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Performance Report: Gyrostat Absolute Return Income Equity Fund
9 Jun 2020 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund returned +0.77% in May, taking annualised performance since inception in December 2010 to +5.07%. Over the past 12 months, the Fund has returned +10.15% against the ASX200 Accumulation Index's -6.70%.
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9 Jun 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 37 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 market conditions in May enabled Gyrostat to enter additional positions for more elevated returns on any uplift in market volatility. The investment strategy allows for up to 15% of the Fund's assets to be invested in international assets with positions in S&P500, NASDAQ, Hang Seng, MSCI Developed and Emerging markets (among others). Gyrostat anticipate returns in all market environments of at least BBSW 90 +3% with 'left' tail in case of large market falls. Gyrostat anticipate increasing levels of 'late cycle' market volatility with geopolitical tensions elevated, historically high debt levels, and elevated valuations. |
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Performance Report: Paragon Australian Long Short Fund
5 Jun 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +21.4% in May, outperforming the ASX200 Accumulation Index by +17.04% and taking annualised performance since inception in March 2013 to +9.53% versus the Index's +6.13%.
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5 Jun 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 | The Paragon Australian Long Short Fund rose +21.4% in May, outperforming the ASX200 Accumulation Index by +17.04% and taking annualised performance since inception in March 2013 to +9.53% versus the Index's +6.13%. The Fund's down-capture ratio of 68.74% for performance since inception indicates that, on average, the Fund has outperformed during the market's negative months since it began. Positive contributors in May came from the Fund's gold and technology holdings. Paragon maintain the view that the 1Q20 bear market is likely to prove cyclical, comparing most closely to the cyclical bear market crash of 1987 which was followed by the resumption of a secular bull market. Paragon are excited about the opportunities within their thematics and noted they are fully invested to capitalise. They also continue to find lucrative gold-equities which they expect to emerge as the next market leaders. In their latest report, Paragon share their views on Pointsbet. They exited their profitable position in Pointsbet ahead of the March sell-off and took the opportunity to buy back in April at a materially lower price point. In the near-term, they see Pointsbet entering a positive catalyst cycle with the US national sports leagues progressively commencing, product (sports betting and iGaming) rolling out across more states, and further state access agreements to be executed. |
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Performance Report: Datt Capital Absolute Return Fund
4 Jun 2020 - Australian Fund Monitors
The Datt Capital Absolute Return Fund rose +9.22% in May, outperforming the ASX200 Accumulation Index by +4.86% and taking annualised performance since inception in August 2018 to +8.24% versus the Index's -0.55%. The Fund has outperformed...
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4 Jun 2020 - Performance Report: Datt Capital Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Our investment objectives are: 1) To minimise the risk of permanent capital loss 2) Generate a net return of 10% through the economic cycle An unconstrained, concentrated approach focused on superior risk-adjusted returns. The investment strategy: - targets long-term capital growth in a prudent manner, with an emphasis on capital preservation and low volatility in returns - aims to outperform in markets where equities are down - diversifies investments across asset classes and duration to reduce risk while maintaining relatively concentrated exposure to attractive investment opportunities - is an application of the Manager's investment process, that has no institutional constraints and is completely benchmark unaware |
| Manager Comments | The Fund's CRE debt portfolio continues to perform to Datt Capital's expectations. They noted their focus on short duration, low LVR and double-digit yielding deals restricted to the core Australian cities (Sydney and Melbourne) continue to bear fruit. The Fund's equity portfolio also performed well in May. Datt Capital noted they continue to find and exploit inefficiently priced opportunities in the market. Looking forward, they are expecting a weak month for equities in June as Australia continues to reopen society, and the social and economic impact of the lockdown is gradually revealed. |
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Performance Report: Frazis Fund
3 Jun 2020 - Australian Fund Monitors
The Frazis Fund rose +24.9% in April, outperforming AFM's Global Equity Index by +20.75%. Frazis noted they have oriented the portfolio towards companies that are accelerating in the current environment which supported performance in April.
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3 Jun 2020 - Performance Report: Frazis Fund
By: Australian Fund Monitors
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| Fund Overview | The manager follows a disciplined, process-driven, and thematic strategy focused on five core investment strategies: 1) Growth stocks that are really value stocks; 2) Traditional deep value; 3) The life sciences; 4) Miners and drillers expanding production into supply deficits; 5) Global special situations; The manager uses a macro overlay to manage exposure, hedging in three ways: 1) Direct shorts 2) Upside exposure to the VIX index 3) Index optionality |
| Manager Comments | Frazis are taking a concentrated diversified approach to the portfolio: concentrated in thematics that are accelerating in the current environment (such as digital health, online retail and companies that facilitate remote work/study/play), but diversified within each theme, holding 30-35 names in total. Frazis believe there has never been a better time to be nimble and free to allocate entirely to companies that are performing well. |
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Performance Report: Touchstone Index Unaware Fund
3 Jun 2020 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +9.94% in April, outperforming the ASX200 Accumulation Index by +1.16% and taking annualised performance since inception in April 2016 to +4.98% with an annualised volatility of 16.21%.
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3 Jun 2020 - Performance Report: Touchstone Index Unaware Fund
By: Australian Fund Monitors
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| Fund Overview | The portfolio is constructed using Touchstone's Quality-At-a-Reasonable-Price ('QARP') investment process. QARP is a fundamental bottom-up process, however, it also incorporates a top-down risk management framework designed to successfully manage the portfolio during varying market conditions and economic cycles. The Touchstone Fund is concentrated, typically holding between 15-20 stocks. No individual stock will ever make up more than 10% of the portfolio at any one time. The Investment Manager may temporarily exceed the exposure limits of the Fund occasionally, particularly during periods of market volatility, to allow for holdings in excess of this 10% limit where the increase in value of the underlying security is due to market movement. The Fund may also hold between 0-50% of the portfolio in cash. The Fund has a high level of associated risk, therefore, the minimum suggested investment time-frame is 5 years. |
| Manager Comments | As at the end of April, the Fund held 21 positions with a median position size of 4.4%. The portfolio's holdings had an average forward year price/earnings of 19.8, forward-year tangible ROE of 11.9% and forward-year dividend yield of 2.8%. The Fund ended the month with a cash weighting of 7.4%. The Fund primarily seeks to select stocks from the ASX300 Index, typically holding between 10-30 stocks. The Fund seeks to invest in reasonably priced, good quality companies with a significant share of expected returns coming from sustainable dividends. |
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Performance Report: Quay Global Real Estate Fund
2 Jun 2020 - Australian Fund Monitors
The Quay Global Real Estate Fund returned -1.3% in April. Since inception in January 2016, the Fund has returned +6.14% p.a. with an annualised volatility of 12.32%. Top contributors during the month included Stag Industrial, Safe Store...
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2 Jun 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 | The three largest positive contributors for the month in order were Stag Industrials (US Industrial), Safe Store (UK Storage) and Alexandria Real Estate Equities (US, Life Science Office). Key detractors, excluding currency, were Cube (US Storage), Life Storage (US Storage) and Leg Immobilien (German Apartments). Quay believe tough time are ahead and, as a result, the rate of rent growth across the board will slow. They also expect vacancy levels across the board to rise as those tenants that cannot afford to pay their rent close stores, wind back operations, give back space or go out of business. Quay noted that historically real estate has proven to be defensive in tough economic times. They believe that as we move further away from the initial shock of the changes brought on by COVID-19, the markets' focus will be on the implications of double digit unemployment and the impact of the economic slowdown on industry and business. Quay expect that it will be during this time that the defensive attributes of well selected real estate companies will be valued. |
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Performance Report: DS Capital Growth Fund
1 Jun 2020 - Australian Fund Monitors
The DS Capital Growth Fund rose +14.05% in April, outperforming the ASX200 Accumulation Index by +5.27 and taking annualised performance since inception in December 2012 to +13.05% versus the Index's annualised return of +7.29% over the...
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1 Jun 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 capacity to protect investor capital in falling markets over the long-term is highlighted by the following statistics (since inception): Sortino ratio of 1.38 versus the Index's 0.50, down-capture ratio of 45.22%, and an average negative monthly return of -2.06% versus the Index's -3.12%. |
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Performance Report: Wheelhouse Global Equity Income Fund
29 May 2020 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund has returned +8.47% p.a. with an annualised volatility of 7.69% since inception in May 2017. By contrast, AFM's Global Equity Index has returned +9.67% p.a. with an annualised volatility of 11.64%...
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29 May 2020 - Performance Report: Wheelhouse Global Equity Income Fund
By: Australian Fund Monitors
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| Fund Overview | To pursue this objective, the Investment Manager is responsible for actively managing, monitoring and tailoring the integration of derivative contracts alongside the Morningstar Portfolio, while taking into account changing market and stock specific conditions. The Investment Manager is responsible for maximising the structural benefits of short option positions (lowered Volatility, improved capital preservation, higher income generation), whilst mitigating, minimising and monitoring the structural negatives (variable market exposure, option expiries, collateral management and asymmetric return profiles). In addition, long derivatives positions are also used to enhance the capital preservation characteristics of the Fund in more extreme market movements. As a consequence of the integration of Derivatives, returns of the strategy, intra-cycle, are expected to vary from the underlying Morningstar Portfolio due to these characteristics. For example in weak markets, or in extended sideways markets, the Fund is expected to outperform relative to the Morningstar Portfolio. Conversely in strong positive markets the Fund is expected to underperform. |
| Manager Comments | The Fund's capacity to protect investors' capital in falling markets is highlighted by the following statistics (since inception): Sortino ratio of 1.56 versus the Index's 1.02, largest drawdown of -6.64% versus the Index's -13.19% over the same period, and down-capture ratio of 45.32%. The Fund returned -0.19% in April. This return comprised +6.76% from the portfolio (in USD) and a negative return of -6.95% from the strengthening of the Australian dollar versus the US dollar. Top contributors included Veeva Systems, Microchip Technology, ServiceNow, Nabtesco Corp and Compass Minerals. Key detractors included Kao Corp, Airbus, Blackbaud, Kerry Group and Toronto-Dominion Bank. |
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Performance Report: NWQ Fiduciary Fund
28 May 2020 - Australian Fund Monitors
The NWQ Fiduciary Fund rose +1.31% in April, taking annualised performance since inception in May 2013 to +4.54% with an annualised volatility of 5.56%. By contrast, the ASX200 Accumulation Index has returned +5.38% p.a. with an annualised...
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28 May 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 65% of the fall in the Australian market for the calendar year (-5.82% for the Fund vs -16.35% for the market) and NWQ believe they are well positioned for a full recovery. They noted this recovery began in April with the Fund's underlying managers profiting from the combination of greater return dispersion around quality factors and selective participation in capital raisings. NWQ expect these tailwinds to continue in the coming months as the Australian economy works its way out of the COVID-19 induced shutdown. |
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Performance Report: Datt Capital Absolute Return Fund
27 May 2020 - Australian Fund Monitors
The Datt Capital Absolute Return Fund rose +12.00% in April, outperforming the ASX200 Accumulation Index by +3.22% and taking annualised performance since inception in August 2018 to +3.31% versus the Index's -2.97%. The Fund has...
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27 May 2020 - Performance Report: Datt Capital Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Our investment objectives are: 1) To minimise the risk of permanent capital loss 2) Generate a net return of 10% through the economic cycle An unconstrained, concentrated approach focused on superior risk-adjusted returns. The investment strategy: - targets long-term capital growth in a prudent manner, with an emphasis on capital preservation and low volatility in returns - aims to outperform in markets where equities are down - diversifies investments across asset classes and duration to reduce risk while maintaining relatively concentrated exposure to attractive investment opportunities - is an application of the Manager's investment process, that has no institutional constraints and is completely benchmark unaware |
| Manager Comments | Datt Capital noted that, while our social and economic environments have been greatly hamstrung by overzealous government curfews, they are positive that we have seen the worst of it. Datt Capital continue to find opportunities in the market and added that they will remain agile and disciplined in their asset allocation. The Fund's CRE debt portfolio continues to perform in line with Datt Capital's expectations. The Fund continues to benefit from the manager's focus on short duration, low LVR and double-digit yielding deals restricted to the core Australian cities. The Fund's equity portfolio also performed well in April. The Fund recently added Self Wealth to the portfolio, as well as some other new growth opportunities via placements. Datt Capital expect the portfolio to remain fluid in terms of exposures and individual positions going forward. |
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