CIO Insights: Dividend and Donation

Hi everyone

Hopefully you will have seen the release of our half-yearly accounts on Wednesday, where we were pleased to announce our second annual dividend, and also the latest 6-monthly contribution that we make to our designated medical research organisations.
 
Last year, we paid our inaugural annual dividend of 12c/share, which was fully franked. With the significant realised gains over our first three years of operation, coming largely from the conference portfolio selections, we have built up a large profits reserve and franking credit balance, which means we were able to increase the dividend payable by 12.5%, to a fully franked 13.5c/share. Shareholders can participate in our Dividend Reinvestment Plan by making an election here.

Key Dividend Dates

NB: to be eligible you must be a shareholder at close of business the day prior to the ex-dividend date.

 

As we have reported before, we are disappointed in our investment performance over the 2021 calendar year (+6.5%), and indeed in the tumultuous first two months of 2022. This follows our first two years of significant out-performance. We will continue to work with our Fund Managers to strive to deliver attractive returns over the medium term.
 
One of the most satisfying parts of being a part of HM1 is seeing the donation amount being directed to worthy organisations conducting important medical research. The half yearly donation we will pay next month amounts to $6.7m, which is so exciting to see. We are able to make these contributions because our fund managers and many of our service providers forego their fees. This amount is on top of the $6.4m donation we made for the first six months, making the overall 2021 donation to medical research just over $13m!
 
The current designated medical research organisations are Victor Chang Cardiac Research Institute, Baker Heart and Diabetes Institute, Black Dog Institute, Charlie Teo Foundation, The Children’s Hospital at Westmead – Kids Critical Care Research, The Florey Institute of Neuroscience and Mental Health, Cerebral Palsy Alliance, Orygen, Centre of Human Psychopharmacology at Swinburne University, RPA Green Light Institute, Walter and Eliza Hall Institute of Medical Research and Pain Management Research Institute.
 
Given how central to market sentiment inflation is right now, I thought I'd share an interesting article I saw this week regarding wages growth, titled "We don't have an inflation problem". Wages growth is one of the more visible indicators of inflation (or not). The article raises the question, if labour productivity has also increased, and technology obviously plays a big part in this, then is there really that much wage inflation? Wage growth is one of the goods and services on which inflation is measured, and there is no doubt that the supply chain disruptions and labour shortages due to the pandemic have (temporarily?) raised prices for many of the things we all regularly consume. Do you think technology can keep a reign on inflation, as it has for the last two decades when we come out the other side? Maybe it’s not as bad as the media makes it out to be?
 
Global markets remain in complete turmoil right now, with Russia seemingly certain to continue its invasion of Ukraine, further broad sanctions being announced and retaliatory action imminent. How long this will last is anyone’s guess, and with uncertainty being the only certainty right now, it means we can expect more larger than normal moves in indices and individual stocks. On top of macroeconomic/geopolitical driven market moves, the US reporting season has just finished, while the local season is almost complete. Investors have fresh insights into the financial health of individual companies, and companies that reported earnings disappointments have seen their share prices pummelled.
 
Meanwhile, let’s pray for the innocent men, women and children caught in the middle of the geopolitical situation the world finds itself in right now.

 

Stay safe

Rory Lucas
Chief Investment Officer
Hearts and Minds Investments Limited

Reminder: these are simply my general views and should not be taken as investment advice

 

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DISCLAIMER: this communication has been prepared by Hearts and Minds Investments Limited (ABN 61 628 753 220) and may contain general information relating to HM1 securities. The general information should not be considered financial advice. HM1 is not licensed to provide financial product advice. The information does not consider the investment objectives, financial situation, or particular needs of any individual. The information is current as at the date of preparation and is subject to change. HM1 does not guarantee repayment of capital or any rate of return on HM1 securities. An investment may achieve a lower-than-expected return and investors risk losing some, or all, of their principal investment.  Past performance is not a reliable indicator of future performance. This document may not be reproduced or copies circulated without prior authority from Hearts and Minds Investments Limited.