10 Nov 2014
The Cyan C3G Fund retraced just 0.3% after all fees in October. Volatility was the major theme with Cyan’s most relevant indicator, the Small Ordinaries Accumulation Index, having dropped 5.0% halfway through October before recovering to finish down 0.5% at month’s end.
The Fund has now been invested for 3 months and has outperformed the Small Ords Accumulation by 5.4% and the All Ords Accumulation by 2.7% after all fees.
THE CYAN C3G PORTFOLIO
Below are some of the investment decisions contributing to our performance through October and positioning the Fund for the months ahead.
We were rewarded for our position in telecommunications retailer Vita Group (VTG). At its AGM the company announced plans to “pay a number of special dividends”. The first has been declared at 3cps to be paid in early December. The stock was up 4.5% for the month and the ongoing capital management initiative gives us further confidence that we are invested in a company that will continue to deliver both growth and income.
Additions to our portfolio included two “S Class” positions (special situations), both for reasons of earnings turnaround combined with corporate appeal: TEN Network (TEN) and Transfield Services (TSE).
The C3G Fund participated in the Think Childcare (TNK) IPO, which listed at a pleasing 14% premium to its issue price.
Having delivered a 28% share price rise in September, IT services company Rhype (RHP) took a breather and pulled back 5.9% in October. Other negative contributors to the C3G portfolio included Rubik Financial (RFL).
In summary, throughout the month we focused on capital preservation and positioning the portfolio for future growth. Our “C Class” positions, which are classified as cash and highly cash generative companies, represented 65% of the portfolio at month’s end.
The recent share market volatility has subsided, at least for the short term. From an investment perspective we remain cautious on the grounds that the majority of individual companies continue to look fully priced. The investment team continues to meet with management of numerous small and medium sized companies to evaluate the conditions within various industries and the broader economy.
For more information, please download our October newsletter Cyan C3G Monthly Oct14 or contact us at our office.
We look forward to providing further updates for our investors.
Please note our new address and phone:
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Melbourne VIC 3000
Ph: 03 9111 5631