NEWS
Performance Report: The Airlie Australian Share Fund
3 Dec 2020 - Australian Fund Monitors
The Airlie Australian Share Fund rose +1.15% in October, taking annualised performance since inception in June 2018 to +4.96% with an annualised volatility of 17.41%. By contrast, the ASX200 Accumulation Index has returned +3.21% p.a. with...
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3 Dec 2020 - Performance Report: The Airlie Australian Share Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is long-only with a bottom-up focus. It has a concentrated portfolio of 15-35 stocks (target 25). Maximum cash holding of 10% with an aim to be fully invested. Airlie employs a prudent investment approach that identifies companies based on their financial strength, attractive durable business characteristics and the quality of their management teams. Airlie invests in these companies when their view of their fair value exceeds the prevailing market price. It is jointly managed by Matt Williams and Emma Fisher. Matt has over 25 years' investment experience and formerly held the role of Head of Equities and Portfolio Manager at Perpetual Investments. Emma has over 8 years' investment experience and has previously worked as an investment analyst within the Australian equities team at Fidelity International and, prior to that, at Nomura Securities. |
| Manager Comments | At month-end, the portfolio's top positions included Aurizon Holdings, BHP Group, Coles Group, CBA, CSL, Macquarie Group, Mineral Resources, Pacific Current Group, Wesfarmers and Westpac Banking Corporation. The top sectors in the portfolio were Financials (27% of the portfolio), Consumer Discretionary (15%), and Health Care (10%) and Industrials (10%). |
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Performance Report: Laureola Investment Fund
3 Dec 2020 - Australian Fund Monitors
The Laureola Investment Fund rose +0.34% in October, taking 12-month performance to +10.14% with a volatility of 1.95% vs the S&P500 Total Return's +9.71% with a volatility of 22.95%. Since inception in May 2013, the Fund has returned...
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3 Dec 2020 - Performance Report: Laureola Investment Fund
By: Australian Fund Monitors
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| Fund Overview | The investment strategy of The Laureola Investment Fund is dynamic and flexible, designed to take advantage of the frequent but temporary pricing anomalies of an asset class that is not yet fully understood by the majority of participants. Laureola Advisors applies 'best practices' common in the management of traditional assets, particularly the use of independent, in-house, proprietary research. |
| Manager Comments | Recent maturities have left the Fund with cash to invest. The manager purchased 12 new policies at a total discount of 10% to the fair market value in October. At month-end the Fund held over 180 policies, mostly small face and all on insureds with pre-existing conditions. The majority of the policies were purchased through new sourcing channels as Laureola continues to grow both the quantity and quality of sourcing channels to prepare for the future. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
3 Dec 2020 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund has returned +6.59% over the past 12 months with an annualised volatility of 7.44%. Since inception in December 2010, the Fund has returned +4.70% p.a. with an annualised volatility of 4.28%.
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3 Dec 2020 - Performance Report: Gyrostat Absolute Return Income Equity Fund
By: Australian Fund Monitors
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| Fund Overview | The investment objective is to deliver regular and stable income stream (from ASX20 dividends) in a low interest rate environment with capital security - a 'highly-defensive' asset class. Gyrostat has operated for 38 consecutive quarters within a 'hard' pre-defined risk parameter (no more than 3% capital at risk with the Fund's maximum draw-down 2.2% in any circumstances) always in place, delivering regular income by passing through ASX-20 dividends, and meeting returns guidance based upon market conditions (demonstrating increasing returns with market volatility). The Fund buys and holds ASX-20 and international assets with lowest cost protection always in place with upside. It is a conservative asset allocation. Note that Gyrostat have expanded their international assets within the Fund to include SP500, FANGS, Nikkei, Hang Seng, MSCI China, MSCI Developed and Developing markets. Advances in investment risk management enable cost-effective protection to always be in place for a 'hard' defined risk parameter (say no more than 3% capital at risk). Returns are designed to increase as volatility levels increase, as this provides more opportunities to lower protection costs. Investment Objectives: - Returns: 6% - 8% pa in trending markets, greater than 8% pa in volatile markets, BBSW90 + 3% in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.0% p.a.) from dividends and franking credits - Protection: No quarterly NAV draw-downs exceeding 3% Also includes a 'tail hedge' for gains on large market falls. |
| Manager Comments | The Fund returned -0.44% in October. Gyrostat noted the Australian market and large cap stocks traded in a narrow range during the month with no significant market falls. In their latest report, Gyrostat highlight the Fund's strength in achieving significant outperformance on large market falls and rallies, demonstrating its low correlation to the market. Gyrostat anticipate increasing levels of 'late cycle' market volatility with elevated geopolitical risk, historically high debt levels and elevated valuations. |
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Performance Report: Insync Global Quality Equity Fund
2 Dec 2020 - Australian Fund Monitors
The Insync Global Quality Equity Fund has risen +15.95% p.a. over the past 12 months vs AFM's Global Equity Index's +2.95%. Since inception in October 2009, the Fund has returned +13.73% p.a. vs the Index's annualised return of +10.60%.
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2 Dec 2020 - Performance Report: Insync Global Quality Equity Fund
By: Australian Fund Monitors
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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high-quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are: size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio typically of 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. |
| Manager Comments | The Fund returned -3.14% in October. At month-end, the portfolio's top ten holdings included Dollar General, Domino's Pizza, Nintendo, Facebook, PayPal, Qualcomm, S&P Global, Visa, Microsoft and Adobe. The top three megatrends in the portfolio by weight were 'Cashless Society', 'Age Related Health Solutions' and 'Digitisation'. |
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Performance Report: DS Capital Growth Fund
2 Dec 2020 - Australian Fund Monitors
The DS Capital Growth Fund rose +0.80% in October, taking 12-month performance to +11.45% vs the ASX200 Accumulation Index's -8.15%. Since inception in January 2013 the Fund has returned +14.93% p.a. with an annualised volatility of 11.39%.
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2 Dec 2020 - Performance Report: DS Capital Growth Fund
By: Australian Fund Monitors
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| Fund Overview | The investment team looks for industrial businesses that are simple to understand; they generally avoid large caps, pure mining, biotech and start-ups. They also look for: - Access to management; - Businesses with a competitive edge; - Profitable companies with good margins, organic growth prospects, strong market position and a track record of healthy dividend growth; - Sectors with structural advantage and barriers to entry; - 15% p.a. pre-tax compound return on each holding; and - A history of stable and predictable cash flows that DS Capital can understand and value. |
| Manager Comments | The Fund's Sharpe and Sortino ratios (since inception), 1.14 and 1.66 respectively, by contrast with the Index's Sharpe of 0.48 and Sortino of 0.54, highlight its capacity to produce superior risk-adjusted returns while avoiding the market's downside volatility. The Fund's up-capture and down-capture ratios for performance over the past 12 months, 133% and 73% respectively, indicate that, on average, the Fund has outperformed in both rising and falling markets. The Fund's ability to significantly outperform in falling markets is further supported by its down-capture ratio (since inception) of 45%. |
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Performance Report: Montgomery Small Companies Fund
1 Dec 2020 - Australian Fund Monitors
The Montgomery Small Companies Fund has returned +15.16% over the past 12 months vs the ASX200 Accumulation Index's -8.15%. The Fund's up-capture and down-capture ratios for performance since inception in October 2019, 175.9% and 88.7%...
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1 Dec 2020 - Performance Report: Montgomery Small Companies Fund
By: Australian Fund Monitors
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| Fund Overview | Montgomery Lucent, a joint venture between Lucent Capital Partners and Montgomery Investment Management, is the investment manager of the Fund. Lucent Capital Partners is owned by its founders Gary Rollo and Dominic Rose. Gary and Dominic have worked together for three years as at February 2020 and have a combined three decades of portfolio management and equities research experience. The manager is able to invest up to 10% of the portfolio in pre-IPO opportunities. They search for companies likely to benefit from secular trends, industry change and with substantial competitive advantages. Cash typically ranges around 10%. |
| Manager Comments | The Fund returned -1.08% in October. The largest positive contributors included Adairs, Bapcor and Pendal. Key detractors included City Chic Collective, Corporate Travel Management and Megaport. Montgomery have been steadily growing the Fund's exposure to those areas of the economy that they believe will benefit from a domestic re-opening and from sustained stimulus, moving some capital from some of those structural growth winners that have driven the Fund's outperformance to date. Today, Montgomery see 'stronger for longer' as likely for domestic consumption beneficiaries - retail, auto, hospitality, domestic tourism and travel. |
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Performance Report: Glenmore Australian Equities Fund
30 Nov 2020 - Australian Fund Monitors
The Glenmore Australian Equity Fund rose +1.66% in October, taking annualised performance since inception in June 2017 to +18.77% p.a. vs the Index's +5.05%.
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30 Nov 2020 - Performance Report: Glenmore Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | Top contributors in October included Dicker Data, ARB Corporation, Opticomm, Eager Automative, People Infrastructure and NRW Holdings. The main detractors for the month was Coronado Global Resources which declined -22.0% following very strong performance in September. Glenmore don't believe the US election will influence the portfolio's composition materially. They noted that, while the outcome will almost certainly increase volatility for stocks in the short term, it has little impact on the earnings profile of the Fund's holdings. |
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Performance Report: Insync Global Capital Aware Fund
30 Nov 2020 - Australian Fund Monitors
The Insync Global Capital Aware Fund has risen +21.28% over the past 12 months vs AFM's Global Equity Index's +2.95%. Since inception in October 2009, the Fund has returned +11.88% p.a. with an annualised volatility of 9.93%.
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30 Nov 2020 - Performance Report: Insync Global Capital Aware Fund
By: Australian Fund Monitors
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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio of typically 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
| Manager Comments | The Fund returned -3.01% in October. At month-end, the portfolio's top holdings included Dollar General, Domino's Pizza, Nintendo, Facebook, Paypal, Qualcomm, S&P Global, Visa, Microsoft and Adobe. The top three megatrends in the portfolio by weight were 'Cashless Society', 'Age Related Health Solutions' and 'Digitisation'. |
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Performance Report: Ark Global Fund - Class B AUD Hedged
27 Nov 2020 - Australian Fund Monitors
The Ark Global Fund - Class B AUD Hedged rose +2.06% in October, outperforming AFM's Global Equity Index by +2.63% and taking annualised performance since inception in July 2017 to +6.23% with an annualised volatility of 9.25%.
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27 Nov 2020 - Performance Report: Ark Global Fund - Class B AUD Hedged
By: Australian Fund Monitors
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| Fund Overview | The investment objective of the Fund is to achieve long-term capital appreciation with low correlation to global equity markets through investment in the Underlying Fund. Fund One is a global macro fund that utilises quantitative research including machine learning techniques and fully automated trading algorithms which will aim to generate positive uncorrelated returns relative to any significant equity benchmark. The traded instruments are either major FX pairs or the most liquid exchange traded stock index, bond, and commodity futures across North America, Europe and Asia Pacific. The algorithm backtests over 10 years of tick data and in order to do so effectively requires machine learning to filter noise and identify meaningful signals, which results in statistically significant prediction of price movements. In production this processing is done in real time and the portfolio reacts to asset movements by rebalancing automatically to the desired risk exposure through the market impact optimised execution logic. Risk management layers built into the algorithm have been developed using the experience the team has gained from their decades in highly liquid fast-moving markets in the proprietary High Frequency Trading world. This allows the system to trade autonomously but safely to all trading opportunities and potential system issues, and to alert the team to any behaviour outside of strictly controlled bounds. The Fund is a 'feeder fund' which indirectly gains exposure to the underlying assets by investing all or substantially all of its assets in the Underlying Fund. The Fund may retain a certain amount of cash from the investment in the Fund for the purpose of payment of costs, fees, hedging and expenses. |
| Manager Comments | The Fund's capacity to significantly outperform in falling markets is highlighted by the following statistics (since inception): average negative monthly return of -1.85% vs the Index's -2.12%, maximum drawdown of -8.14% vs the Index's -13.19%, and down-capture ratio of -51.5%. The Fund's down-capture ratio indicates that, on average, the Fund has risen during the months the market has fallen. The best performing assets for the month were: Nikkei 225 (+1.33% of NAV), Silver (+1.20% of NAV) and 10 Yr Japanese Govt Bond (+1.18% of NAV). The worst performing assets included: Gold (-1.23% of NAV), 10 Yr Canadian Govt Bond (-1.48% of NAV) and Euro Stoxx (-2.13% of NAV). |
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Performance Report: Paragon Australian Long Short Fund
27 Nov 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund has returned +15.45% over the past 12 months vs the ASX200 Accumulation Index's -8.15%. Since inception in March 2013, the Fund has risen +10.77% p.a. against the Index's annualised return of +6.34%
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27 Nov 2020 - Performance Report: Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market. |
| Manager Comments | In October the Fund returned -5.44% with performance impacted by a sharp market sell-off in the last week of the month - the worst-ever loss in the week leading up to a US presidential election. Paragon's view is that the sell-off and rise in volatility was driven by anxiety around the election outcome and it being contested, the next US fiscal stimulus bill delayed until after the election, and further COVID-19 lockdowns in Europe and potentially the USA. Positive contributors for the Fund included a long position in Tesserent and short positions in AFL and Atlas Arteria. These were offset by declines across the remainder of the portfolio. The Fund ended the month with 27 long positions and 6 short positions. Paragon continue to view gold as being in a correction since its August 2020 highs - as it was in Feb-May 2019 and Aug-Nov 2019 before it broke out strongly. |
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