HYPERION GLOBAL GROWTH

COMPANIES FUND (CLASS B)

OBJECTIVE: LONG-TERM CAPITAL GROWTH AND
INCOME BY INVESTING IN HIGH QUALITY GLOBAL
COMPANIES.
JULY 2019
High-conviction portfolio of quality global listed
equities from a research driven, bottom-up
investment philosophy.
Our Philosophy
High quality, structural growth businesses produce
attractive shareholder returns over the long-term.
Long-term capital preservation is paramount.

We believe companies in our portfolio have:

• Predictable earnings • High return on capital
• Low debt • Strong free cash flow
• High interest cover • Organic growth options
• Sustainable competitive • Experienced and proven
advantages management teams

GLOBAL MARKET OVERVIEW Net Performance - Growth of AUD $10,000*

Global equity markets posted muted returns in July $28,000
$27,000
$26,612
following the strong performance of June. In the U.S., $26,000
$25,000
the S&P 500 Index returned +1.4% after the Federal $24,000

Open Market Committee agreed to lower the Federal $23,000

$22,000
Funds Rate target range for the first time since the $21,000
$19,572
$20,000
GFC, by 25 basis points to 2.00% - 2.25%. In Europe, $19,000

the Euro STOXX 50, German DAX and FTSE 100 $18,000
$17,000

Indexes performances were mixed, with the Euro $16,000

$15,000
STOXX 50 and German DAX returning -0.1% and -1.7% $14,000

respectively, while the FTSE 100 returned +2.2%. $13,000

$12,000

During the month, Boris Johnson was elected $11,000

$10,000
Conservative Party Leader and Prime Minister of the $9,000
Jul-14

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19
Jan-15

Jan-16

Jan-17

Jan-18

Jan-19
Oct-14

Oct-15

Oct-16

Oct-17

Oct-18
Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

UK, while the ECB referred to the possibility of future

rate cuts if the medium term outlook for inflation Hyperion Global Growth Companies Fund (Class B)
does not improve. In Australia, the S&P/ASX 300 MSCI World Index Gross (AUD)
Source: Hyperion Asset Management
Index returned +3.0%, as the RBA cut the cash rate by
25 basis points to a record low of 1.00%. Consumer Portfolio – Benchmark^ Excess
Performance
Staples (+9.6%), Health Care (+6.0%) and Information Net (%) (%) (%)
Technology (+5.1%) were the best performing sectors.
1 Month 2.2 2.3 -0.1
Materials (+1.2%), Energy (+1.5%) and Financials
(1.8%) were the worst performers. Bulk commodity 3 Month 2.8 3.2 -0.5
prices were mixed during the month, with iron ore, 1 Year 20.0 12.4 7.6
thermal coal and gold rising, while hard coking coal 3 Years (p.a.) 22.3 14.7 7.6
and brent oil fell. The U.S. Dollar rose against all G10
5 Years (p.a.) 22.0 14.3 7.7
currencies during the month.
Inception (p.a)** 20.8 13.9 7.0
*Investment of $10k since inception. **Inception date: 1st
June 2014. ^ MSCI World Index Gross (AUD).
Returns are net of applicable fees, costs and taxes.
Past performance is not a reliable indicator of future performance.
Data as at 31st July 2019.

Hyperion named AUSTRALIAN FUND MANAGER OF THE YEAR

in the Morningstar 2016 Awards, Australia.
HYPERION ASSET MANAGEMENT FUND UPDATE | FOR FINANCIAL ADVISORS ONLY
PORTFOLIO HOLDINGS UPDATE
Salesforce.com, Inc. (CRM-US)

Primary Exchange New York Stock Exchange

GICS Sector Information Technology
Market Cap (USD$m) 120,337

Salesforce.com, Inc. (CRM-US) released its results for the first quarter ended 30 April 2019, reporting revenue
growth of 24% to $3.7b, gross profit margin expansion of 106bps to 75.5% and net profit growth of 14% to
$392m. Revenue growth was driven by a 11% increase in Sales Cloud (29% of revenue) to $1.1b, +20% in Service
Cloud (27% of revenue) to $1.0b, +46% in Salesforce Platform and Other (23% of revenue) to $842m, +33% in
Marketing and Commerce Cloud (15% of revenue) to $561m, and a 23% increase in Professional Services and
Other revenue (6% of revenue) to $241m. Geographically, Americas revenue increased 25% to $2.6b, Europe
+25% to $755m and Asia Pacific +22% to $365m. Management took the opportunity to reaffirm revenue guidance
and increased diluted EPS guidance to $0.78 to $0.80 per share.

Alphabet Inc. (GOOGL-US)

Primary Exchange Nasdaq Stock Market

GICS Sector Communication Services
Market Cap (USD$m) 844,135

Alphabet Inc. (GOOGL-US) released its second quarter 2019 result, reporting revenue growth of 19% to $38.9b,
gross operating margin expansion of 1425bps to 23.6% and EPS growth of 213% to $14.21 per share. Regionally,
U.S. revenue (46% of revenue) was up 20% to $17.9b, EMEA (32% of revenue) +15% to $12.4b, APAC (17% of
revenue) +29% to $6.5b, and Other Americas (5% of revenue) +15% to $2.1b. At the segment level, Google
advertising revenue grew 16% to $32.6b driven by ongoing strength in mobile search, while Other Revenue was
up 40% to $6.2b driven by Google Cloud, Google Play, Hardware and YouTube subscriptions. Other Bets revenue
increased 12% to $162m which was primarily generated by Fiber, an internet and television service provider and
Verily, GOOGL-US’s research organisation dedicated to the study of life sciences. Management highlighted that
YouTube Music and YouTube Premium is now available in over 60 countries, up from 5 markets at the start of
2018.

Rightmove Plc (RMV-GB)

Primary Exchange London Stock Exchange

GICS Sector Communication Services
Market Cap (USD$m) 4,698

Rightmove Plc (RMV-GB) released its first half 2019 results, reporting group revenue growth of 10% to £144m,
operating income margin expansion of 26bps to 75.2% and EPS growth of 13% to 9.81 pence per share. At the
segment level, Agency revenue (73% of revenue) increased 5% to £105m, New Home (19% of revenue) was up
29% to £28m and Other revenue (8% of revenue) increased 11% to £11m. Operationally, RMV-GB continues to
perform well with its platform receiving nearly 141 million visits per month driven by growth in mobile traffic with
users spending over 1.1 billion minutes per month on its platform. Monetisation across its platform has also
improved with the Average Revenue Per Advertiser (ARPA) up 9% to £1,077 per month. Agency ARPA up 9% to
£1,077 per month driven by customers increasing their adoption of higher value depth products, whilst New
Home ARPA was up 5% to £1,346 per development per month driven by membership price increases and
customers spending more on packages that generate more optimal marketing exposure. RMV-GB expects that its
subscription advertising model, together with the strength of its value proposition for both customers and
consumers to support the Board’s continued confidence in delivering its expectations for the full year.

Commentary sourced from Hyperion Asset Management HYPERION ASSET MANAGEMENT FUND UPDATE | FOR FINANCIAL ADVISORS ONLY
Top 5 Holdings Market Capitalisation (AUD)
Portfolio (%) Benchmark (%) Portfolio (%) # Stocks
Alphabet Inc. Class A 10.3 0.9 $0 - $50bn 20.9 9
Amazon.cm, Inc. 8.7 1.9 $50 - $100bn 1.8 1
Facebook, Inc. Class A 7.1 1.1 $100bn + 61.7 11
PayPal Holdings Inc 6.2 0.3 Cash 15.6 --
Mastercard Incorporated Total 100 21
5.4 0.6
Class A
Geographical Weight by Source of Revenue Sector Allocation

Rest of the World Portfolio (%) Benchmark (%)

0.2%
Communication Services 22.9 8.5
Consumer Discretionary 20.4 10.5
Americas
Consumer Staples 3.1 8.6
Asia Pacific 60.3%
19.3% Financials 0.9 15.8
Health Care 4.1 12.4
Information Technology 33.0 16.6
Cash 15.6 --
Europe 20.2%

Source: Hyperion Asset Management

Portfolio Characteristics ^ Top 5 Contributors (rolling 12 months) ^
Portfolio Avg Price Contribution
Contributors Weight change to return
Price to Earnings* 27 (%) (%) (%)
Dividend Yield (%)* 1.0 PayPal Holdings 7.2 45.0 3.3
5-Year IRR (% p.a.) 1 15.9 Mastercard Incorporated
5.8 48.3 2.6
1 Before
Class A
^ Data relates to the Composite * Trailing fees
Microsoft Corporation 5.6 38.6 2.1
Fund Characteristics
Visa Inc. Class A 5.1 40.4 1.9
Domicile Australia, authorised by ASIC
Intuit Inc. 4.7 46.4 1.9
Fees Management fee of 0.70% p.a. of the gross
asset value of the Fund, plus a performance Detractors
fee of 20% of the Fund’s excess return
versus the MSCI World Index (AUD), net of Seek* 1.2 -14.6 -0.5
management fee. Workday, Inc. Class A 0.4 -6.6 -0.2
Composite size $190.0 million Moncler SpA 2.3 1.1 -0.0
Fund size $174.2 million Salesforce.com, Inc 0.3 3.8 0.1
APIR Code WHT8435AU Rightmove plc 2.7 9.2 0.1
The Fund’s PDS contains more complete information on risks and fees
^ Data relates to the Composite * Stock not currently held

CONTACT HYPERION ASSET MANAGEMENT Tel: 1300 497 374 or Email: clientservices@hyperion.com.au
DISCLAIMER – HYPERION GLOBAL GROWTH COMPANIES FUND (CLASS B UNITS)
Interests in the Hyperion Global Growth Companies Fund (ARSN 611 084 229) (‘Fund’) are issued by Pinnacle Fund Services Limited (ABN 29 082 494 362 AFSL 238 371).
Pinnacle Fund Services Limited is not licensed to provide financial product advice. Hyperion Asset Management Limited (ABN 80 080 135 897 AFSL 238 380) (‘Hyperion’)
is the investment manager of the Fund. A copy of the most recent Product Disclosure Statement (‘PDS’) of the Fund can be located at www.hyperion.com.au , or by
contacting Hyperion at 1300 497 374 or via email to investorservices@hyperion.com.au. You should consider the current PDS in its entirety and consult your financial
adviser before making an investment decision. Pinnacle Fund Services Limited and Hyperion believe the information contained in this communication is reliable,
however its accuracy, reliability or completeness is not guaranteed. To the extent permitted by law, Hyperion and Pinnacle Fund Services Limited disclaim all liability to
any person relying on the information in respect of any loss or damage (including consequential loss or damage) however caused, which may be suffered or arise directly
or indirectly in respect of such information contained in this communication. Any opinions or forecasts reflect the judgment and assumptions of Hyperion and its
representatives on the basis of information at the date of publication and may later change without notice. The information is not intended as a securities
recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. This communication is for general
information only. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should
obtain professional advice relevant to their particular circumstances, needs and investment objectives. Past performance is not a reliable indicator of future
performance. Unless otherwise specified, all amounts are in AUD. All data is as at 31st July 2019 unless otherwise stated. Morningstar Awards 2016 (c). Morningstar, Inc.
All Rights Reserved. Awarded to Hyperion Asset Management for Fund Manager of the Year, Domestic Equities – Large Caps Category Winner and Domestic Equities –
Small Caps Category Winner, Australia.
HYPERION ASSET MANAGEMENT FUND UPDATE | FOR FINANCIAL ADVISORS ONLY