Firetrail Analyst Series | A new lease on life for this property stock?

Firetrail Analyst Series | A new lease on life for this property stock?

 

In the third iteration of the Firetrail Analyst Series we take a deep dive into Australian developer, Lendlease. Portfolio Manager, Blake Henricks, takes us through the strong development pipeline, and why we think this company offers compelling long-term value.

 

This communication was prepared by Firetrail Investments Pty Limited (ABN 98 622 377 913, AFSL 516821) (Firetrail) as the investment manager of the Firetrail  Australian High Conviction Fund (ARSN 624 136 045) (the Fund). It is for general information only. It has been prepared without taking account of any person’s objectives, financial situation or needs. It is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. Any persons relying on this information should obtain professional advice before doing so. Past performance is not a reliable indicator of future performance.

The Fund is issued by Pinnacle Fund Services Limited (ABN 29 082 494 362, AFSL 238371) (PFSL). PFSL is not licensed to provide financial product advice. The relevant Product Disclosure Statement (‘PDS’) is available at www.firetrail.com. Any potential investor should consider the relevant PDS before deciding whether to acquire or continue to hold units in a fund. Please consult your financial adviser before making a decision.

The big money is made in the waiting

The big money is made in the waiting

Patrick Hodgens, Managing Director & Portfolio Manager

The most common question investors are asking me today is, “Is now the time to go to cash?”

Volatility, uncertainty, complexity, ambiguity. This is the reality equity investors face. Add in the risks of trade wars, geopolitical tensions, climate change, sky high valuations in parts of the market and the threat of a pandemic and you can understand why some investors are questioning whether the risks are skewed to the downside.

Looking forward to 2020 and beyond, how do you position for such a challenging investment environment? This article provides some key learnings from over 30-years investing in equity markets. It addresses the perils of market timing, key considerations for investors and how to maximise your long-term returns. In the end, time in the market is what counts. Legendary investor Charlie Munger from Berkshire Hathaway sums it up best, “the big money isn’t in the buying and selling… It’s in the waiting.”

30-years in Australian equities

Over the past three decades, investors in the Australian equity market have been through some challenging market conditions. The chart below highlights some of the most difficult periods for me as an investor. The Asian Crisis, September 11, the GFC, fears of global growth slowing (x2) and now Wuhan coronavirus. When you are in the moment, the risks you are facing seem insurmountable. But the chart also provides what is increasingly becoming a unique perspective – a long-term view.

Source: Factset

When you put the fears and uncertainties of the past into perspective over a longer time horizon, they are generally overstated. The market recovers. And patient, long-term investors have been rewarded. The Australian equity market has delivered over 9% per annum since 1992, for those that have stayed invested.

The perils of timing the market 

Compounding at over 9% per annum since 1992 results in some seriously impressive returns. As the chart below highlights, if you invested $1,000 in 1992 and stayed invested in the Index, that initial investment would be worth $11,855 today. But what if you could time the market and avoid the 10 worst performing days in the market over the past 30 years?

The results are impressive. Avoiding the 10 worst performing days (green) in the market almost doubles your return on an initial $1,000 investment to $22,457. So, market timing works, right? Well unfortunately it gets a lot more complex when you analyse the data. Because not only do you have to avoid the worst days. You must also stay invested during the best performing days. As the chart below shows, missing the 10 best performing days (orange) resulted in a loss of almost half of your potential gains vs simply staying invested in the Index. Market timing can be very lucrative… but also very costly to long-term returns. 

Source: Firetrail Research, Factset

To make matters even more challenging, the biggest daily gains in the equity market are closely followed (or preceded) by the biggest daily losses. Large gains and losses tend to cluster. With the largest gains/losses in the past three decades clustering around the Asian Crisis/tech stumble, the GFC, The EU Sovereign Debt Crisis and during concerns around slowing China/Global growth. The increased volatility during these periods increases risk to the upside and the downside.

Getting it wrong by a month

One month can make all the difference. The chart below highlights all the major market downturns during the past 25-years, including the event and the duration. There were 17 negative returns of over 7%, with an average drawdown of 15%.

Source: Firetrail Research, Factset

What is clear from the data is that if you could time the market, avoiding the 17 largest equities market drawdowns over the past 25 years would have added significant value to your investments. However, could you have predicted the catalysts and the timing to perfection? The statistical chance of getting every market timing call right to the day is about one billion to one.

The odds are not in your favour. Even IF you managed to pick every one of the downturns (Ex-the GFC), your timing needs to be perfect. Being wrong by just one month (eg. one month late) would have resulted in you underperforming the Index over the long-term.

Source: Firetrail Research, Factset

Now the exception to the rule was the GFC, which peak to trough fell over 50%. If you picked the GFC, you would have outperformed. But consider this. The market has just fallen 50%. All your friends, family, and clients have been impacted. You’ve made the call to move into cash, just in time to witness one of the worst crashes in history… Are you now brave enough to go ‘all in’ with your equity exposure on April 2009?

Between April 2009 and December 2009, the Australian equity market rallied over 60%. The biggest upswing the market has seen in the last 30-years was straight after the worst downturn. And it happened within 8 months. Part of the challenge is getting back into the market quickly enough, often very quickly after your decision to sell into cash (not to mention the trading costs associated with this strategy). How do you know the right time to make the move? This makes market timing very difficult, if not practically impossible.

‘Trumped’ timing: A case study in market timing

In August 2016, I reached out to 30 different professional investors, CEO’s and market experts to ask them two simple questions:

  1. Can Donald Trump win the US election?
  2. If he does win, what will the subsequent direction of the share market be?

80% of respondents told me that Hilary Clinton would win the 2016 election. It seems obvious with hindsight that wasn’t going to be the case. But at the time, this view was consistent with polling and betting markets which gave Clinton a 5 to 1 probability of becoming the next US President.

The answer to the second question was even further from the truth. 95% of respondents said that if Trump did win, equity markets would fall by 10% (on average). As the probability of Trump winning increased in the lead up to the election, equity markets started to fall. The first chart below highlights what happened when Trump was announced as US president in November 2016. Some of the most successful CEO’s and investors in the country got not only the result wrong, but the direction of the share market wrong too.

More recently in Q4 2018, inflation had reared its head and the risks of global trade wars escalated further. The market reacted swiftly, selling off global and Australian shares which fell over 10% during the quarter. However, on the back of no new news, the market direction changed on 23 December 2018. Urged on by a pivot in the US Fed policy toward an easing bias, the market subsequently increased by over 26% in the next 9 months – and has continued to rise to new heights today. As the second chart below shows, investors who moved into cash, had to move back into equities swiftly in order to capture the subsequent gains.

Source: Factset

The lesson for investors, is that market timing is a high risk, low return strategy. Making the decision to move from equities into cash is one of the most difficult decisions an investor can make. As legendary investor Peter Lynch warns, “Far more money has been lost by investors trying to anticipate corrections… than has been lost in corrections themselves.”

Are you an investor or a trader?

One key question you can ask yourself during times of increased volatility, uncertainty, complexity and ambiguity is am I an investor or a trader? There are some key distinctions:

  • An equity investor: Looks to generate returns over the medium to long-term (5-7+ years). They are cognisant of short-term risks, but position for the long-term opportunity. Fundamental valuations, a longer time horizon and rational decision making are part of an investor’s toolkit;
  • An equity trader: Makes trading decisions based on short-term news. Often overreacts to headlines. Incorrectly extrapolating information into the future. High trading, high frequency decisions and the latest headlines are part of the trader’s toolkit.

Whether you view yourself as an investor or a trader can have a material impact on your decision-making. In my view, investors have a distinct advantage in equity markets given their longer time horizon. Volatility, fear and uncertainty can create opportunities to buy companies at a material discount to their intrinsic value. Taking this approach in the short-term may be uncomfortable. But over the long-term, some of the best investment decisions I’ve made started as uncomfortable opportunities.

How to maximise your long-term returns

Who are Australia’s best investors? Well, the typical Aussie homeowner must be in the top decile.

Why are they such effective investors? Time and patience. The average holding period for an Aussie homeowner is over 7 years (approximately 7-8 years for units and 9-10 years for homes).

Taking a longer-term view of 7-years or more can significantly increase your chance of investing success. For instance:

  • Since 1994, the average Australian home price has increased by over 7% per annum. And over any rolling 7-year period, house prices have always appreciated.
  • Over the same rolling period, the Australian equity market has never delivered a negative return. Including during the GFC! On average the Index has delivered over 9% per annum, in any rolling 7-year period.
  • And as the chart below highlights, active management has also delivered when you take a longer-term view. Particularly managers that take a concentrated approach have delivered more than 2% per annum above the Index on average, over any rolling 7-year period (after all fees).

Source: Firetrail Research, Morningstar Australian Equities Universe Data, Corelogic, ABS, Factset

The implications are material when it comes to making investment decisions. Taking a 7-year view can significantly improve your chances of investment success. Whilst today the debate regarding active vs passive management has hit fever pitch levels, over the long-term active managers have delivered. And when comparing active managers across the universe, a highly active, concentrated approach works best.

Conclusion: Is now the time to go to cash?

Volatility, uncertainty, complexity and ambiguity. These are the conditions investors face today. While we can speculate on where equity markets will go in 2020 and beyond, the simple truth is we don’t know the answer. Risks are elevated. But when I look across the equity market, so are the opportunities.

Positioning for this kind of environment is challenging. One of the best questions you can ask yourself is “are you a trader or an investor?” For investors, the key is to make sensible, long-term capital allocation decisions, and to stay patient. The big money isn’t made in the buying and selling. It isn’t made trading in and out of the equity market. The big money is made in the waiting. For patient, long-term investors, there are always opportunities to add value. But timing the market isn’t one of them.

DOWNLOAD RESEARCH INSIGHT

Firetrail Investments Pty Limited ABN 98 622 377 913 (‘Firetrail’), Corporate Authorised Representative (No. 1261372) of Pinnacle Investment Management Limited ABN 66 109 659 109 AFSL 322140.

Any opinions or forecasts reflect the judgment and assumptions of Firetrail and its representatives on the basis of information at the date of publication and may later change without notice. Any projections contained in this article are estimates only and may not be realised in the future.  The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. This communication is for general information only. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice relevant to their particular circumstances, needs and investment objectives. Past performance is not a reliable indicator of future performance.

Firetrail believes the information contained in this communication is reliable, however its accuracy, reliability or completeness is not guaranteed and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Firetrail disclaims all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information.

Active is dead, long live active – The rise of passive

Active is dead, long live active – The rise of passive

Patrick Hodgens, Managing Director & Portfolio Manager

Passive investing continues to grow in popularity. In the US alone, 50% of equities are invested via passive strategies. While low fees are an attraction, history has shown multiple instances of material capital loss from allocating to passive strategies. Two major events include, the de-rating of Japan in the 1990’s and the fall of Nokia in Finland. Today, we believe there are three big risks bubbling away in passive strategies including valuation distortions, unproven investment strategies and the implications of rules-based decisions.

Passive strategies are growing in popularity

Today, half of all money invested in US equity funds is through passive exposure. If the trend continues, 100% of US equities exposure will be passive within 20 years. In Australia, passive investing and ETF’s are also on the rise, now accounting for almost 30% of the equity market.

Source: Firetrail Research

What has driven the rise of passive investing? In our view, there are three key factors:

1. Low cost, ease of access – Passive strategies that track a market cap weighted index such as the S&P 500 and S&P/ASX 200 provide a low cost, efficient way to access the market. As leading passive providers such as Vanguard, State Street and Blackrock have emerged costs have further reduced and access to passive strategies has become easier.

2. Traditional active management has not delivered – On average, many active managers have failed to deliver returns above the index. In part due to higher fees and costs. But also due to the competitive nature of investing and the difficulty in outperforming the average investor consistently through time.

3. Ability to implement active views through passive vehicles – Today there are thousands of different variations of rules-based strategies such as Income, Growth, Quality, Low-Vol, Tech, Gold… you name it! Everyday investors can now access numerous passive vehicles and ETF strategies as a low-cost alternative to active management. However, the risks in these strategies are not always well known or understood.

The above factors, combined with a better understanding of performance drivers across markets, means that investors are now only willing to pay for performance that is truly differentiated to the Index (alpha). Whilst implementing everything else cheaply through passive exposure (beta).

The trends are clear. Passive strategies continue to grow in popularity. However, despite the benefits, there are risks associated with passive investing that you should consider.

History has shown that passive strategies are NOT risk-free

Passive investing is low risk relative to a benchmark. In fact, you are almost guaranteed to receive the index, less fees. However, total or absolute risk is what matters to most investors. That is, the permanent (or avoidable) loss of investors’ money. And history has shown multiple instances of material capital loss from following passive strategies.

Japan in the 1990’s

In 1989, Japan had emerged as an economic superpower and investors were excited. So excited, that in 1989, the trailing PE for the Japanese stock market hit 60x. And the Nikkei (MSCI Japan Index) accounted for around 42% of the MSCI World Index (the largest country exposure at the time).

However, Japan’s strong economic growth ended abruptly at the beginning of 1990. To curb excessive loan growth, rising inflation and a growing asset price bubble, the Bank of Japan sharply raised the interbank lending rate in 1989. The swift policy
change, combined with the unwinding of excessive cross-company holdings, became the catalyst that burst the Japanese stock market bubble and saw the Nikkei fall more than 50% from its peak in December 1989 to trough in July 1992.

Passive investors were significantly impacted. Over the period, the MSCI World Index lost 7%. In contrast, the MSCI World Ex-Japan delivered a positive 23% return. Many professional active managers were underweight Japan over the period. A 10% underweight resulted in 7.3% outperformance of the Index. Having zero exposure to Japan delivered 30% outperformance of the benchmark – a meaningful difference.

Source: Firetrail Research

The rise and fall of Japan wasn’t the only time passive investors have lost significant capital. History is littered with examples of
capital loss resulting from the composition of an underlying index:

  • The fall of Nokia in Finland – Between 1993 to 2004, Nokia grew from 10% to more than 80% of the Helsinki Stock Exchange. Today, Nokia has fallen to 20% of the index following the disruption of mobile phones by smart phones.Whilst many investors benefitted from the rise of Nokia, the fall resulted in permanent capital loss for passive investors following the index.

  • Australian Banks – Make up almost one quarter of the S&P/ASX 200 Index. Following an extended period of outperformance, Australian Banks have underperformed the Index by approximately 6% per annum for the last 4 years. Many active managers (including Firetrail) have owned less Banks than the index, allocating capital to better opportunities to deliver outperformance for investors.

  • MSCI All Country World Index – Currently has less than 4% total exposure to China, the 2nd largest economy in the world. The largest economy (the US) accounts for 55% of the Index. Being underrepresented in China results from the rules-based methodology used to construct the index. For passive investors, this is a risk of following an index. For active managers, these misallocations of capital are an opportunity.

Three big risks we see today in passive strategies

Today, there are three big risks in passive strategies we believe every investor should be aware of. These include:

1. Valuation distortions – Passive investors rely on active investors to keep the market efficient. The rise of passive exposure relative to active means there is less money in the market focused on price discovery. With less active ‘price seekers’ and more passive ‘price takers,’ the potential for price distortions can increase. Is this good or bad for active investors? In short, the answer is both. Less efficiency = more opportunities. However, research shows that stocks with high passive ownership react less to surprises. So, in the short-term, active ‘price seekers’ may not be rewarded. However, opportunities to profit from mis-pricings across the market may become more abundant and extreme over the long term. The key to capturing these is staying patient and taking a long-term view.

2. Unproven investment strategies – Have emerged across the market. ETFs that invest in a specific theme, sector or industry have become increasingly popular. According to ETF.com, there are more than 77 Technology based ETFs in the US managing $100bn (USD). Over the past 3-months alone, the performance of these ETFs has ranged from +42% to -50%. A major divergence over a short period. Other ETFs of note include Robotics, Artificial Intelligence and Cannabis. These strategies are often targeted at direct investors who may not fully understand the risks and volatility in the underlying portfolios.

3. Rules-based decisions – The availability of passive strategies such as value, growth, quality and yield have opened-up the ability to express active views via passive vehicles. But can a simple rules-based approach deliver? We have seen examples where they haven’t, particularly in the ‘income’ style strategies which look to own high dividend yield stocks to provide income for investors. To deliver on the investment goal of income, the rules will typically look for historical dividends as well as forecast dividends. But what if something is changing. 

  • In March 2015, an offshore high yield index provider incorrectly rebalanced its portfolio to Australian listed company Monadelphous Group. A large global ETF manager following the index started buying and ended up owning more than 20% of the company. The Monadelphous share price had rocketed to +50% and within the month, fell straight back down to its original price once the ETF provider had picked up the error and promptly sold its shares.

  • In March 2019, shares in Australian Fund Manager Perpetual soared over 12% on no new company news. Prompting speculation of a takeover. A substantial shareholder notice filed by a global ETF provider days later explained the sudden elevation of the share price, which subsequently fell back again. A $6 billion ETF had purchased US$100 million worth of Perpetual shares for its yield characteristics, without regard for the company’s size or liquidity.Companies are also being included in conflicting ETF strategies. For example, a US oil major, Exxon, has representation across Market Cap, Value, Growth, Dividend, Min Vol & Quality ETFs. Australian energy company AGL, is included across four different major ETF styles. How can a company be value, quality and growth? And are company management now incentivised to meet simple rules-based criteria of ETFs to generate passive flows into their firms? What is clear is that rules-based decisions can distort share prices well beyond the fundamentals of a business.

Conclusion

Passive investing continues to grow rapidly. Low cost, ease of access and innovation has driven the rise of passive. New innovations such as rules-based strategies and ETFs has seen passive flows increase further as investors implement active decisions through passive vehicles. However, history has shown that passive investing is not risk-free.

In our view, three key risks of passive investing include valuation distortions, unproven investment strategies and rules-based decisions. These risks are creating new opportunities for active managers to take advantage of mis-pricings across equity markets. The key question is, which active managers are positioned to take advantage of these opportunities? Part 2 of our research, ‘The future of active’, is being released in December and aims to answer this important question.

DOWNLOAD RESEARCH INSIGHT

Firetrail Investments Pty Limited ABN 98 622 377 913 (‘Firetrail’), Corporate Authorised Representative (No. 1261372) of Pinnacle Investment Management Limited ABN 66 109 659 109 AFSL 322140.

Any opinions or forecasts reflect the judgment and assumptions of Firetrail and its representatives on the basis of information at the date of publication and may later change without notice. Any projections contained in this article are estimates only and may not be realised in the future.  The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. This communication is for general information only. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice relevant to their particular circumstances, needs and investment objectives. Past performance is not a reliable indicator of future performance.

Firetrail believes the information contained in this communication is reliable, however its accuracy, reliability or completeness is not guaranteed and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Firetrail disclaims all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information.

Growth vs Value (Part 2) – Are value stocks at an inflection point?

Growth vs Value (Part 2) – Are value stocks at an inflection point?

James Miller, Portfolio Manager

Are value stocks at an inflection point?

In almost 20 years of Australian equity market data seen in the chart below, we have observed five distinct growth and value cycles as defined by MSCI Australia. The most recent of these market cycles started around January 2017, a period where ‘growth’ companies have outperformed ‘value’ stocks by approximately 16% p.a. as indicated by the upward sloping trendline.

Source: MSCI Australia

The recent outperformance of growth vs value stocks has led to some market commentators to ask the question, ‘Is value investing dead?’

However, in September 2019 we saw Australian ‘value’ stocks stage a short and sharp recovery, outperforming growth by approximately 4%. And whilst one month’s data point is not a trend, it is a timely reminder that markets move in cycles. And this market cycle is as likely to come to an end as previous growth cycles have done in the past. So, is this the turning point for value stocks? This is a topic we covered in detail in a recent article here.

What factors could have triggered the sudden reversal in trend for value?

With the benefit of hindsight, there are several factors that contributed to the sudden reversal in the trend for value. The most powerful of these was the calming of geopolitical risk. In particular, the de-escalation and potential calming of the trade war between the US and China, as well as a higher probability of a Brexit deal between the UK and Europe.

The above factors triggered a rise in bond yields. Growth and defensive assets subsequently underperformed. And value outperformed. But the rally in value has been relatively subdued. To get a broad-based and sustained rally in value stocks, fiscal stimulus is required to ‘lift all boats’ across the economy, rather than just low interest rates driving asset prices higher.

As an investor, how do you position your portfolio for potentially sharp changes in market cycles? Our approach is to focus on bottom-up stock selection, take a longer-term view, and invest in the best growth AND value companies we can find across the Australian market. We don’t try to predict the next Trump tweet or try to time the turning point in growth and value cycles (both of which we believe are near impossible to predict). Instead, we focus on the company specific opportunities and aim to buy companies at a material discount to their intrinsic value. This allows us to buy undervalued growth and value companies and largely ignore things we can’t control or predict.

Our top pick from today’s value stocks

One of our top picks for 2019 was Nufarm, an Australian company that specialises in chemical crop protection globally. Our investment thesis for Nufarm was covered in detail in a December 2018 article titled, ‘Our number one stock pick for 2019.’

Since writing the article less than 12-months ago, the share price performance of Nufarm has been volatile. The company has dealt with multiple headwinds including two consecutive droughts in Australia and flooding in the US. However, the investment thesis remains intact and we continue to remain patient investors in Nufarm for the long-term. Nufarm is now trading at similar levels to when we first wrote the article, however the chart below highlights that investing in value stocks requires conviction and a longer-term mind-set. It is not for the faint-hearted.

Source: Factset

With that in mind, we move on to our pick for today’s most compelling value stock, Clydesdale Bank.

Clydesdale is materially undervalued, trading on less than 0.5x book value. When we look across the developed market, Clydesdale stacks up as one of the cheapest banks globally. To put the valuation into context, Australian banks trade anywhere between 1.4x to 2.0x book value. So, why is Clydesdale so cheap?

One reason is Brexit. All UK banks are trading at historically low multiples because of Brexit uncertainty. Importantly, we do not know what the outcome of Brexit will be. However, the UK is the world’s 5th largest economy and banking is an integral part of that economy. The UK mortgage market is continuing to grow despite the uncertainty caused by Brexit and Clydesdale is a UK focused business with no European passport issues like some if its major UK banking peers. As long-term investors, the share price reaction to Brexit has created an opportunity to be greedy when others are fearful and buy a good business at a material discount to its historical multiple and peer valuations.

The second reason Clydesdale is undervalued is the company has disappointed on earnings expectations, post the acquisition of Virgin Money in 2018. Short-term earnings downgrades by the company have been disappointing. However, we believe the longer-term prospects from the Virgin acquisition are compelling given it provides Clydesdale with: 

  1. A compelling brand (Virgin) – which resonates in key growth areas for the business. Particularly in metro areas such as London where Clydesdale did not have a strong brand or presence.
  2. Strategic synergies and cost-out opportunities – delivered by a management team with a solid track record delivering on cost-out targets.

Putting the revenue and cost opportunities together, we believe Clydesdale can grow earnings over the next few years, despite the challenges that Brexit and acquiring a new business represent. At current prices, the market believes that things will not get better for Clydesdale from here. However, experience has taught us that some of the most compelling value opportunities are in unloved companies in an unloved sector. At 0.5x book value, Clydesdale is a compelling value opportunity for the patient, long-term investor.

DOWNLOAD RESEARCH INSIGHT

Firetrail Investments Pty Limited ABN 98 622 377 913 (‘Firetrail’), Corporate Authorised Representative (No. 1261372) of Pinnacle Investment Management Limited ABN 66 109 659 109 AFSL 322140.

Any opinions or forecasts reflect the judgment and assumptions of Firetrail and its representatives on the basis of information at the date of publication and may later change without notice. Any projections contained in this article are estimates only and may not be realised in the future.  The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. This communication is for general information only. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice relevant to their particular circumstances, needs and investment objectives. Past performance is not a reliable indicator of future performance.

Firetrail believes the information contained in this communication is reliable, however its accuracy, reliability or completeness is not guaranteed and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Firetrail disclaims all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information.