Page 1 - SMA changes Specialist Growth
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SMA Portfolio




               Change Rationale






               Private Wealth Specialist Growth (Moderate and Assertive)





               As at 4 May 2023



               Portfolio Rebalance

               Following a review of your portfolio, we have reconfirmed our conviction in the target weights (ie
               allocation to each investment). Market movements have resulted in a shift in the actual weights of
               the investment options away from the target weight. In light of this, we have rebalanced your
               portfolio, to realign the weight of each holding, back to the target weight.

               We have also made changes to two of the direct stocks currently in the portfolio. Details below.



               Sold Seven Group Holdings (SVW) and LendLease Group (LLC)
               Seven Group Holdings Limited (SVW) is a diversified opera�ng and investment company with a
               por�olio of industrial services, media, property, and other investments. SVW has large exposure to the
               construc�on industry which we expect to slow from here due to the weakening economic
               environment and fast pace of interest rate rises. This environment will hinder earnings growth over
               the coming years, which we feel is not being reflected in the current valua�on. Gearing levels within
               the business are higher than we would like at this point in the cycle and the stock is currently trading
               in line with its historical average valua�on which we view as too high given our nega�ve outlook for
               the business. We have sold the stock to allocate to beter opportuni�es elsewhere.

               LendLease Group (LLC) is an interna�onal property and infrastructure group. Management have
               historically failed to achieve their stated objec�ves and the stock has suffered as a result.
               Management strategy has improved more recently, but from a low base and in an environment where
               the market is growing increasingly impa�ent regarding the turnaround. Margins in the construc�on
               division are slim, which are at further risk in the weaker economic environment expected ahead. The
               stock appears atrac�vely valued. However, it looks increasingly likely that only a takeover will provide
               some of that upside all whilst the economic backdrop in the short term weakens. A bid for the stock is
               unlikely in the current environment. Given the absence of addi�onal catalyst to li� the share price, we
               believe there are beter opportuni�es elsewhere.
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