983
30 June 2022 $0.03983674 $1.8393
31 March 2022 $0.04338855 $2.0808
31 December 2021 $0.03093051 $2.1313
30 September 2021 $0.02621658 $2.1162
30 June 2021 $0.01978638 $2.0586
31 March 2021 $0.0008336 $1.9353
31 December 2020 $0.0078000 $1.8760
30 September 2020 $0.0060181 $1.6780

Portfolio Holdings

As at 30 April 2024

Stock Code Company Name Fund Weighting Index Variance
BHP BHP Billiton Ltd 11.1% 9.3% 1.8%
CSL CSL Limited 9.1% 5.7% 3.4%
MQG Macquarie Group Ltd 7.4% 2.9% 4.5%
TCL Transurban Group 6.6% 1.7% 4.9%
NAB National Australia Bank 5.6% 4.5% 1.1%
CBA Commonwealth Bank of Australia 4.4% 8.2% -3.8%
IAG Insurance Aust Group 4.0% 0.7% 3.3%
BXB Brambles Limited 4.0% 0.9% 3.1%
QAN Qantas Airways 3.9% 0.4% 3.5%
JHX James Hardie Industries 3.7% 1.0% 2.7%
Total 59.8% 35.3% 24.5%

Portfolio holdings are subject to change.

As at 30 April 2024

 
30.0% Financials
20.0% Industrials
16.0% Materials
15.0% Healthcare
7.0% Consumer Discretionary
5.0% Communication Services
2.0% Consumer Staples
1.0% Energy
2.0% Information Technology
2.0% Cash
 

DIRECT INVESTORS - SUBMIT YOUR APPLICATION ONLINE

FINANCIAL ADVISERS - ACCESS THE ONLINE APPLICATIONS MANAGER

FUND RATINGS & PLATFORM AVAILABILITY

Platform
HUB24
Mason Stevens
Netwealth

FAQs


What is the Warakirri Ethical Australian Fund (“Fund”)?

The Fund is an actively managed investment fund that provides investors with access to a hand-selected, high conviction portfolio that is different to the benchmark. The Fund aims to achieve long-term capital growth through a disciplined and proven investment process. An Ethical overlay is incorporated with both positive and negative components applied with a focus on sustainable businesses that exhibit sound Environmental, Social & Governance practices.

What is the investment team’s approach to investing in Australian Equities?

The investment team believe investing in “quality” with a long-term investment horizon is the key to protecting investor wealth on the downside, while capturing steady capital growth. Watch this video to learn more about a quality approach to investing in Australian equities.

What is the investment strategy of the Fund?

The Fund utilises an active management approach. The Fund’s investment manager seeks to invest in no more than 40 high quality businesses invested over an average time frame of three or more years based on their growth potential. Northcape’s investment procedures are designed to incorporate ESG issues into their investment analysis and decision-making processes.

What benchmark is the Fund measured against?

The Fund’s benchmark is the S&P ASX 300 Accumulation Index. This index tracks the top 300 Australian equities across large-cap and mid-cap stocks.

Who is the investment manager?

Northcape Capital is an international boutique fund manager fully owned by its staff. Northcape specialise in managing concentrated high-quality equity portfolios and has delivered significant value-added returns since their establishment in 2004, facilitating growth in funds under management to more than A$10 billion.