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Apostle Loomis Sayles Senior Loan Fund201041164445
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Apostle Loomis Sayles Senior Loan Fund
LOOK BEYOND THE HORIZON
Monthly Fact Sheet, 31 October 2009
Investment Style Performance (% pa)
Performance Inception>
DEBT – SENIOR BANK LOANS 1 mth 3 mths CYTD 1 yr
Returns (20/11/07)
Fund (gross) 0.44 3.26 36.30 22.82 0.20
Investment Objective
Benchmark* 0.29 0.86 3.37 4.64 6.18
The Fund’s investment objective is to seek to provide a high
level of current income and such preservation of capital as is Active Return 0.15 2.40 32.93 18.18 -5.98
consistent with investment in a portfolio of senior bank * USD LIBOR 3 Month in AUD.
>Annualised.
loans.
Primary Investments Portfolio Analysis
The Fund seeks to accomplish its investment objective
through investment primarily in a diversified managed Portfolio Characteristics
portfolio of predominantly U.S. Senior Loans.
Fund
Portfolio construction is driven by bottom-up security
selection and top-down macroeconomic analysis. Individual Margin over Libor (%) (USD) 2.62
investment ideas are evaluated by the Fund’s portfolio Coupon Rate (%) (USD) 3.40
management team and credit research analysts based on Current Yield (%) (USD) 3.59
investment return potential and contribution to overall
Weighted Average Purchase Price (c/$) 92.95
portfolio risk.
Weighted Average Market Price (c/$) 93.83
Fund Investment Strategy and Allocation Limits = Average Coupon Rate/Weighted Avg Market Price
90-100% of total assets in Senior Loans.
0-10% of total assets in cash or cash equivalents. Allocation Analysis
0-10% of total assets in other authorised investments.
Credit Quality (%)
Characteristics
Fund
Average Quality BB-
Unit Price 0.905593 BBB 4.06
BB 55.05
Fund Size (AUD) 412,452,272 B 33.28
CCC & Lower 2.81
Reporting Benchmark 3 Month USD LIBOR hedged into AUD
Not Rated 2.62
Fund Inception Date 20 November 2007 Cash & Equivalents 2.18
Total 100
Legal Structure Australian Managed Investment Scheme
Valuation Frequency Daily Sector Allocation (%)
Liquidity Frequency Fortnightly Fund
Industrial 87.71
Responsible Entity Apostle Asset Management Limited Financial 5.36
Utility 4.75
Investment Manager Loomis, Sayles & Company, L.P.
Cash & Equiv 2.18
Total Management Fee By Negotiation Total 100
Portfolio Manager Kevin Perry, John Bell
Country Allocation (%)
Administrator State Street Australia Limited
Fund
Custodian State Street Australia Limited United States 99.63
Canada 0.37
Total 100
Contact
Apostle Asset Management Limited
Level 11, 23-25 O’Connell Street
SYDNEY NSW 2000
Australia
T +61 2 8224 2900
F +61 2 8224 2910
www.apostleam.com.au
Monthly performance (gross % pa)
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2009 8.30 2.09 1.23 7.21 3.63 3.28 2.77 1.34 1.45 0.44 -- -- --
2008 -2.27 -2.20 1.01 3.25 1.38 0.73 0.08 0.39 -3.74 -17.03 -6.57 -3.55 -26.39
2007 -- -- -- -- -- -- -- -- -- -- -- 0.36 --
Apostle Loomis Sayles Senior Loan Fund
LOOK BEYOND THE HORIZON
Monthly Fact Sheet, 31 October 2009
Holdings by Industry (%) Market Performance
While greater risk was rewarded with greater return in loans again in
Aerospace/Defence 0.87 October, we noted two developments that suggested the risk rally may be
Automotive 0.74 running out of steam. First, the new issue loan market started to open up
Banking 1.47 as near-par secondary prices created the right arithmetic for comparable
Building Materials 1.60 value. Second and not unrelated, BB-rated loans actually went down
Cash & Equivalents 2.18
slightly in price, most likely reflecting both “fast money” exiting the
Chemicals 4.00
recovery trade and relative value decisions by accounts wanting to buy new
Consumer Cyclical Services 6.17
issues with BB ratings and higher coupons. We face a choice each day in
Consumer Products 2.70
Diversified Manufacturing 0.68 this environment: chase yield or hold quality. If we were convinced that
Electric 4.75 the economic prospects are strong we might be inclined to lower quality in
Energy 0.60 our search for extra basis points of return. Instead, we think the market
Entertainment 3.07 will grow weary of the interaction of uninspiring revenue growth and highly
Environmental 1.49 levered balance sheets. We prefer to accept modest return prospects with
Food and Beverage 3.72 far less balance sheet risk given our outlook.
Gaming 0.65
Health Insurance 0.19 Outlook
Healthcare 10.62
Industrials – Other 8.62 It has become increasingly apparent that there is a disparity between the
Insurance 0.56 way money is flowing in the real economy and the way it is flowing in the
Media – Cable 4.01 investment markets. In the real economy, unemployment is rising
Media – NonCable 5.29 (reducing consumer expenditures) and banks are not lending at a torrid
Metals & Mining 0.28 pace to real businesses. Home prices will not likely find a floor until mid-
Oil Field Services 2.97 2010 and commercial real estate seems to be in decline. Meanwhile,
P&C 2.62 investment cash returns are essentially zero and has been flowing in high
Packaging 2.65 volume towards anything easily buyable: stocks, bonds, and commodities.
Paper 1.05 This disparity is unsustainable, in our opinion. We worry that it will take so
Pharmaceuticals 1.93 much time for the real economy to show real strength that a significant
Pipelines 2.32
number of overlevered credits will default. Our skepticism continues to
Railroads 0.18
drive our portfolio construction.
REITS 0.71
Restaurants 0.63
Retailers 5.04
Supermarkets 0.75
Technology 5.38
Telecommunications 0.79
Textile 1.39
Wireless 3.34
Wirelines 4.02
TOTAL 100
Top Five Portfolio Holdings (%)
Holding
Amt S&P
Spread
Portfolio Rating
(%)
HCA, Inc. Term Loan B +225 1.25 BB
Community Health +225 1.19 BB
Systems, Inc. Term
Loan
CSC Holdings, Inc. +175 1.18 BBB-
Incremental B Term
Loan
DaVita, Inc. Tranche B- +150 0.97 BB+
1 Term Loan
Energy Transfer Equity, +175 0.97 BB-
L.P. Term Loan B
Apostle Asset Management Limited ABN 60 088 786 289 AFSL No. 246830 (“Apostle”) APIR Code IAM0006AU
This document is issued by Apostle and relates to the Apostle Loomis Sayles Senior Loan Fund (“Fund”) of which Apostle is the responsible entity. The Investment Manager for the Fund is Loomis, Sayles & Company,
L.P.. Loomis, Sayles & Company, L.P. is licensed to provide investment management services in the US and conducts any portfolio management activities in and from US. Loomis, Sayles & Company, L.P. is exempt
from the requirement to hold an AFSL under the Corporations Act 2001 (Cth) in respect of financial services. Loomis, Sayles & Company, L.P. is regulated by the SEC under US laws which differ from Australian laws.
This material is for information purposes only. It is not an offer or a recommendation to purchase or sell any security and is not intended to substitute for the Fund’s Information Memorandum which will outline the
risks involved and other relevant information. Please note that past investment performance is not a reliable indicator of future investment performance. This information may not have been prepared taking into
account your objectives, financial situation or needs.
This document may contain information provided directly by third parties. To the maximum extent permitted by law, Apostle excludes liability for material provided by third parties. This document is strictly
confidential and is intended solely for the use of the person to whom it has been delivered. It may not be reproduced, distributed or published, in whole or in part, without the prior approval of Apostle.
