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Performance Report: Delft Partners Global High Conviction
7 Feb 2020 - Australian Fund Monitors
The Delft Global High Conviction Strategy returned +6.69% over the December quarter and ended 2019 up +26.73%. Since inception in August 2011, the Strategy has returned +16.82% p.a. versus AFM's Global Equity Benchmark's +14.80%.
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7 Feb 2020 - Performance Report: Delft Partners Global High Conviction
By: Australian Fund Monitors
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| Fund Overview | The quantitative model is proprietary and designed in-house. The critical elements are Valuation, Momentum, and Quality (VMQ) and every stock in the global universe is scored and ranked. Verification of the quant model scores is then cross checked by fundamental analysis in which a company's Accounting policies, Governance, and Strategic positioning is evaluated. The manager believes strategy is suited to investors seeking returns from investing in global companies, diversification away from Australia and a risk aware approach to global investing. It should be noted that this is a strategy in an IMA format and is not offered as a fund. An IMA solution can be a more cost and tax effective solution, for clients who wish to own fewer stocks in a long only strategy. |
| Manager Comments | The Strategy's quarterly unhedged returns were impacted slightly by the rise in the Australian dollar. They suspect the departure of the UK, a sizeable net contributor, from the EU may be a catalyst for a re-appraisal of EU economic policy and noted they remain underweight the region and the Euro while the politicians continue to impair economic wellbeing. Notable contributors over the quarter were Hitachi High Tech (+21%), Sony (+16%), Legal & General (+25%) and AES (+23%). Delft remain unhedged for AUD$ based investors. At the end of the quarter the portfolio was most heavily weighted towards North America (56% of the portfolio), followed by Japan (17%), Asia ex-Japan (12%), United Kingdom (8%), France/Germany (6%) and 1% in cash. By sector the Fund was most heavily weighted towards the Financials sector (22% of the portfolio), followed by IT (16%), Industrials (14%), Consumer Discretionary (13%), Health Care (9%), Utilities (9%), Communication Services (7%), Consumer Staples (4%), Energy (3%) and Materials (2%). |
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Performance Report: Frazis Fund
7 Feb 2020 - Australian Fund Monitors
The Frazis Fund rose +11.04% over the December 2019 quarter and ended CY2019 up +24.18%. The portfolio contracted by -4.0% in December, though more than half of this was due to currency.
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7 Feb 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 | The Fund's core holdings in Afterpay, Carvana, Pinduoduo and Pointsbet performed well over the year. Frazis noted the Fund is already starting to reap the rewards of increasing their investments in those companies this year. The Fund is now concentrated into seven core investments: US software (Twilio, Alteryx, MongoDB, Shopify), Afterpay, Carvana, Diagnostics (Exact Sciences and Guardant Health), Pinduoduo, a small number of high growth Australian smallcaps such as Pointsbet, and life sciences (drug development, DNA synthesis, tissue regeneration and genetic science). The Fund's average portfolio organic growth rate is tracking at over 80%. Frazis expect this to slow, however they believe it's reasonable to expect the Fund's companies to be over 50% larger on a revenue basis 12 months from now. Frazis expect the next move in interest rates in Australia to be up, with corresponding increase in the AUD. |
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Performance Report: Touchstone Index Unaware Fund
7 Feb 2020 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +22.84% over 2019 with a volatility of 8.45%. Since inception in April 2016, the Fund has returned +11.55% p.a. with an annualised volatility of 9.87%.
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7 Feb 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 December, the Fund held 21 stocks with a median position size of 4.4%. The portfolio's holdings had an average forward year price/earnings of 17.0, forward year EPS growth of 6.4%, forward year tangible ROE of 23.3% and forward year dividend yield of 3.9%. The Fund's cash weighting was increased to 9.3% from 6.1% as at the end of November. 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: Ark Global Fund - Class B AUD Hedged
5 Feb 2020 - Australian Fund Monitors
The Ark Global Fund (Hedged) has returned +10.99% over the past 12 months and +9.53% p.a. since inception in July 2017. The Fund's down-capture ratio for performance since inception of -81.34% highlights the Fund's capacity to...
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5 Feb 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 top performing assets for the month were: S&P/TSX 60 Index (+2.57% of NAV), 10-Year T-Bond (+1.72% of NAV), and AUD/USD (+1.60% of NAV). The worst performing assets were: Platinum (-1.84% of NAV), E-mini S&P 500 (-1.12% of NAV), and 10-Year Government of Canada Bond (-0.96% of NAV). Ark noted the following popular predictions for what 2020 holds in store for investors: no global recession, no rate rises, some rate cuts, steady stock markets (thanks to the rate cuts) and another good year for tech stocks. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
4 Feb 2020 - Australian Fund Monitors
The Bennelong Concentrated Australian Equity Fund rose +28.37% over 2019, outperforming the ASX200 Accumulation Index by +4.97% and taking annualised performance since inception in February 2009 to +16.68% versus the Index's +10.82%.
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4 Feb 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 Fund returned +5.51% over the December quarter versus the Index's +0.68%. The main contributor to the quarterly return was the Fund's outsized position in the healthcare sector, and in particular its positions in Fisher & Paykel Healthcare and CSL. The other main contributor to the Fund's relative outperformance was avoiding the banks' underperformance - the Fund owns no banks. There were detractors, however they didn't detract significantly from performance. The largest detractor was Afterpay, which gave back some of the outperformance delivered in previous periods. Bennelong believe the many social, political and economic uncertainties that overshadowed markets in 2019 remain. They expect the ASX to produce reasonable returns over the medium term, albeit with ups and downs along the way. The Fund is selectively invested in a group of high quality growth stocks including names such as CSL and Fisher & Paykel Healthcare. |
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Performance Report: Datt Capital Absolute Return Fund
3 Feb 2020 - Australian Fund Monitors
The Datt Capital Absolute Return Fund returned +0.84% in December, outperforming the ASX200 Accumulation Index by +3.01% and taking annualised performance since inception in August 2018 to +9.68% versus the Index's +9.28%.
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3 Feb 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 | During December the Fund evaluated 2 debt deals and invested in 1 new opportunity in commercial real estate. Datt Capital continue to monitor a number of fixed income instruments in the distressed and special situation space. The Fund's equity exposure decreased as the manager decided to exit Lynas. The Fund's current equity exposures are: Afterpay, Adriatic Metals, Alice Queen, Argonaut Resources, Valmec, Whitehaven Coal and Yandal Resources. Datt Capital noted they have a full pipeline of potential investment opportunities which they consider materially undervalued and will carefully consider for inclusion in the portfolio at the appropriate time. |
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Fund Review: Bennelong Long Short Equity Fund December 2019
3 Feb 2020 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available. The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index...
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3 Feb 2020 - Fund Review: Bennelong Long Short Equity Fund December 2019
By: Australian Fund Monitors
AFM Fund Review - December 2019 (pdf format)
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index, with over 16-years' track record and an annualised returns of 15.17%.
- The consistent returns across the investment history highlight the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 0.94 and 1.55 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - December 2019 (pdf format)
Performance Report: DS Capital Growth Fund
31 Jan 2020 - Australian Fund Monitors
The DS Capital Growth Fund rose +0.51% in December, outperforming the ASX200 Accumulation Index by +2.68% and taking the 12-month return to +27.09% versus the Index's 23.40%. Since inception in December 2012, the Fund has returned +15.41%...
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31 Jan 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 rose +4.43% over the December quarter, outperforming the Index by +3.75%. During November DS Capital visited the UK and found that most businesses were deferring investment decisions due to election and Brexit related uncertainty. Portfolio constituents which made positive announcements during the quarter included Resimac Group, Ooh!Media and Uniti Group. Negative announcements came from McMillan Shakespeare. On the IPO front the Fund realised a profit on a small investment in an infant formula business called Nuchev. The Fund participated in secondary capital raisings for Uniti Group and Zip Co. The Fund has also sold its holdings in Challenger and in Cineworld (UK listed cinema group). DS Capital noted there is a long list of economic and political events that will make headlines in 2020 and influence stock markets to varying degrees. These include Brexit, US elections, trade talks and mid-east tensions. They expect the real influences on investment markets to come from economic fundamentals and corporate profits. |
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Performance Report: NWQ Global Markets Fund
31 Jan 2020 - Australian Fund Monitors
The NWQ Global Markets Fund returned -2.61% in December and has returned +1.84% p.a. since inception in September 2018. NWQ noted the month was a challenging one for managers adopting both discretionary and systematic approaches.
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31 Jan 2020 - Performance Report: NWQ Global Markets Fund
By: Australian Fund Monitors
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| Fund Overview | This is achieved through active allocations to a select number of liquid alternative managers that employ a variety of strategies. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record. |
| Manager Comments | The Fund's equity and commodity positions were profitable in December while the FX and fixed income positions produced losses. NWQ highlighted that the Fund is a 'long volatility' strategy and as a strategy allocation within an investor's portfolio will be latent during periods of material outperformance for equities - such as calendar year 2019 - waiting to play its role during periods when equities and other long duration assets are challenged - such as the December quarter of 2018. |
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Performance Report: Australian Eagle Trust Long-Short Fund
30 Jan 2020 - Australian Fund Monitors
The Australian Eagle Long-Short Fund has risen +29.82% over the past 12 months versus the ASX200 Accumulation Index's +23.40%. Since inception in July 2016, the Fund has returned +19.46% p.a. versus the Index's +11.90%.
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30 Jan 2020 - Performance Report: Australian Eagle Trust Long-Short Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund returned -1.78% net of fees in December, outperforming the Index by +0.39%. The largest positive contributions came from long positions in Fortescue Metals Group and Pushpay Holdings and a short position in Whitehaven Coal, while the largest detractors were long positions in Treasury Wine Estates, Japara Healthcare and National Australia Bank. The Fund had 29 long positions and 21 short positions at the end of the month, with the largest exposure to medical devices & services and technology stocks. There was relatively less exposure in the banking and materials stocks. |
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