NEWS
Performance Report: Loftus Peak Global Disruption Fund
30 Jul 2020 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +2.65% in June, taking performance over FY20 to +27.67% versus AFM's Global Equity Index's +3.94%. Since inception in November 2016, the Fund has returned +23.47% p.a. against the Index's...
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30 Jul 2020 - Performance Report: Loftus Peak Global Disruption Fund
By: Australian Fund Monitors
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| Fund Overview | The investment process involves a combination of top-down analysis with fundamental bottom-up qualitative and quantitative research to derive a risk-adjusted discounted cash flow (DCF) valuation of companies in the target universe. The investment team will generally buy stocks from the pool of securities that are trading below Loftus Peaks' valuation and sell them when they are trading above Loftus Peak's valuation. The approach allows for both fundamental accounting information as well as market-oriented inputs to be factored into the portfolio construction process. Loftus Peak's model typically does not rely on leverage to deliver investment returns and specifically takes into account risk in the valuation process. Capital preservation can be managed by holding up to 50% cash. Index and currency options and futures may also be used to manage risk. |
| Manager Comments | The June return was driven by solid contributions from Qualcomm, Apple and Tencent. Key detractors included Nutanix, Arista and Alphabet. The Australian dollar appreciated +3.7% over the month against the US dollar which meant the value of the Fund's US dollar positions decreased. As at 30 June 2020, the Fund carried a foreign currency exposure of 98%. At month-end, the Fund was 77.8% invested in 24 holdings with the balance in cash. |
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Performance Report: Australian Eagle Trust Long-Short Fund
30 Jul 2020 - Australian Fund Monitors
The Australian Eagle Trust Long-Short Fund rose +3.35% in June, outperforming the ASX200 Accumulation Index by +0.74% and taking quarterly performance to +23.11% against the Index's +16.48%. Since inception in July 2016, the Fund has...
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30 Jul 2020 - Performance Report: Australian Eagle Trust Long-Short Fund
By: Australian Fund Monitors
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| Manager Comments | Top contributors in June came from long positions in ResMed Inc, Oz Minerals Ltd and Pushpay Holdings Ltd, while the largest detractors included a long position in Altium Ltd and short positions in Bank of Queensland Ltd and Cleanaway Waste Management Ltd. The Fund ended the month with 31 long positions and 25 short positions, with the largest exposure being to medical devices & services and technology stocks. The Fund ended the month with relatively less exposure to banking and real estate stocks. |
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Performance Report: Ark Global Fund - Class B AUD Hedged
30 Jul 2020 - Australian Fund Monitors
The Ark Global Fund (hedged) returned +0.90% in June, taking performance since inception in July 2017 to +7.73% p.a. with an annualised volatility of 9.44%. Over the past 12 months, the Fund has achieved a down-capture ratio of -27.93%...
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30 Jul 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 best performing assets for the month were: Gold (+1.49% of NAV), Nikkey 225 (+1.39% of NAV) and SMI Index (+0.81% of NAV). The worst performing assets for the month were: AUD/USD (-0.66% of NAV), USD/CAD (-0.84% of NAV) and Euro Stoxx (-1.63% of NAV). |
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Performance Report: Quay Global Real Estate Fund
30 Jul 2020 - Australian Fund Monitors
The Quay Global Real Estate Fund returned -0.6% in June, with the underlying stocks returning +2.7% overall before the impact of currency (-3.3%). Since inception in January 2016, the Fund has returned +5.52% p.a. with an annualised return...
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30 Jul 2020 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | Quay emphasise that short-term currency movements can act as either a tailwind or a headwind to performance. However, over time these currency movements become less relevant than the underlying operational performance of the investees. For the quarter, top contributors included STAG (US Industrial), Ventas (US Health) and Shurgard (European Storage). The largest detractors included Hysan (Hong Kong Diversified), Cubesmart (US Storage) and US cash. As at the end of June, the portfolio had relatively low cash (4%) and was invested across 27 companies. Quay noted the cash level is around the lowest in the Fund's history and the number of investees the equal highest. This reflects Quay's view of the attractive valuations currently on offer across their investment universe. |
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Performance Report: Glenmore Australian Equities Fund
29 Jul 2020 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +1.43% in June, taking quarterly performance to +29.70% versus the ASX200 Accumulation Index's +16.48%. Since inception in June 2017, the Fund has returned +15.45% p.a. against the Index's...
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29 Jul 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 during the month included Collins Foods (+17.8%), Alliance Aviation Services (+14.3%) and Opticomm (+6.3%). The most notable detractor was VGI Partners which fell -18.3% as they announced Douglas Tynan, a senior executive at the firm, would be leaving for undisclosed reasons. Glenmore noted that, while VGI Partners is a relatively small position for the Fund, they will continue to monitor the situation. |
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Performance Report: NWQ Fiduciary Fund
29 Jul 2020 - Australian Fund Monitors
The NWQ Fiduciary Fund rose in line with the market in June, returning +2.30% and taking 12-month performance to +5.39% against the ASX200 Accumulation Index's -7.68%. Since inception in May 2013, the Fund has returned +5.10% p.a. with an...
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29 Jul 2020 - Performance Report: NWQ Fiduciary Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund aims to produce returns after management fees and expenses of RBA Cash Rate + 4.0-5.0% p.a. over rolling five-year periods. Furthermore, the Fund aims to achieve these returns with volatility that is a fraction of the Australian equity market, in order to smooth returns for investors. |
| Manager Comments | The Fund's down-capture ratio for performance since inception of 13.93% highlights its capacity to significantly outperform in falling markets. This is also supported by the Fund's maximum drawdown since inception of -8.77% versus the Index's -26.75%. The Fund's positioning strikes a balance between beta and alpha return sources (60% alpha managers, 30% beta managers and 10% cash & fixed income at month-end). NWQ believe the low net market exposure should serve the Fund well if the trend of elevated market volatility continues. |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
28 Jul 2020 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund rose +0.50% in June, taking quarterly performance to +4.74%. Since inception in July 2013, the Fund has returned +4.31% p.a. with an annualised volatility of 10.61%.
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28 Jul 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Harvest Lane Asset Management employs a conservative, highly selective and opportunistic approach. Using their extensive knowledge in the area of corporate actions, the Fund's managers assess each opportunity based on a thoughtful, diligent and disciplined process and invest where they believe an opportunity exists to generate above average investment returns relative to the risk incurred. Investment decisions are made without speculating on market direction, with rigid risk controls enforced to minimise the risk of large losses of investor capital. The Fund invests in securities that are predominantly listed on the ASX and occasionally in those listed in other developed markets. Equity swaps and other derivatives may be used at times to reduce risk. The fund typically holds high levels of cash in the absence of sufficiently attractive opportunities to deploy investor capital in accordance with its objectives. |
| Manager Comments | Harvest Lane saw a resurgence of M&A activity in the first three days of June alone, while successful completion in some legacy holdings came as welcome news (much to the portfolio's benefit). They noted that, at the same time, some much needed confidence has been reinjected back into the domestic M&A market, however, they added that deal spreads continue to remain elevated reflecting the market's cautionary bias. The deal breaks Harvest Lane saw in recent months have largely been backed by private equity; Abano Healthcare, Metlifecare, CML Group, Olivers' Real Foods and Village Roadshow have all had bidders that are either entirely or majority backed by private equity, whereas completed deals in the last few months have typically come from strategic/corporate buyers. Harvest Lane noted they now view 'binding' transactions with the same level of suspicion as they have long viewed 'non-binding and indicative' approaches from private equity. Harvest Lane remain active with each new opportunity that presents itself. They believe current market conditions warrant an increased focus on risk management, however they noted they won't hesitate to transact where they recognise a favourable risk/reward opportunity. |
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Performance Report: Insync Global Capital Aware Fund
27 Jul 2020 - Australian Fund Monitors
The Insync Global Capital Aware Fund rose +11.29% over the June quarter against AFM's Global Equity Index's +5.97% and taking FY20 performance to +19.35% versus the Index's +3.94%. Since inception in October 2009 the Fund has returned...
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27 Jul 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 | Insync noted the key to the Fund's outperformance over FY20 has been its downside risk management as well as the selection of stocks with long growth runways that aren't closely linked to prevailing economic conditions. The Fund's downside protection (Put options) is being rebuilt after the options were fully exercised in March when volatility reached closed to all-time highs. Insync maintains a positive view for the medium to long-term. Their view is that very low interest rates are making quality sustainable growth companies extremely valuable. They also expect the Megatrends in which they invest are likely to resist a severe recession and a pandemic. At month-end, the portfolio's top holdings included PayPal, Visa, Microsoft, Adobe, JD Sports Fashion, Walt Disney, Accenture, Facebook, S&P Global and Domino's Pizza. The top three Megatrends in the portfolio by weight were the 'Age Related Health Solutions' and 'Digitisation' megatrends (both at 14% of the portfolio), followed by the 'Cashless Society' megatrend (13% of the portfolio). |
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Performance Report: Bennelong Concentrated Australian Equities Fund
27 Jul 2020 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +19.38% over the June quarter and ended FY20 up +8.20% against the ASX200 Accumulation Index's -7.68%. Since inception in February 2009, the Fund has returned +15.45% p.a. against...
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27 Jul 2020 - Performance Report: Bennelong Concentrated Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The overriding objective of the Concentrated Australian Equities Fund is to seek investment opportunities which are under-appreciated and have the potential to deliver positive earnings, while satisfying our stringent quality criteria. Bennelong's investment process combines bottom-up fundamental analysis together with proprietary investment tools which are used to build and maintain high quality portfolios that are risk aware. The portfolio typically consists of 20-35 high-conviction stocks from the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to ASX-listed securities. Derivative instruments are mainly used to replicate underlying positions and hedge market and company specific risks. |
| Manager Comments | The main contributors to performance over the quarter were James Hardie, Breville Group, Fortescue Metals Group and IDP Education. The main detractors were CSL, Fisher & Paykel Healthcare and Afterpay. Bennelong maintain a reasonably balanced outlook for the market, trying not to be either too bullish or too bearish. They noted that, in this context, they continue to see good prospects for a continued recovery in the economy and market. |
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Performance Report: Bennelong Emerging Companies Fund
24 Jul 2020 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose in line with the market in June, returning +2.22%. Over FY20, the Fund has risen +17.33% against the ASX200 Accumulation Index's -7.68%. Since inception in November 2017, the Fund has returned...
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24 Jul 2020 - Performance Report: Bennelong Emerging Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may invest in securities expected to be listed on the ASX within 12 months. The Fund may also invest in securities listed, or expected to be listed, on other exchanged where such securities relate to ASX-listed securities |
| Manager Comments | Over the June quarter the Fund outperformed the Index by +31.54% as the micro and small-cap stocks held by the Fund recovered even harder than the broader market. However, Bennelong reiterate that, while micro and small-cap stocks can deliver larger returns, they also come with significantly greater risk. This is highlighted by the fund's annualised volatility since inception of 36.54% against the Index's 17.40%. Top contributors included Viva Leisure, BWX, Baby Bunting, EML Payments and Mader. While each of these companies operate in very different industries, Bennelong noted they are all high quality and believe they have very promising growth prospects. As a result of the volatility seen so far in 2020, particularly in the micro and small-cap end of the market, Bennelong have made a number of changes to the portfolio. They believe the portfolio is currently well positioned for attracted returns over the long-term, regardless of the market's short-term movements. |
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