HYPERION GLOBAL GROWTH

COMPANIES FUND (CLASS B)

OBJECTIVE: LONG-TERM CAPITAL GROWTH AND
INCOME BY INVESTING IN HIGH QUALITY GLOBAL
COMPANIES.
AUGUST 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 declined during August as trade $28,000
$27,000 $26,801
negotiations between the U.S. and China dominated $26,000
$25,000
headlines. In the U.S., the S&P 500 Index returned - $24,000
$23,000
1.6% after economic data revealed an unchanged $22,000
$21,000
unemployment rate, improving consumer confidence $20,000 $19,622
$19,000
but a weaker manufacturing industry during July, $18,000
$17,000
highlighting stark differences in activity across its $16,000
$15,000
economy. In Europe, the Euro STOXX 50, German DAX $14,000
$13,000
and FTSE 100 Indexes returned -1.1%, -2.0% and - $12,000
$11,000
$10,000
4.1%, respectively. During the month, economic data $9,000
Nov 14
Feb 15

Nov 15
Feb 16

Nov 16
Feb 17

Nov 17
Feb 18

Nov 18
Feb 19
May 14

May 15

May 16

May 17

May 18

May 19
Aug 14

Aug 15

Aug 16

Aug 17

Aug 18

Aug 19
showed that both the German and U.K. economies
contracted -0.1% and -0.2% during the second
quarter, respectively. In Australia, the S&P/ASX 300 Hyperion Global Growth Companies Fund (Class B)
Index returned -2.3%, as CPI rose +0.6% during the MSCI World Index Gross (AUD)
quarter and +1.6% for the year, whilst the
unemployment rate sits at 5.2%. Health Care (+3.4%), Source: Hyperion Asset Management

REITs (+1.3%) and Information Technology (+0.7%) Excess

Portfolio – Benchmark^
were the best performing sectors. Materials (-7.3%), Net (%) (%) Performance
(%)
Energy (-5.6%) and Communication Services (-3.2%)
were the worst performers. Bulk commodity prices 1 Month 0.7 0.3 0.4
fell during August, with Iron Ore, Thermal and Coking 3 Month 6.2 8.0 -1.8
Coal, and Brent Oil prices falling, whilst Gold rose. The 1 Year 12.3 8.2 4.1
U.S. dollar rose against most G10 currencies during 3 Year (p.a.) 22.8 14.3 8.5
the month, the exceptions being the Swiss Franc and 5 Year (p.a.) 21.9 14.0 7.9
Japanese Yen. Inception (p.a)** 20.6 13.7 6.9

*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 August 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
Ferrari NV (RACE-IT)

Primary Exchange Borsa Italiana

GICS Sector Consumer Discretionary
Market Cap (EUR€m) 27,841

Ferrari NV (RACE-IT) released a market update for the second quarter ended 30 June 2019, reporting group net
revenue growth of 9% to €984m, adjusted EBITDA increased 9% to €314m and EPS was up 14% to €0.96 per share.
At the segment level, net revenue in Cars and Spare Parts increased 14% to €766m, Sponsorship, commercial and
brand revenue increased 4% to €131m, Other revenue increased 16% to €34m, whilst Engines declined 35% to
€53m due to a decrease in the sale of engines to Maserati. Shipments for the RACE-IT group totaled 2,671 units,
up 208 units or +8% on Q2FY18. Most regions contributed positively to shipments, with EMEA up 11% to 1,195
units, China, Hong Kong and Taiwan up 63% to 289 units, Rest of APAC up 6% to 384 units, whilst Americas
declined 5% to 803 units. Management confirmed their guidance at the top of the range and increased free cash
flow guidance to €550 million.

Intuit Inc. (INTU-US)

Primary Exchange NASDAQ

GICS Sector Information Technology
Market Cap (USD$m) 74,995

Intuit Inc (INTU-US) released its annual results for the financial year ended 31 July 2019, reporting group revenue
growth of 13% to $6.8b, gross operating margin expansion of 144bps to 27.3% and EPS growth of 16% to $5.89
per share. Divisionally, the company’s Small Business & Self-Employed division achieved revenue growth of 15% to
$3.5b, operating income margin expansion of 52bps to 43.8% and operating income growth of 17% to $1.5b.
Consumer revenue increased 11% to $2.8b and operating income was up 10% to $1.7b, whilst Strategic Partner
achieved revenue growth of 4% to $476m, operating income margin expansion of 453bps to 66.8% and operating
income growth of 12% to $318m. The company’s online ecosystem revenue increased 38% to $1.6b, whilst
desktop ecosystem revenue was up 1% to $1.9b. Furthermore, Small Business & Self-Employed business metrics
continued to be strong, with QuickBooks Online subscriptions increasing 33% to 4.5m subscribers, and the total
number of customers increasing 26% to 5.7m during the year. Management expects revenue growth of 10% to
11% and EPS growth of 8% to 10% for FY20.

Wayfair Inc. (W-US)

Primary Exchange NYSE

GICS Sector Consumer Discretionary
Market Cap (USD$m) 10,410

Wayfair Inc (W-US) released a market update for the second quarter ended 30 June 2019, reporting Direct Retail
net revenue growth of 42% to $2.3b. Geographically, the company continues to see growth across both the U.S.
and Internationally, with Direct Retail revenue up 42% to $2.0b and up 41% to $343m, respectively. Engagement
levels continue to improve, with the number of active LTM customers in the company’s direct retail business
increasing 39% to 17.8m, and net revenue per active customer increasing 2% to $447. During the second quarter
of 2019, 68% of total orders were from repeat customers with orders from these customers increasing by 46% to
6.2m, each placing 1.86 orders at an average order value of $255. Furthermore, 54% of total orders delivered
across its Direct Retail business were placed via a mobile device, compared to 49% in the second quarter of 2018.

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
Amazon.com, Inc. 9.3 1.8 $0 - $50bn 21.5 9
Alphabet Inc. Class A 9.0 0.9 $50 - $100bn 1.6 1
Facebook, Inc. Class A 7.2 1.1 $100bn + 62.4 12
PayPal Holdings Inc 6.3 0.3 Cash 14.5 --
Mastercard Incorporated Total 100 22
5.3 0.6
Class A
Geographical Weight by Source of Revenue Sector Allocation
Portfolio (%) Benchmark (%)
Rest of the
World 0.2% Communication Services 22.1 8.6
Consumer Discretionary 22.6 10.5
Consumer Staples 3.1 8.9
Asia Pacific
Americas 59.4% Financials 1.4 15.2
20.2%
Health Care 4.4 12.7
Information Technology 31.9 16.6
Europe Cash 14.5 --
20.1%

Source: Hyperion Asset Management

Portfolio Characteristics ^ Top 5 Contributors (rolling 12 months) ^
Portfolio Avg Price Contribution
Contributors Weight change to return
Price to Earnings* 31 (%) (%) (%)
Dividend Yield (%)* 1.0 PayPal Holdings Inc. 7.1 26.8 2.2
5-Year IRR (% p.a.) 1 18.5 Mastercard Incorporated
5.7 40.1 2.1
1 Before
Class A
^ Data relates to the Composite * Trailing fees
Microsoft Corporation 5.6 31.7 1.8
Fund Characteristics
MarketAxess Holdings Inc. 2.0 124.8 1.8
Domicile Australia, authorised by ASIC
Visa Inc. Class A 5.1 32.1 1.5
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* 0.9 -18.5 -0.6
management fee. Workday, Inc. Class A 0.7 -15.3 -0.5
Composite size $208.2 million Domino’s Pizza, Inc. 2.5 -13.0 -0.4
Fund size $192.4 million Moncler SpA 2.3 -11.1 -0.3
APIR Code WHT8435AU Amazon.com, Inc. 8.2 -5.3 -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 August 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