Switzer Dividend Growth Fund November 2022 Portfolio Update

Welcome to the November 2022 Investment Update for the Switzer Dividend Growth Fund (SWTZ or the Fund). Click here to download the report.

Performance Summary

The portfolio delivered a return of 4.65% in November 2022 compared with the S&P/ASX 200 Accumulation Index benchmark return of 6.58%.

Over the past 12 months, SWTZ has paid a distribution yield of 5.77% or 7.65% including franking credits. Distribution yield is calculated as the distributions received over the 12 months to 30 November 2022 relative to the price at the beginning of the period.

Given its focus on income and capital preservation, over the long term we expect SWTZ to marginally underperform in rising markets and marginally outperform in falling markets.

Portfolio Commentary

The ASX 200 rose +6.6% in November, extending its rally to ~+14% from its market low in October. Strong gains were led by Utilities (due to a takeover offer for Origin Energy) and the Mining sector which benefited from renewed optimism of a China re-opening. Overall, equity markets were supported by better-than-expected inflation data suggesting that central banks could slow the pace of interest rate rises.

At a portfolio level, BHP Group, Northern Star and Ramsay Health Care were the best-performing stocks. Whereas, Santos, Healius, and Waypoint REIT underperformed.

The Fund actively engaged with several companies in the portfolio during November. These recent discussions yielded the following insights:

Amcor (AMC)

  • Q1 volumes were impacted from de-stocking and more cautious consumers, particularly across beverages, premium coffee capsules and pet food. Healthcare was the exception, delivering double digit growth as activity levels in hospitals and demand for pharmaceuticals recovered.


  • Plasma collection is tracking strongly as demand for CSL’s Behring plasma therapy products continue to pick up. CSL is currently selling everything it can make in plasma. As such, plasma inventory levels remain low and will need to be rebuilt in 2023.
  • Synergies from the recent acquisition of Vifor (iron deficiency & nephrology) are tracking to schedule.

Endeavour Group (EDV)

  • EDV delivered a better-than-expected 1Q23 result, driven by strength in its hotel business.
  • Consumer demand and preference for premium products remains robust heading into the Christmas period.
  • Whilst EDV is experiencing a strong seasonal boost for Christmas, there is an expectation that sales will normalise into 2023.

Healius (HLS)

  • HLS provided a trading update for the four months to October 2022 which was materially below market expectations with EBITDA margins falling year-on-year from ~38% to ~20%. The unwinding of COVID-19 PCR testing was faster than the unwinding of associated costs (as infrastructure has largely remained in place for future outbreaks).
  • Recovery in base pathology and diagnostics partially offset the decline in PCR volumes.

Medibank Private (MPL)

  • While investigations into the recent cybercrime incident are continuing at an operational and regulatory level, MPL indicated that net impact to policyholders lapsing their cover has been minimal.

Ramsay Health Care (RHC)

  • Medicare data points to a strong recovery in surgery volumes (+8.5% year-on-year).
  • Australian surgical volumes have accelerated in FY23 and in some states returned to pre COVID-19 levels. Recovery in non-surgical and mental health patients has been slower and remains below pre COVID-19 levels.
  • Forward surgical bookings are strong into the New Year.

Investment Objective

The Switzer Dividend Growth Fund is an income-focused exchange-traded managed fund with a mix of yield and quality companies. The objective of the Fund is to generate an above-market yield while maximising franking where possible and deliver capital growth over the long term.

DISCLAIMER: AGP Investment Management Limited (AGP IM) (ABN 26 123 611 978, AFSL 312247) is a wholly owned subsidiary of Associate Global Partners Limited (AGP) (ABN 56 080 277 998), a financial institution listed on the ASX (APL). AGP IM is the Responsible Entity and Vertium Asset Management Pty Ltd is the investment manager of Switzer Dividend Growth Fund (Quoted Managed Fund) (ARSN 614 066 849) (the Fund).

This material has been prepared for general information only. It does not contain investment recommendations nor provide investment advice. It does not take into account the objectives, financial situation or needs of any particular individual. Investors must, before acting on this material, consider the appropriateness of the material.

Any references to ‘We’, ‘Our’, ‘Us’, or the ‘Team’ used in the context of the portfolio commentary, is in reference to Vertium Asset Management Pty Ltd, as investment manager for the Fund.

Neither AGP IM, AGP, their related bodies corporate, entities, directors or officers guarantees the performance of, or the timing or amount of repayment of capital or income invested in the Fund or that the Fund will achieve its investment objectives. Past performance is not indicative of future performance.

Any economic or market forecasts are not guaranteed. Any references to particular securities or sectors are for illustrative purposes only and are as at the date of publication of this material. This is not a recommendation in relation to any named securities or sectors and no warranty or guarantee is provided that the positions will remain within the portfolio of the Fund.

Investors should seek professional investment, financial or other advice to assist the investor determine the individual tolerance to risk and needs to attain a particular return on investment. In no way should the investor rely on information contained in this material.

Investors should read the Fund’s Product Disclosure Statement (PDS) and consider any relevant offer document in full before making a decision to invest in the Fund. The Fund’s Target Market Determination and other relevant information can be obtained by visiting www.associateglobal.com.