Insync Global Capital Aware Fund
The Fund’s objective is to deliver global equity-like returns over rolling 5 year periods, while providing downside protection for severe market falls, to deliver beneficial results over the full cycle.
The Global Capital Aware Fund was established in 2009 and seeks to outperform the market over rolling 5 year periods, while providing defensive qualities during severe market falls, so as to produce a highly beneficial result to investors over a full market cycle.
The Insync Global Capital Aware Fund utilises Put Options as a means of providing an additional buffer against the depth and duration of major market falls. Their utilisation in the fund adheres to a strict process including when they are bought, held and sold and form part of our disciplined investment strategy.
The Fund’s objective for this class is to deliver global equity-like returns over rolling 5 year periods, while providing downside protection for severe market falls, so as to deliver a highly beneficial result to investors over the full cycle.
Insync adopts a two-step process to construct the portfolio for this strategy.
Step one
Insync employs efficient screens to narrow the universe of listed global companies to around 150 companies that it believes are superior, companies that have the potential to consistently grow their profits and dividends or buyback shares.
These screens are as follows:
| Profitability | High return on capital |
| Balance sheet | Strong balance sheet – flexibility to take advantage of growth opportunities |
| Shareholder friendly | Owner manager approach – growth in dividends and/or buybacks |
| Valuation | Trading at a discount to Insync’s assessed valuation |
Concurrently with the screening process, Insync focuses on global megatrends to identify companies that will significantly benefit from capturing structural growth which looks beyond the business cycle to exploit forward-looking opportunities.
A global megatrend can be defined as a gathering wave of change that is nearly impossible to reverse, significantly influences the future, possesses an aura of inevitability and has a far and wide-reaching
impact on society. Megatrends result from a convergence of different underlying trends including innovation, technology, natural events, politics, demographics, social attitudes and lifestyles.
Step two
Insync then takes this select list of highly profitable, shareholder-friendly companies and conducts due diligence on the most attractive opportunities. Preference is given to companies that have adopted a balanced approach to retaining earnings to grow profitability and paying out earnings, either through growing dividends and/or share buybacks.
Assessing the structure of the industry in which each company operates as well as the trend of a company’s return on its investment is important. Insync believes this research will identify those businesses which can consistently compound shareholder wealth at superior rates of return over the long term.
Portfolio structure
The outcome of the two-step investment process is, in Insync’s view, a portfolio consisting of superior companies, with good long-term growth potential that has many of the following attributes:
- high return on invested capital,
- major beneficiary of a global megatrend,
- difficult-to-duplicate assets that protect the durability of the franchise,
- asset-light businesses,
- recurring, annuity type revenues,
- high gross margins,
- resilient and proven business model,
- strong balance sheet and free cash flow generation, and
- owner-manager approach where management retains a portion of free cash flow to grow the company’s future profitability, where the returns on capital are strong, and payment of dividends or share buybacks is evident.
Insync will carefully construct a concentrated portfolio of the best ideas from the select group of superior companies. Investment weightings will vary significantly from benchmarks and, as such, the Fund’s performance will differ from indices.
The number of companies held in the portfolio will generally be between 20 and 40.
The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia).
The Fund may also hold cash, currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled vehicles. Financial instruments such as forward contracts or listed options can be used to manage exchange rate risk and market risk.
At times, Insync may consider it prudent to hold higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities.
Insync may use options, futures and other derivatives to reduce risk (such as currency risk) and gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. Derivatives will not be purchased for the purpose of gearing the Fund. Insync will closely monitor derivative positions to ensure that the Fund can meet all derivative contract obligations from the cash or physical assets held by the Fund.
Top 10 Active holdings (May 2024)
| Holding | % of Portfolio |
| Otis Worldwide Corp | 4.0% |
| Nintendo Co Ltd | 4.0% |
| Booking Holdings Inc | 3.8% |
| Meta Platforms Inc - Class A | 3.7% |
| Mckesson Corp | 3.7% |
| Procter & Gamble Co | 3.5% |
| Wolters Kluwer | 3.5% |
| Alphabet Inc-CL C | 3.4% |
| TJX Companites Inc | 3.2% |
| Rightmove PLC | 3.2% |
Top 10 Active Holdings (May 2024)
May 2024 Funds Performance
Equity Trustees Limited (“EQT”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Insync Global Quality Fund and the Insync Global Capital Aware Fund. EQT is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). This information has been prepared by Insync Funds Management Pty Ltd (ABN 29 125 092 677, AFSL 322891) (“Insync”), to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Insync, EQT nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.
A Target Market Determination is a legally required document you should examine before investing with us. It describes who this financial product is likely to be appropriate for, and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed. You can read our TMD here.
Insync believes that investing in a concentrated portfolio of high-quality companies with a long runway of growth opportunities will lead to superior returns over time. They do this through stock selection from a select pool of global companies that they consider exceptional and benefiting from global megatrends. Combining this with active management of downside market risks, Insync also seeks to enhance portfolio protection during significant equity market falls.
Insync’s focus on seeking quality businesses has driven the decision to build an investment team with individuals who have investment skills and real business experience. Insync believes that a team that combines these skills will lead to better investment decisions.
Insync’s Chief Executive Officer is Garry Wyatt who is responsible for managing the operational aspects of the business as well as being a key investment team member. Garry has held senior financial positions with several major companies including WMC Resources Limited, Tooheys (Victoria) and United Distillers Group.
Insync’s focus on investing in quality businesses has driven the decision to build an investment team with individuals who have investment skills and/or real business experience. We believe that a team that combines these skills will lead to better investment decisions. Garry’s extensive business and commercial experience will enable him to provide valuable insights when assessing the quality of the investment, a core part of Insync’s investment process.
Garry brings to Insync a wealth of experience across a range of important business functions including financial controls, project and operational management, internal audit, business and strategic planning. Garry has a Bachelor of Economics degree and is an Associate of the Institute of Chartered Accountants in Australia.
Insync has developed an outsourcing model where all non-investment functions are outsourced to external service providers leaving the team to focus on managing the Fund. Garry manages these key relationships as part of his role.
Monik Kotecha has 25 years of funds management experience in international and Australian equity markets, including 15 years of managing top-quartile performing portfolios. He has worked in London, New York and Sydney. He spent over 7 years as a Senior Portfolio Manager at Investors Mutual Limited, 5 years with BT Funds Management Limited and 3 years with the Abu Dhabi Investment Authority.
Monik was a Senior Portfolio Manager of the Australian Share Fund at Investors Mutual Limited and a key member of the Investment Team which was awarded Fund Manager of the Year Australian Equities in 2002 and 2003 by Money Management. Prior to this Monik was the lead portfolio manager for over 5 years at BT Funds Management Limited on a number of international equity funds and was a member of the asset allocation team. Monik spent the first few years in funds management as a Pan European Equity analyst at the Abu Dhabi Investment Authority in London.
Grant’s 31 years of industry accomplishment spans Australasia and North America, across both the Buy and Sell sides of the industry. His experience encompasses funds management, life insurance, investment banking, broking and the retail advisory sectors. Roles include Senior Vice President for Merrill Lynch Private International, Head of Advice for AMP FP ($36Bn FUA in 2005), National Sales Head for ING (Aust), Head of Investments for ABN AMRO (Aust), Strategy Head for AXA Asia Pacific and various general manager roles running funds management and advice businesses within ING and MLC/Lend Lease. This combination of local and global markets, three investment cycles and technical exposure to several asset classes and product sets has provided Grant with unique insight and understanding of the retail investing marketplace. Whilst his senior roles centered upon distribution, he has substantial experience and skills in compliance, marketing and product/platform design. His industry qualifications include a diploma in financial planning, obtaining his Series 7 and Series 66 (FINRA –USA) and as an ASIC registered Responsible Officer and a Key Person for several AFSLs. Grant has been with Insync since late 2016, and prior to that was a key client of Insync for 5 years when it advised on a $105Mn IMA that Grant was overseeing.
May 2024 Update.
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