BRM – November 2021 monthly update

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A WORD FROM THE MANAGER
In October Barramundi returned a gross performance loss of (1.5%)
and an adjusted NAV loss of (1.6%). This compares to the ASX200
Index (70% hedged into NZ$) which had a flat month and returned
(0.0%).
In the face of robust Australian inflation data, October saw the
Reserve Bank of Australia (RBA) effectively remove its policy to
keep the three year government bond yield at 0.1%. This was
officially confirmed in early November at the RBA’s meeting. This
saw volatility emerge in the Australian bond market. From 0.04%
at the start of the month the three year yield had risen to 0.78%
by month end. Longer dated bonds also rose sharply, with the ten
year government bond yield increasing to 2.09% during the month
as well.
The interest rate moves, along with volatile energy and commodity
markets contributed to a mixed month for the ASX200 Index. The
Information Technology sector (+2.1% in the month), Healthcare
(+1.0%) and Financials (+0.8%) led the market’s returns. Industrials
(-3.3%), Energy (-2.7%) and Consumer Staples (-2.3%) lagged.
Portfolio News
PWR Holdings (+7.2% in A$) had its AGM in October. There it
updated the market on further contract wins in its fast-growing
Emerging Technologies division. It also announced a contract
to manufacture cooling products for the super luxury, limited
production hypercar, the Koenigsegg Jesko. PWR is in discussions
with another five similar, limited production hypercar manufacturers
to supply cutting edge cooling products.
SEEK rose (+5.1%) in October. October data showed job ad
volumes are up +57% on the prior comparable period, and +25%
when compared to 2019. It is expected that job ad volumes will rise
further following the easing of restrictions in New South Wales and
Victoria.
CSL was up (+2.4%) for the month. Plasma collections continued
to recover in the US. CSL also held its annual Research &
Development Day in October. CSL spends 10% of its sales on
R&D each year and in 2021 it spent US$1b on researching
novel therapies. It used the R&D Day to update the market on
ongoing trials. This included the eloquently named AEGIS-II trial
which is looking to reduce the risk of recurrent cardiovascular
events following a heart attack. It also included an update on
its IMAGINE trial which is aiming to reduce the complications in
stem cell transplants. CSL also announced it is trialling its existing
immunoglobulin therapy for use in new indications. This was all
well received by the market.
oOh!Media returned +2.3% over October reflecting the
relaxation of lockdowns in NSW and Victoria in response to
increasing vaccination levels. This should mean that audiences
for most of its out of home advertising formats will be at close
to normal levels for the seasonally important December quarter.
Easing travel restrictions will also see the start of a long delayed
recovery in revenue from its Airport-related assets.
ResMed (-0.2%) reported a better than expected quarterly result
in October. Both revenue and earnings were 20% up on the same
quarter last year. There was far less benefit from COVID-related
sales this quarter. However, this was more than offset by revenue
gains from major competitor, Philips Respironics, being absent
from the market due to a major product recall. After excluding
these various “one-off” effects, underlying revenue growth was
still 14% which points to a successful launch of the new AirSense
11 CPAP platform in the US market, with other markets still to
come. We do note that supply chain constraints, particularly for
semiconductors, are curtailing ResMed’s ability to take maximum
advantage of its competitor’s current difficulties.
ANZ (-0.04%) reported a solid half year result, broadly in line with
market expectations. ANZ has ceded market share to competitors
in mortgages in the past year because it has had a slow system
for processing mortgage applications. ANZ was surprised by the
extent of the increased demand for new mortgages in the past
year. ANZ has taken steps to address its mortgage processing
challenges. ANZ’s Institutional (large business) division has been
performing well, and bad debt levels remain low.
Ansell’s share price fell 7.9% in October. The scramble for
protective equipment that characterised the peak of the COVID
pandemic has now passed. In particular, the single use exam glove
segment saw large increases in both volume and price but is now
suffering an inevitable hangover. The recent quarterly results from
Malaysian glove manufacturers, who dominate the commodity-end
of this segment, and some of whom supply Ansell, have confirmed
large drops in both price and volume. Ansell will not be immune to
this fallout. Ansell appears to have anticipated this trend in setting
a broad FY22 earnings guidance range for the market.
1
Share Price Premium to NAV (using NAV to four decimal places).
MONTHLY UPDATE
November 2021
BRM NAV
$
0.90
$
1.02
Share Price
PREMIUM
1
13.5
%

as at 31 October 2021

SECTOR SPLIT
as at 31 October 2021
KEY DETAILS
as at 31 October 2021
FUND TYPE
Listed Investment Company
INVESTS IN
Growing Australian companies
LISTING DATE
26 October 2006
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO SIZE
20-35 stocks
INVESTMENT CRITERIA
Long-term growth
PERFORMANCE OBJECTIVE
Long-term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management Limited
MANAGEMENT FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every 1%
of underperformance relative to
the change in the NZ 90 Day Bank
Bill Index with a floor of 0.75%)
PERFORMANCE FEE
HURDLE
Changes in the NZ 90 Day Bank
Bill Index + 7%
PERFORMANCE FEE
10% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$0.85
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
215m
MARKET CAPITALISATION
$219m
GEARING
None (maximum permitted 20%
of gross asset value)
4
%
INFORMATION
TECHNOLOGY
20
%
22
%

INDUSTRIALS
19
%
COMMUNICATION
SERVICES

HEALTH CARE
26
%
3
%

FINANCIALS
CONSUMER
STAPLES
6
%
CONSUMER
DISCRETIONARY
Audinate (-15.1%) announced that it expects its profit growth
in FY2022 to be lower than originally expected. Demand for its
products is high and its order backlog remains at record levels.
However, supply chain constraints related to silicon chips that are
used in Audinate’s products will impact Audinate’s ability to fulfil
all its customer orders. Audinate is working hard to mitigate the
chip shortage, including through re-designing some components
to reduce its reliance on the pertinent silicon chip. While this
impacts Audinate’s earnings growth near-term, it does not detract
from the longer-term demand for Audinate’s industry leading
networked audio technology products.
Having reached all-time highs in September, Domino’s share price
fell by 15.6% in October. With people in many countries now able
to return to dining at restaurants and cafes, the COVID-related
tailwind Domino’s had been receiving from its strength in delivery
will have lessened. That said, many of the customers it has gained
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
over the last 18 months will be likely to continue to consume its
products. Domino’s long-term prospects remain attractive. The
investor day it held in mid-October covering its European business
reinforced the potential of this region where the company expects
to add close to 1,800 stores over the next decade.
Portfolio Changes
We had no material changes to our portfolio positioning in the
month.
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The Barramundi portfolio also holds cash.

OCTOBER’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
Typically the Barramundi portfolio will be invested 90% or more in equities.
DOMINO’S
-16
%
AUDINATE GROUP
-15
%
AUB GROUP
-10
%
FINEOS
-8%
ANSELL
-8
%
5 LARGEST PORTFOLIO POSITIONS as at 31 October 2021
WISETECH
7
%
CSL LIMITED
8
%
CARSALES.COM
7
%
SEEK
5
%
CBA
5
%
The remaining portfolio is made up of another 20 stocks and cash.
Oct
2006
Oct
2007
Oct
2008
Oct
2009
Oct
2010
Oct
2011
Oct
2012
Oct
2013
Oct
2015
Oct
2016
Oct
2014
Share Price/Total Shareholder Return
Share PriceTotal Shareholder Return
$
0.00
$
0.50
$
1.00
$
1.50
$
2.00
$
2.50
$
3.00
$
3.50
Oct
2017
Oct
2018
Oct
2019
Oct
2020
Oct
2021
TOTAL SHAREHOLDER RETURN to 31 October 2021
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return(5.5%)(6.5%)+23.9%+28.1%+20.5%
Adjusted NAV Return(1.6%)+6.5%+31.3%+21.8%+16.4%
Portfolio Performance
Gross Performance Return(1.5%)+7.1%+35.1%+25.4%+19.8%
Benchmark Index^(0.0%)+0.4%+27.6%+11.8%+11.1%
PERFORMANCE to 31 October 2021
^Benchmark Index: S&P/ASX Small Ords Industrial Gross Index until 31 January 2015 & S&P/ASX 200 Index (hedged 70% to NZD)
Non–GAAP Financial Information
Barramundi uses non–GAAP measures, including adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return. The rationale for using such non–GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation decisions, after expenses, fees and tax,
»adjusted NAV return – the return to an investor after expenses, fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before expenses, fees and tax, and
»total shareholder return – the return combines the share price performance, the warrant price performance, the net value of converting any warrants into shares, and the dividends paid to shareholders. It assumes
all dividends are reinvested in the company’s dividend reinvestment plan, and that shareholders exercise their warrants, (if they were in the money), at warrant expiry date
All references to adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return in this monthly update are to such non–GAAP measures. The calculations applied to non–GAAP
measures are described in the Barramundi Non–GAAP Financial Information Policy. A copy of the policy is available at http://barramundi.co.nz/about-barramundi/barramundi-policies/
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Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by
necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Barramundi Limited and its officers and directors make no representation as to its accuracy or
completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from a financial
adviser should be taken before making an investment. To the extent that the update contains data relating to the historical performance of Barramundi Limited or its portfolio companies, please note that
fund performance can and will vary and that future results may have no correlation with results historically achieved.
Barramundi Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 489 7074 | Fax: +64 9 489 7139
Email: enquire@barramundi.co.nz | www.barramundi.co.nz
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Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz | www.computershare.com/nz
ABOUT BARRAMUNDI
Barramundi is an investment
company listed on the New Zealand
Stock Exchange. The company
gives shareholders an opportunity
to invest in a diversified portfolio
of between 20 and 35 quality
growing Australian companies
through a single, professionally
managed investment. The aim of
Barramundi is to offer investors
competitive returns through capital
growth and dividends.
CAPITAL MANAGEMENT STRATEGIES
Regular Dividends
»Quarterly distribution policy introduced in
August 2009
»Under this policy, 2% of average NAV is targeted to be
paid to shareholders quarterly
»Dividends paid by Barramundi may include dividends
received, interest income, investment gains and/or
return of capital
»Shareholders who prefer to have increased capital rather
than a regular income stream have the opportunity to
participate in the company’s dividend reinvestment plan
(DRP)
»Shares issued to DRP participants are at a 3% discount
to market price
»Barramundi became a portfolio investment entity on
1 October 2007. As a result, dividends paid to New
Zealand tax resident shareholders have not been subject
to further tax
Share Buyback Programme
»Barramundi has a buyback programme in place allowing
it (if it elects to do so) to acquire its shares on market
»Shares bought back by the company are held as treasury
stock
»Shares held as treasury stock are available to be re-
issued for the dividend reinvestment plan
MANAGEMENT
The Manager has authority delegated
to it from the Board to invest according
to the Management Agreement and
other written policies. Barramundi’s
portfolio is managed by Fisher Funds
Management Limited. Robbie Urquhart
(Senior Portfolio Manager), Terry Tolich
and Delano Gallagher (Senior Investment
Analysts) have prime responsibility for
managing the Barramundi portfolio.
Together they have significant combined
experience and are very capable of
researching and investing in the quality
Australian companies that Barramundi
targets. Fisher Funds is based in
Takapuna, Auckland.
BOARD
The Board of Barramundi
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell, Andy Coupe
and David McClatchy.
Warrants
»Warrants put Barramundi in a better position to grow
further, operate efficiently, and pursue other capital
structure initiatives as appropriate.
»A warrant is the right, not the obligation, to purchase an
ordinary share in Barramundi at a fixed price on a fixed
date.
»There are currently no Barramundi warrants on issue.