November portfolio update

The G&W portfolio rose 6.62% in November, while the benchmark declined 2.21%.

	August 3, 2017	November 30, 2018	Since July 1, 2018	Since Inception	Annualised
G&W Portfolio*	1.0000	1.1920	12.01%	19.20%	14.16%
Benchmark (SPAX2F0)	61,250.80	65,294.78	-5.44%	6.60%	4.94%

*I do not account for cash in the portfolio. The net result so far is that my returns are somewhat overstated.

The portfolio had another excellent month on both an absolute and relative basis. In each of the last two months, the portfolio has outperformed the benchmark by more than 8%. This is highly improbable and unlikely to be repeated.

There were two key drivers for the good result this month. Mitula (MUA), the largest holding in the portfolio with a weight of 30 per cent, started the month at 0.68 and ended at 0.775 —a gain of 13.97%. During the month, Lifull, the Japanese company which is seeking to acquire Mitula, rose 15% on the Tokyo exchange. Additionally, the scheme was amended to provide additional downside protection for shareholders receiving Lifull scrip. As of the end of the month,  the implied scrip consideration is 0.85, about 6 per cent above the 0.80 cash consideration I'm entitled to should the deal close. The final scrip price will be based on the 10-day VWAP as of December 7. I have until December 13 to lodge my election. At current prices, I am still inclined to take the certainty of the cash offer. I will continue to monitor the situation carefully. 

The other major contributor was the 10.5% gross dividend paid out by the portfolio's second-largest holding, which is undisclosed. This company is unlisted, and its shares trade via appointment, usually only a few times a year. The shares have not traded since the dividend was paid, so there was no ex-dividend effect. 

In other developments, OneMarket (OMN) released its financials for the nine months to September, and announced that CEO Don Kingsborough was stepping down for health reasons. The share price remained flat, and I added to my position during the month. One of the smaller positions in the portfolio, Capral, also issued a downgrade. The shares were initially sold down significantly but recovered somewhat by month's end. Capral had current assets less total liabilities of $83.47 million at June 30 (if we include the expense for the most recent special dividend). It last traded at 0.13, which puts it on a market cap of $62.44 million. It is still continuing to generate profits, and I am happy to stay on the register at current prices.