Fund Review Lincoln Australian Share Fund August 2014 Month in review Dear Investor, Welcome to the month of September 2014! Consistent with past reporting periods, the Lincoln Australian Share Fund (Fund) performed strongly during the August reporting period, posting a solid return of +2.11% and outperforming the broader S&P/ASX 300 Accumulation Index by +1.47%. The reporting period provided the market with a mixed bag of results across different sectors. The Healthcare sector was the standout performer, led by a solid result from CSL Limited (CSL). The materials sector was the worst performing in the month, but it would be fair to say that on average the financial results delivered were less a factor in the price action than the deterioration in the price of iron ore over the month. Sentiment from company management indicated that conditions for companies that are leveraged to the Australian consumer cycle remain challenging; this was highlighted by the fact that there are now no stocks in the discretionary retail sector that meet the Star Stock criteria. Tim Lincoln Managing Director and Head of Managed Investments There were a number of very strong results in the Fund portfolio, particularly with Slater & Gordon Limited (SGH), Capitol Health Limited (CAJ), Technology One Limited (TNE) and Credit Corp Group Limited (CCP). Treasury Group Limited (TRG) also posted strong gains after announcing an earning accretive joint venture. The reporting period also helped the Fund identify some fundamentally strong small cap stocks, including new fund entrants Infomedia Limited (IFM) & Sirtex Medical Limited (SRX). JB Hi-fi Limited (JBH), Computershare Limited (CPU) and ResMed Inc. (RMD) provided the market with weaker than expected outlooks and marginally missed the earnings growth criteria to remain a stock in the portfolio. With reporting period behind us, we expect the strong momentum generated in August to flow through to September as investors flock to the high quality names in the Fund portfolio. I hope you have a happy, healthy and prosperous September. Yours sincerely Tim Lincoln Managing Director Performance to 31 August 2014 Data referred to in the performance commentary above relates to the Lincoln Wholesale Australian Share Fund unless otherwise stated. Lincoln Australian Share Fund Investors seeking growth Suitable for Half-yearly Distribution frequency Wholesale 1 month Fund return1 S&P/ASX 300 Accumulation Index S&P/ASX 300 Accumulation Index (excl. top 20 stocks) S&P/ASX Small Ordinaries Accumulation Index 2.11% 0.64% 1.24% 2.34% 3 months 2.08% 3.56% 5.39% 6.17% 1 year 12.68% 14.15% 14.12% 7.49% 3 years p.a. 7.87% 14.00% 8.80% -0.17% 5 years p.a. 4.85% 9.07% 6.06% 1.85% 7 years p.a. 0.37% 2.80% -2.01% -3.86% Since inception p.a.2 6.31% 7.90% 3.85% 3.19% Retail Fund return1 S&P/ASX 300 Accumulation Index 1 month 2.04% 3 months 1.86% 1 year 3 years p.a. 5 years p.a. Since inception p.a. 3 S&P/ASX 300 Accumulation Index (excl. top 20 stocks) S&P/ASX Small Ordinaries Accumulation Index 0.64% 1.24% 2.34% 3.56% 5.39% 6.17% 11.76% 14.15% 14.12% 7.49% 6.99% 14.00% 8.80% -0.17% 3.99% 9.07% 6.06% 1.85% -0.21% 2.65% -2.61% -4.43% Performance highlights Performance contributors this month included: Slater & Gordon Limited (SGH) shares rose +26.10% following its strong full year results, which came in ahead of expectations. Infomedia Limited (IFM) was up +26.74% on the back of its strong full year report. Capitol Health Limited (CAJ) share price continued to rally, after it delivered full year results in line with guidance, +15.32%. Sirtex Medical Limited (SRX) reported accelerating growth in FY14 with positive outlook ahead, shares increased +15.47% for the month. Fund returns are calculated using exit prices and are net of management fees, ongoing fees and expenses, and assume distributions are reinvested and that no tax is deducted. 2 11 January 2005 3 1 June 2007 1 Fund Review Lincoln Australian Share Fund August 2014 Strategy update Lincoln Australian Share Fund holdings as at 31 August 2014 Code Company Portfolio holding % Stock status Large Diversified Industrials 79.14% SGH Slater & Gordon Limited Stock Doctor Star Stock 6.15% SHL Sonic Healthcare Limited Stock Doctor Star Stock 6.00% CSL CSL Limited Stock Doctor Star Stock 5.95% TPM TPG Telecom Limited Stock Doctor Star Stock 5.77% RHC Ramsay Health Care Limited Stock Doctor Star Stock 5.71% REA REA Group Limited Stock Doctor Star Stock 5.62% NVT Navitas Limited Stock Doctor Star Stock 5.50% FLT Flight Centre Travel Group Ltd Stock Doctor Star Stock 5.48% BXB Brambles Limited Stock Doctor Star Stock 5.47% IIN iiNet Limited Stock Doctor Star Stock 5.34% SKT Sky Network Television Limited Stock Doctor Star Stock 5.27% AGI Ainsworth Game Technology Limited Stock Doctor Star Stock 4.91% SEK Seek Limited Stock Doctor Star Stock 4.73% SRX Sirtex Medical Limited Stock Doctor Star Stock 4.26% TNE Technology One Limited Stock Doctor Star Stock 2.61% Senex Energy Limited Stock Doctor Star Stock 2.61% Small Industrials 6.64% CAJ Capitol Health Limited Stock Doctor Star Stock 3.77% GBT GBST Holdings Limited Stock Doctor Star Stock 1.46% IFM Infomedia Limited Stock Doctor Star Stock 1.41% Small Financials 5.19% CCP Credit Corp Group Limited Stock Doctor Star Stock 4.27% TRG Treasury Group Limited Stock Doctor Star Stock 0.92% Small Resources BC Iron Limited Stock Doctor Star Stock 1.59% TTN Titan Energy Services Limited Stock Doctor Star Stock 1.21% Cash 3.62% Key data Lincoln Wholesale Australian Share Fund Fund inception Lincoln Retail Australian Share Fund ETL0043AU ETL0089AU 11 January 2005 1 June 2007 Minimum initial investment $250,000 $20,000 Management costs 0.95% p.a. 1.75% p.a. Entry/exit fees Nil Nil Distribution frequency Average yield1 Half-yearly Half-yearly 2.0% 1.5% Entry/exit unit price2 Fund size2 $1.1423 / $1.1343 $0.8094 / $0.8038 Responsible Entity Investment Manager 1 Since inception as at 31 August 2014 2 As at 31 August 2014 We took positions in SEEK Limited (SEK), Sirtex Medical Limited (SRX), Infomedia Limited (IFM), Sonic Healthcare Limited (SHL) after they met Star Stock criteria following their latest results. The remaining portfolio was rebalanced to ensure it remains an equally weighted portfolio of quality Star Stocks. Like more information? Talk to us today to: Top up your current investment Learn more about Lincoln Managed Investments and Stock Doctor Call 1300 676 333 Visit lincolnindicators.com.au Email [email protected] 2.80% BCI APIR code BC Iron Limited (BCI) & Senex Energy Limited (SXY) were also de-flagged as Star Stocks and the Fund are in the process of removing these companies from the portfolio by the end of the month. 2.98% Large Industrials SXY The Fund sold positions in Computershare Limited (CPU), ResMed Inc. (RMD), G8 Education Limited (GEM), JB Hi-Fi Limited (JBH), as these companies no longer satisfied the Star Stock criteria. $62.95 million Equity Trustees Ltd Lincoln Indicators Pty Ltd Important information. This information is issued by the Investment Manager, Lincoln Indicators Pty Ltd (Lincoln) ACN 006 715 573, AFSL 237740. The Responsible Entity of the Fund is Equity Trustees Limited ABN 46 004 031 298, AFSL 240975. All figures, information and illustrations are as at 31 August 2014 unless stated otherwise. Portfolio holdings are subject to change without notice. This communication contains general information only. It has been prepared without taking into account the objectives, financial situation or needs of any individual investor. As a result, you should consider its appropriateness in regard to your particular objectives, financial situation and needs. You should also consider obtaining your own independent advice before making any financial decisions. You should read the Product Disclosure Statement (PDS) and the Reference Guide where references are made for additional information in the PDS for the Lincoln Australian Share Fund or Lincoln Australian Income Fund before making any decision about whether to acquire or continue to hold in either product. Applications to acquire units can only be made on an Application Form attached to a current PDS. You should also read and consider our Financial Services Guide (FSG), which sets out key information about the services we provide. A copy of each PDS, including the Reference Guide and our FSG are available by contacting Lincoln on 1300 676 333 or via our website www.lincolnindicators.com. au. Lincoln, its employees and/or associates hold interests in all companies listed in this communication except for JBH. This position may change at any time without notice. Investments go up and down. Past performance is not a reliable indicator of future performance. Lincoln will be remunerated based on funds invested. Neither Lincoln, Equity Trustees Limited, or their directors, employees or agents provide any guarantee, representation or warranty as to the reliability, accuracy or completeness of the information in this document; and do not accept any responsibility or liability arising in any way (including by reason of negligence) for errors in, or omissions from, this document. This disclaimer does not purport to exclude any warranties implied by law which may not be lawfully excluded. Neither Lincoln, Equity Trustees Limited, or their directors, employees or agents guarantees the performance of, or the repayment of capital or income invested in the Fund.
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