World’s best performing fund for past quarter: Crescent Wealth Australian Equity Fund

Sydney, Thursday October 17 2013 – Islamic fund manager Crescent Wealth’s Crescent Wealth Australian Equity Fund has recorded returns more than double the ASX 300 benchmark in the September quarter, ranking it as the world’s best performing Islamic equities fund in the period, according to Bloomberg. The fund was also the best performing Australian equities fund for the September quarter on Morningstar.

Australia’s first Islamic compliant managed fund, which invests only in Australian equities, returned 23.0% for the three months to September 30, significantly outperforming the 10.3% gain on the ASX 300 over the same period.

Issam Eid, portfolio manager for the Crescent Wealth Australian Equity Fund (CAEF), said the fund’s exposure to small caps during the quarter and individual stock picking, particularly within the resources, energy and mining services sectors, were the largest contributors to the high return.

“We believed that the market was holding down the miners and that a number of stocks were significantly undervalued and we have seen something of a fight back over the past few months,” Mr Eid said.

“At the same time, we took the view that valuations of large caps and defensive stocks on the Australian exchange looked expensive and we positioned our portfolio accordingly. Our fund is also precluded from investing in banks which proved advantageous as those stocks came off somewhat during the period.”

In the mining, resources and energy sectorsover the past six months, Crescent Wealth’s equities fund has invested in stocks in the gold, iron ore and mining services sectors (Independence Group NL, Oceana Gold Corp, Mount Gibson Iron Ltd, WDS Ltd and Titan Energy Services Ltd.) In the residential property and information technology sectors, the fund invested in companies including in GBST Holdings (GBT) and On the House (OTH).

“Looking forward over the next six to 12 months, we see continued upside to the CAEF portfolio and expect our holdings in natural resources and mining (BHP Billiton Ltd and Rio Tinto Ltd), IT (Runge Pincock Minarco Ltd and ASG Group Ltd), and consumer discretionaries (Harvey Norman Holdings Ltd, Vita Group Ltd and McPherson’s Ltd) to perform well,” Mr Eid said.

The Crescent Wealth Australian Equity Fund (CAEF), launched in late 2011, is Australia’s first licensed Islamic managed fund. It is open to all investors, including private and institutional. Through its Board of Islamic scholars, Crescent Wealth applies a number of filters to ensure all investments held in the fund are in accordance with Islamic principles. Industries that are prohibited include alcohol, tobacco, weapons, pork, conventional financial services, gaming and media.

Crescent Wealth’s Diversified Property Fund also performed strongly over the last two quarters returning 3.38% over the past quarter, outperforming the Morningstar benchmark by 2.0%

Portfolio Manager for the Crescent Wealth Diversified Property Fund, Andrew Smith, said there have been a number of standout performers for the fund over the last quarter, including Stockland and Charter Hall.

“Stockland has been a major beneficiary of the perceived uplift in demand for residential housing. This perception is starting to turn into reality as interest rates hover at generational lows. The residential names, of which Stockland is one, have traded well above net tangible asset backing in previous cycles as earnings grow at a rate well above the sector average,” Mr Smith said.

“The outlook for the property sector overall is still reasonable despite the prospect of rising bond rates. We like the REITs with cyclical exposure and good growth prospects. Since the GFC, volatility and gearing have declined to more normalised levels.”

Crescent Wealth’s Managing Director, Talal Yassine, said he was pleased about recent performance as it would highlight the potential for Islamic compliant financial products in the Australian market.

“There is enormous potential for Islamic funds in Australia mirroring the significant expansion we have seen in similar funds overseas. Crescent Wealth is proud to be the leading Australian pioneer in Islamic investing and will continue to work hard to deliver innovative products for investors,” Mr Yassine said.

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