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Performance Report: Bennelong Australian Equities Fund
22 May 2020 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +12.30% in April, outperforming the ASX200 Accumulation Index by +3.52%. Since inception in February 2009, the Fund has returned +12.32% p.a. versus the Index's +8.74%.
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22 May 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 +12.30% in April, outperforming the ASX200 Accumulation Index by +3.52%. Since inception in February 2009, the Fund has returned +12.32% p.a. versus the Index's +8.74%. The Fund's up-capture and down-capture ratios for performance since inception, 126.55% and 96.34% respectively, highlight the Fund's capacity to outperform in both rising and falling markets. As at the end of April, the portfolio's weightings had been increased in the Discretionary, Materials, Industrials, Communication, REIT's and Financials sectors, and decreased in the Health Care sector. 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: 4D Global Infrastructure Fund
21 May 2020 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +2.21% in April, outperforming its benchmark by +1.63% and taking annualised performance since inception in March 2016 to +9.40%. 4D continue to maintain a relatively high cash position awaiting core...
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21 May 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 in April was US midstream operator Targa Resources (+89%) recovering some of its March losses. The weakest performer was US utility CMS (-2.8%). 4D expect utilities to offer relative resilient earnings over coming months as economic deterioration plays around the globe. 4D expect investors' focus to turn to not only the shape of the economic recovery but also whether the huge monetary and fiscal stimulus measures are inflationary as we move into phase 2 of the pandemic (as defined by the IMF). 4D noted the stimulus could lead to inflation if demand exceeds supply for a sustained period. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
20 May 2020 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund has returned +15.08% over the past 12 months and +5.03% p.a. since inception in December 2010. In April, the Fund's returns fell consistent with Gyrostat's guidance as market volatility fell...
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20 May 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 | Gyrostat noted the market conditions in April allowed them to enter additional positions for more elevated returns on any uplift in market volatility. The Fund's investment strategy allows 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 increasing levels of 'late cycle' market volatility with elevated geopolitical tensions, historically high debt levels and elevated valuations. |
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Performance Report: Glenmore Australian Equities Fund
19 May 2020 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +16.63% in April, outperforming the ASX200 Accumulation Index by +7.85% and taking annualised performance since inception in June 2017 to +12.24% versus the Index's +2.96%.
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19 May 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 | Glenmore noted the common theme in April across the vast majority of stocks in the Fund was a recovery from oversold positions at the end of March. While COVID-19 will clearly have had a very significant economic impact, Glenmore believe there are some early signs the business world can navigate this crisis. Following the bounce in stocks in April, the manager now sees earnings risks as more appropriately priced into stocks. Positive contributors in April included People Infrastructure, Dicker Data, Pinnacle Investment Management, Magellan Financial Group, NRW Holdings, Arena REIT, Integral Diagnostics and Charter Hall Social Infrastructure. There were no detractors of any materiality in the month. |
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Performance Report: Loftus Peak Global Disruption Fund
19 May 2020 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +7.00% in April, outperforming AFM's Global Equity Index by +2.85% and taking annualised performance since inception in November 2016 to +22.73% versus the Index's +12.25%.
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19 May 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 | In their latest report, Loftus Peak highlight the acceleration of the move towards digitisation seen over the past three months as a result of the COVID-19 pandemic. They noted that, while this has been in train for twenty years, the virus has forced significant additional adoption of digital tools to facilitate work, banking, shopping and entertainment. They expect a good number of these practices to stick post-pandemic. This in turn has driven very strong growth in revenues for a number of Loftus Peak's well-placed investee companies. Top contributors in April included Roku, Amazon and Qualcomm. Key detractors included BlackBerry, Alibaba and Baidu. The Australian dollar appreciated +7.0% over the month against the US dollar which decreased the value of the Fund's US dollar positions. As at 30 April 2020, the Fund carried a foreign currency exposure of 95%. The Fund ended the month 91% invested in 24 holdings with the balance in cash. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
18 May 2020 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +12.04% in April, outperforming the ASX200 Accumulation Index by +3.26%. Since inception in February 2009, the Fund has returned +15.03% p.a. versus the Index's +8.74%.
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18 May 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 April, the portfolio's weightings had been increased in the Discretionary, Materials, Industrials, REIT's and Financials sectors, and decreased in the Health Care and Consumer Staples sectors. The Fund's aim is 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 collectively indicate that the Fund is in line with its investment objectives. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
14 May 2020 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +0.63% in April, with the portfolio lagging the market due to a conservative net long position. The Fund has returned +8.58% p.a. with an annualised volatility of 7.20% since inception in...
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14 May 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 in April included JB Hi-Fi, Polynovo, Fortescue, BHP and Macquarie. Key detractors included Fisher & Paykel, Scentre, ARB Corp and Bingo. The Fund's Short Book detracted -335 basis points from performance. The Fund's net equity market exposure was increased from 28.4% to 43.3% (45.8% long and 2.5% short), with the key changes being the addition of 13 new long positions including Santos, Pointsbet, Seek, Nanosonic and Altium, and the closure of several individual stock shorts and Kardinia's short position in Share Price Index futures. The Fund's net market exposure has average 40% since inception. Kardinia noted they are close to that level given their cautious view on the direction of the market over the next 12 months. Their view is that, for now, liquidity is overwhelming earnings. |
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Performance Report: Cyan C3G Fund
13 May 2020 - Australian Fund Monitors
The Cyan C3G Fund rose +9.00% in April, taking annualised performance since inception in August 2014 to +11.53% versus the ASX200 Accumulation Index's +4.13%. Cyan expect the current volatility to continue for the foreseeable future as...
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13 May 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 | The Fund was particularly active in February and March as the spread and impact of the virus emerged. During that period Cyan repositioned the portfolio to both avoid significant losses and take advantage of the buying opportunity. Top performers in April included Vita Group, Carbonxt Group, Raiz, Quickfee and Jumbo Interactive. Only 3 positions delivered a minor negative return with none of them being material detractors to performance. Cyan believe the fund is well diversified and exposed to fundamentally strong businesses that offer material upside over time. |
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Performance Report: Bennelong Long Short Equity Fund
12 May 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund rose +1.27% in April, taking 12-month performance to +25.55% versus the ASX200 Accumulation Index's -9.06%. Since inception in February 2002, the Fund has returned +15.49% p.a. versus the Index's +7.14%.
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12 May 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 | Contribution from the top and bottom pairs was equal with overall positive performance an outcome of two thirds of portfolio pairs being profitable. The Fund's top pair was long WOW / short MTS, TWE. Metcash was the key contributor following a capital raising and a somewhat soft trading update. Long ORG / short AGL bounced following a weak prior month for the pair which reflected Origin's oil exposure through APLNG. The weakest pair was long MQG / short BEN, APT. Macquarie bounced along with the market but was more than offset by Afterpay which released a trading update which indicated that thus far they have not been negatively impacted by the current environment. Long LNK / short CPU was the next worst pair. Computershare downgraded guidance again, however, this time the outcome was no as weak as feared, and the stock bounced following an extended period of weakness. |
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Performance Report: Surrey Australian Equities Fund
7 May 2020 - Australian Fund Monitors
The Surrey Australian Equities Fund rose +16.9% in April, outperforming the ASX200 Accumulation Index by +8.12% as many of the Fund's companies recovered from the oversold levels seen during March.
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7 May 2020 - Performance Report: Surrey Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Investment Manager follows a defined investment process which is underpinned by detailed bottom up fundamental analysis, overlayed with sectoral and macroeconomic research. This is combined with an extensive company visitation program where we endeavour to meet with company management and with other stakeholders such as suppliers, customers and industry bodies to improve our information set. Surrey Asset Management defines its investment process as Qualitative, Quantitative and Value Latencies (QQV). In essence, the Investment Manager thoroughly researches an investment's qualitative and quantitative characteristics in an attempt to find value latencies not yet reflected in the share price and then clearly defines a roadmap to realisation of those latencies. Developing this roadmap is a key step in the investment process. By articulating a clear pathway as to how and when an investment can realise what the Investment Manager sees as latent value, defines the investment proposition and lessens the impact of cognitive dissonance. This is undertaken with a philosophical underpinning of fact-based investing, transparency, authenticity and accountability. |
| Manager Comments | During the month Surrey were in active contact with in excess of 70 companies as they updated their existing holdings, searched for new ideas and analysed how various industries were tracking. The Fund's top holdings as at the end of April included Appen (APX), Omni Bridgeway (OBL), Opticom (OPC), Saracen Minerals (SAR) and Xero Limited (XRO). By sector, the Fund was most heavily weighted towards the Industrials and IT sectors. The Fund holdings remain in high quality companies with strong balance sheets and solid outlooks that Surrey believe will continue to outperform over time. |
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