Adjustments to the Blended Australian Equity Portfolio & Australian Equity Income Portfolio
Increasing Northern Star Resources (NST)
We have added to the existing holding in Northern Star Resources after the gold price and gold miners experienced a sharp correction in November. The gold price retreated as US election concerns quickly gave way to COVID-19 vaccine optimism, prompting a rally in cyclical recovery exposures, an increase in long bond yields and a decline of 3.8mt in gold ETF holdings. The resulting 10% decline in the gold price and 15% decline in the NST share price during the month presented an opportunity to increase the Northern Star holding at a time when the market has shown an exceptional increase in risk appetite. On the company front, NST held its AGM and announced that financier consents for the proposed merger of equals with Saracen Mineral Holdings have been received and the scheme is on schedule for implementation in February 2021. We remain positively disposed to the merits of the merger and the likelihood of successful integration due to the existing co-ownership of the KCGM assets.