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Performance Report: Bennelong Australian Equities Fund
19 Jun 2020 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +7.11% in May, outperforming the ASX200 Accumulation Index by +2.75% and taking annualised performance since inception in February 2009 to +12.91% versus the Index's +9.08%.
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19 Jun 2020 - Performance Report: Bennelong Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Bennelong Australian Equities Fund seeks quality investment opportunities which are under-appreciated and have the potential to deliver positive earnings. The investment process combines bottom-up fundamental analysis with proprietary investment tools that are used to build and maintain high quality portfolios that are risk aware. The investment team manages an extensive company/industry contact program which helps identify and verify various investment opportunities. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to the ASX-listed securities. The Fund typically holds between 25-60 stocks with a maximum net targeted position of an individual stock of 6%. |
| Manager Comments | The Bennelong Australian Equities Fund rose +7.11% in May, outperforming the ASX200 Accumulation Index by +2.75% and taking annualised performance since inception in February 2009 to +12.91% versus the Index's +9.08%. The Fund's up-capture and down-capture ratios for performance since inception, 130.0% and 96.3% respectively, highlight the Fund's capacity to outperform during the market's positive months and in line with the market during negative months. As at the end of May, the Fund's weightings had been increased in the Discretionary, Materials, Industrials, Communication and IT sectors, and decreased in the Health Care, Consumer Staples, REIT's and Financials sectors. The Fund aims to invest in high quality companies with strong growth outlooks and underestimated earnings momentum. The portfolio's characteristics, as detailed in the latest report, indicate that the Fund is in line with its investment objective. |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
19 Jun 2020 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund has returned +4.29% p.a. with an annualised volatility of 10.67% since inception in July 2013. This return has been achieved with a down-capture ratio of 16.19% which indicates that, on average, the...
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19 Jun 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 | The Harvest Lane Absolute Return Fund has returned +4.29% p.a. with an annualised volatility of 10.67% since inception in July 2013. This return has been achieved with a down-capture ratio of 16.19%, highlighting the Fund's capacity to outperform during the market's negative months. The portfolio retreated -2.02% in May, although the result is largely attributable to an unfavourable outcome specific to one holding. Harvest Lane noted almost everywhere else in the portfolio they saw broad based gains. Alto Metals was a standout performer as they received two counterbids during the month. The Fund's holding in Ora Banda Mining also paid off, having risen almost 200% off its March lows. In their latest report, Harvest Lane discuss their views on Scheme Implementation Agreements (SIAs). They feel the COVID-19 disruption has exposed fragilities in SIAs that give effect to merger and acquisitions via a Scheme of Arrangement. Transactions undertaken in this manner are generally thought of as 'friendly', however, Harvest Lane have recently observed bidder behaviour that is anything but. Read the latest report for the full discussion. |
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Performance Report: Cyan C3G Fund
18 Jun 2020 - Australian Fund Monitors
The Cyan C3G Fund rose +9.16% in May, outperforming the ASX200 Accumulation Index by +4.8% and taking annualised performance since inception in August 2014 to +13.04% versus the Index's +4.84%.
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18 Jun 2020 - Performance Report: Cyan C3G Fund
By: Australian Fund Monitors
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | Cyan noted corporate transactions in May were an almost daily occurrence, with ASX listed companies looking for survival capital or simply taking the opportunity to raise money. Every transaction Cyan were involved in was oversubscribed and allocations were scaled back aggressively. This further reinforced their view that there continues to be substantial excess capital looking to be allocated towards equities. Despite the strong overall gain, the Fund did have a handful of negative positions. The largest detractor was Readcloud (RCL) which fell 20%. Cyan continue to avoid what they believe to be high-risk sectors, such as: lending, tourism, real-estate and highly geared companies. Whilst aware of impending economic risks, they noted they believe the Fund's core holdings remain well away from the eye of any storm. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
17 Jun 2020 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +6.32% in May, outperforming the ASX200 Accumulation Index by +1.96% and taking annualised performance since inception in February 2009 to +15.54% versus the Index's +9.08%.
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17 Jun 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 | As at the end of May, the portfolio's weightings had been increased in the Discretionary, Materials and Industrials sectors, and decreased in the Health Care, Consumer Staples, REIT's and Financials sectors. The Fund aims to invest in a concentrated portfolio of high quality companies with strong growth outlooks, underestimated earnings momentum and underestimated prospects. By comparison with the Fund's benchmark (ASX300 Accumulation Index), the portfolio's holdings, on average, have a higher return on equity, lower debt/equity, higher sales growth, higher EPS growth, higher price/earnings and lower dividend yield which together indicate that the Fund is in line with its investment objectives. |
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Performance Report: 4D Global Infrastructure Fund
17 Jun 2020 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +4.98% in May, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +4.33% and taking annualised performance since inception in March 2016 to +10.46% with an annualised volatility of 12.41%.
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17 Jun 2020 - Performance Report: 4D Global Infrastructure Fund
By: Australian Fund Monitors
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| Fund Overview | The fund will be managed as a single portfolio of listed global infrastructure securities including regulated utilities in gas, electricity and water, transport infrastructure such as airports, ports, road and rail as well as communication assets such as the towers and satellite sectors. The portfolio is intended to have exposure to both developed and emerging market opportunities, with country risk assessed internally before any investment is considered. The maximum absolute position of an individual stock is 7% of the fund. |
| Manager Comments | The strongest performer for May was US midstream operator Targa Resources, up +38% rebounding from a very oversold position following the March double shock of commodity price declines and COVID-19. The weakest performer was Mexican tower operator Telesites, down -9.9%. 4D noted Telesites held up remarkably well during the March sell-off and expect the May correction was attributable to both rebalancing and an increase in Mexican sovereign risk as the government interferes in the energy sector. 4D continue to maintain a relatively high cash position awaiting core economic data and stabilisation of the contagion as they look to capitalise on the opportunities currently on offer. |
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Performance Report: NWQ Fiduciary Fund
17 Jun 2020 - Australian Fund Monitors
The NWQ Fiduciary Fund rose +2.31% in May, taking annualised performance since inception in May 2013 to +4.83% with an annualised volatility of 5.57%. By contrast, the ASX200 Accumulation Index has returned +5.95% p.a. with an annualised...
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17 Jun 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 has hedged out 70% of the fall in the Australian market for the calendar year (-3.64% for the Fund vs -12.70% for the market). NWQ believe the Fund is well positioned for a full recovery. The Fund's recovery began in April and continued in May with the Alpha managers taking advantage of both relative value opportunities and corporate activity. NWQ expect these sources of alpha to persist as the Australian economy reopens and businesses and consumers come to terms with the 'new normal'. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
16 Jun 2020 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund returned +0.73% in May, taking annualised performance since inception in May 2006 to +8.58% with an annualised volatility of 7.18%. By contrast, the ASX200 Accumulation Index has returned +5.13%...
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16 Jun 2020 - Performance Report: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. Detailed analysis of company valuations using financial statements and forecasts, particularly focusing on free cash flow, is conducted. Technical analysis is used to validate the Manager's fundamental research and valuations and to manage market timing. A significant portion of the Fund's overall performance can be attributed to the attention and importance given to the macro economic outlook and the ability and willingness to adjust the Fund's market risk. |
| Manager Comments | Top contributors for May included Saracen, James Hardie, Pointsbet, Ramelius and Appen. Key detractors included NAB, CSL, Jumbo Interactive and Sydney Airport. The Fund's Short Book detracted -185bp from performance due to the strong rally in the market. Kardinia also participated in a significant number of capital raisings/placements during the month, including Qube, Elmo Software, Megaport, Incitec Pivot, Breville Group, Bigtincan and Decmil. The Fund's net equity market exposure was increased from 43.3% to 71.3% (95.3% long and 24.0% short), with the key changes being a significant increase in the Fund's banking exposure (CBA, NAB) as well as technology, resources and oil stocks. Kardinia believe the recent lifting of restrictions across the nation and the magnitude of the stimulus provided offer significant short-term positives, however, they don't believe the recent rally represents a new bull market. Their view is that volatility will remain high and that a new bull market is several years away. They expect the market to trade in a broad range until the outcome of the US election is known. |
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Performance Report: Glenmore Australian Equities Fund
15 Jun 2020 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +9.64% in May, outperforming the ASX200 Accumulation Index by +5.28% and taking annualised performance since inception in June 2017 to +15.36% versus the Index's +4.35%.
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15 Jun 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 May included Moelis Australia, Alliance Aviation Services, People Infrastructure, NRW Holdings, Fiducian Group, Magellan Financial Group, Integral Diagnostics, Dicker Data and Mineral Resources. There were no detractors of any materiality during the month. Glenmore's view is that, despite the recession, there still exist stocks where the fall in price has been excessive relative to its long term valuation. Glenmore's initial take on recent earnings updates from ASX companies is that the earnings impact of COVID-19 is not going to be as severe as the fall in stock prices in February and March implied. They noted that, while not underplaying the significance of COVID-19's impact on the economy, they don't believe it is sufficiently negative to derail the earnings growth prospects of high quality businesses. Glenmore remain comfortable with the portfolio's composition. |
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Performance Report: PURE Income and Growth Fund
12 Jun 2020 - Australian Fund Monitors
The PURE Income and Growth Fund returned +5.7% in May. The Fund has now fully recovered the COVID-19 drawdown and is +6.1% CYTD. Since inception in December 2018, the Fund has returned +20.3% on a cumulative basis.
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12 Jun 2020 - Performance Report: PURE Income and Growth Fund
By: Australian Fund Monitors
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| Fund Overview | For fund investors, The Income and Growth Fund offers a unique risk/return profile. This form of investing includes a high yield, yet retains equity exposure to successful growth stories. Furthermore, the Fund's superior position in the investee Company's capital structure insulates investors from capital loss. PURE targets a return of 15% per annum through a mixture of Income (8-9%) and capital growth. While most investments involve ASX listed companies, the fund mandate retains modest flexibility to capitalise on attractive pre-IPO opportunities. |
| Manager Comments | PURE is now actively engaged in deal origination as the Australian economy begins to unfreeze. They noted that, while COVID-19 has been a difficult period for most, there are still good businesses out there with meaningful growth opportunities. The investment team is assessing business models that have experienced minimal disruption from the lockdown. The team is pleased with how the portfolio has performed throughout a very difficult 2020 year-to-date and are excited by the quality of opportunities under review. |
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Performance Report: Bennelong Long Short Equity Fund
11 Jun 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund returned +0.22% in May, taking 12 month performance to +29.06% and the Fund's annualised return since inception in February 2002 to +15.43%. By contrast, the ASX200 Accumulation Index has returned...
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11 Jun 2020 - Performance Report: Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Fund Overview | In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. The Bennelong Market Neutral Fund, with same strategy and liquidity is available for retail investors as a Listed Investment Company (LIC) on the ASX. |
| Manager Comments | Positive returns in May were broadly spread across sectors whilst negative returns were concentrated in Healthcare and Consumer, specifically in the three bottom pairs. The top pairs for the month were long TPG Telecom / short Telstra, long Pointsbet/Crown / short SkyCity, and long Xero / short TechnologyOne. The bottom three pairs were long ResMed / short Ansell, long CSL / short Sonic Healthcare, and long JB Hi-Fi / short Super Retail. Bennelong noted the enormous bond purchases by central banks has helped stimulate a 'risk on' environment in share markets since the lows of March which can present a headwind for the portfolio. |
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