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Writing in its October monthly update, the Firetrail Australian Small Companies Fund names the NobleOak Life Ltd (ASX: NOL) share price as one of the negative contributors for the month.
Although the fund has struggled over the past 12 months, since inception in February 2020, it has returned 11.5% per annum, soundly outperforming its benchmark.
October saw the Firetrail Australian Small Companies Fund gain 4.7% after fees, underperforming the Small Ordinaries Accumulation Index by 1.7%.
Positive contributors included the Life360 Inc (ASX: 360) share price soaring 40% in October after the family communications application announced increased prices for new and existing US subscribers. The fund notes Life360 has 27 million monthly active users in the US, approximately 8% of the total US population.
Turning to detractors, the NobleOak Life share price fell 12% in October on very thin trading volumes. Since the end of the month, this ASX small-cap share has continued to struggle, now trading at close to a 52-week low.
The fund notes the life insurance sector has performed poorly in 2022 despite its defensive earnings and industry tailwinds from policy repricing and rising interest rates.
Not deterred, Firetrail estimates NobleOak will see an approximate 7-10% profit tailwind from rising interest rates in FY23.
Whatever the reason – the war in Ukraine, the pandemic or recession fears – the fund is encouraged by consumer willingness to buy life insurance increasing by "an amazing" 35% in the past two years.
When reporting FY22 results in late August, NobleOak said it delivered another year of strong growth in in-force premiums and underlying profits, exceeding its key prospectus forecasts.
For FY23, the ASX small-cap share says "in-force premiums are expected to grow ahead of market with a disciplined approach to drive continued profit growth".
NobleOak was a July 2021 IPO, with shares issued at $1.95 per share. Its share price hit a high of $2.45 in March 2022 before retreating back to $1.57 today.
