NEWS
Performance Report: Bennelong Emerging Companies Fund
24 Jun 2020 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +9.89% in May, outperforming the ASX200 Accumulation Index by +5.53%. The Fund has returned +22.81% p.a. since inception in November 2017 against the Index's +3.14%.
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24 Jun 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 | May saw a continuation of the recovery in the stock market. Bennelong noted this was particularly evident among micro and small cap stocks. Despite the high month-to-month stock price volatility, Bennelong believe the companies in which the Fund invests are incrementally building value as the months turn over. The Fund has taken the volatility as an opportunity to make a number of changes to the portfolio that Bennelong think will enhance the risk-return settings. At the same time, they believe the Fund remains reasonably diversified across sector and risk-return drivers. The top holdings include Viva Leisure (gyms), Mader Group (mining services) and BWX (personal care products). |
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Performance Report: Loftus Peak Global Disruption Fund
23 Jun 2020 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +3.05% in May, outperforming AFM's Global Equity Index by +0.95% and taking annualised performance since inception to +23.18% p.a. versus the Index's +12.60%.
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23 Jun 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 best performing investments in the strategy were in companies with well-developed digital strategies allowing users to work and play while sheltering in place - companies such as Amazon, Microsoft, Nvidia and Nutanix. Loftus Peak remain confident these companies will continue to deliver in a post-COVID world, especially those with strong cashflows (Apple) and successful business models (Netflix). The main detractors were Roku and Amazon. Loftus Peak noted investors appeared wary of Amazon's current quarter strategy which will see the company deploy all of its quarterly cashflow (around US4$b) to hardening its business against biohazards such as COVID-19. Roku's share price continues to be weighed down by the market's expectation of additional competitive pressures which Loftus Peak believe are overstated. With many investee companies approaching valuation targets, Loftus Peak took the opportunity to take profits and raise the Fund's cash weighting during the month. |
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Performance Report: Insync Global Capital Aware Fund
22 Jun 2020 - Australian Fund Monitors
The Insync Global Capital Aware Fund rose +7.40% in May, outperforming AFM's Global Equity Index by +5.3% and taking 12-month performance to +29.64% versus the Index's +9.83%. Since inception in October 2009, the Fund has returned +12.11%...
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22 Jun 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 they continue to hold companies exposed to Megatrends that they believe will deliver sustainable profitable growth in a post-pandemic environment. Their view is that COVID-19 simply brought forward the demise of many businesses that were already in structural decline or on shaky financial ground. The top three Megatrends in the portfolio by weighting as at the end of May were the 'Age related health solutions' megatrend (15%), the 'Digitisation' megatrend (13%), and the 'Cashless society' megatrend (10%). The Fund's top 5 holdings at month-end were PayPal, Adobe, JD Sports Fashion, S&P Global and Dominos. The Fund continues to have a portion of the underlying US dollar exposure hedged back to the Australian dollar. |
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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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