The Australian Equity Fund is heading for gains last month with the market down as it is betting on a manufacturer of products used to treat coronavirus patients in addition to mining and gold services.
CC Sage Capital Absolute Return Abs rose by 6.2% in March, much outperforming the S & P / ASX 200 index by 21%.
Sean Fenton, chief investment officer of Sage Capital Pty Ltd, said the long-term fund has succeeded in reducing its exposure to travel stocks and strengthening positions in health companies, supermarkets and telecommunications.
The fund has risen 7.5% since its creation in August, according to the latest performance report. Its largest property includes Service Stream Ltd. , National Australia Bank Ltd. And Coles Group Ltd.
The market stability witnessed this month on the actions of the central bank and the government prompted Fenton to adjust some positions, reducing the overall exposure of the shares with the return of volatility.
"This was an opportunity for us to take profits and search for the companies that were hit a little bit," Fenton said.
One of the Fund's current purchase deals is Fisher & Paykel Healthcare Corp, a medical equipment manufacturer for respiratory disease, and New Zealand-based company shares have surged amid widespread demand for products used to care for viral patients.
Fenton also sees growth potential in the long term as hospitals focus more on preparing for the epidemic.
Elsewhere in the health sector, the private hospital company Ramsey Health Care Ltd. is listed short on the fund given recent restrictions on elective surgery due to planning to respond to the Coronavirus.
Fenton said that gold is likely to flourish as governments try to mitigate the negative economic impact of the outbreak. The fund is also long-term mining service companies and producers of short bulk commodities.
He added that companies like Seven Group Holdings Ltd. And NRW Holdings Ltd. Less prone to deflation in commodity prices, and benefit when prices rise.
Within the financial sector, the fund is considered an excess insurance company due to its defensive nature, and Fenton said that its position is weak in the banks due to the risks around bad debts and net interest margin pressures from interest rate cuts.