NEWS
29 Sep 2022 - Are we there yet? (Whitepaper)
28 Sep 2022 - Performance Report: PURE Resources Fund
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| Manager Comments | The PURE Resources Fund has a track record of 1 year and 4 months and therefore comparison over all market conditions and against its peers is limited. However, the fund has outperformed the ASX 200 Total Return Index since inception in May 2021, providing investors with an annualised return of 14.28% compared with the index's return of 3.53% over the same period. Over the past 12 months, the fund's largest drawdown was -2.3% vs the index's -11.9%, and since inception in May 2021 the fund's largest drawdown was -2.3% vs the index's maximum drawdown over the same period of -11.9%. The fund's maximum drawdown began in June 2022 and has lasted 2 months, reaching its lowest point during June 2022. The Manager has delivered these returns with 7.23% less volatility than the index, contributing to a Sharpe ratio for performance over the past 12 months of 2.69 and for performance since inception of 2.17. The fund has provided positive monthly returns 78% of the time in rising markets and 71% of the time during periods of market decline, contributing to an up-capture ratio since inception of 39% and a down-capture ratio of -36%. |
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28 Sep 2022 - Performance Report: Bennelong Long Short Equity Fund
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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 | The Bennelong Long Short Equity Fund has a track record of 20 years and 7 months and has outperformed the ASX 200 Total Return Index since inception in February 2002, providing investors with an annualised return of 12.86% compared with the index's return of 7.94% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 3 occasions in the 20 years and 7 months since its inception. Over the past 12 months, the fund's largest drawdown was -19.27% vs the index's -11.9%, and since inception in February 2002 the fund's largest drawdown was -30.59% vs the index's maximum drawdown over the same period of -47.19%. The fund's maximum drawdown began in September 2020 and has lasted 1 year and 11 months, reaching its lowest point during June 2022. During this period, the index's maximum drawdown was -15.05%. The Manager has delivered these returns with 0.34% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.75 since inception. The fund has provided positive monthly returns 64% of the time in rising markets and 60% of the time during periods of market decline, contributing to an up-capture ratio since inception of 5% and a down-capture ratio of -121%. |
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28 Sep 2022 - 10k Words
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10k Words Equitable Investors September 2022 Earnings season on the ASX has come to a close with a historically low number of downgrades on the FY22 numbers, as tracked by Wilsons, but more downgrades than upgrades to EPS and dividend guidance for FY23, based on Evans & Partners' numbers. The one year return on Bloomberg's benchmark for the bond market is down 19% over the past 12 months. While the Australian yield curve is sloping upwards, the US yield curve is currently inverted. An inverted yield curve has historically led to some type of "break" in the system, @Marlin_Capital warns. But the inflation data is potentially turning - Yardeni highlights plunging US gasoline prices. Given the European situation, nuclear power and uranium are seeing a revival of sorts, at least with Japan revisiting its stance. Uranium equities have been advancing and the Washington Post ran a Blooomberg piece highlighting the unsavoury sources of current uranium supply. Taking a look at equities, Bespoke's optimistic take on the June half-year's poor showing is that such a poor first six months is typically followed by 12 months of 20%+ returns for the S&P 500. We thought it was interesting how closely the Grayscale Ethereum Trust has traded in comparison with the ARK Innovation ETF - a speculative cryptocurrency vehicle alongside a high growth tech investment vehicle. And potentially adding some colour to that is Visual Capitalist's charting of the demise of long-term investing. Aggregate ASX earnings downgrades announced over course of 12 month reporrting cycle
Source: Wilsons Net guidance upgrades for FY23f for the S&P/ASX 200
Source: Evans & Partners Bloomberg Global-Aggregate Total Return Index Value Unhedged USD
Source: RBA Australian and US yield curves
Source: worldgovernmentbonds.com An inverted yield curve has historically led to some type of "break" in the system Source: @Marlin_Capital, Federal Reserve of St Louis US gasoline priced have plummeted as consumption is reduced relative to a year earlier Source: Yardeni Research North American uranium ETFs on the rise (URA, URNM, U.U)
Source: TIKR, Equitable Investors Authoritarian nations dominate the world's uranium production
S&P 500 has been up at least 22% in the year following prior 20%+ two-quarter drops
Source: Bespoke Grayscale Ethereum Trust (orange) and ARK Innovation (green) moving together
Source: TIKR, Equitable Investors The average holding period of shares on the NYSE has fallen to new lows
Source: Visual Capitalist September Edition Funds operated by this manager: Equitable Investors Dragonfly Fund Disclaimer Nothing in this blog constitutes investment advice - or advice in any other field. Neither the information, commentary or any opinion contained in this blog constitutes a solicitation or offer by Equitable Investors Pty Ltd (Equitable Investors) or its affiliates to buy or sell any securities or other financial instruments. Nor shall any such security be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction. The content of this blog should not be relied upon in making investment decisions. Any decisions based on information contained on this blog are the sole responsibility of the visitor. In exchange for using this blog, the visitor agree to indemnify Equitable Investors and hold Equitable Investors, its officers, directors, employees, affiliates, agents, licensors and suppliers harmless against any and all claims, losses, liability, costs and expenses (including but not limited to legal fees) arising from your use of this blog, from your violation of these Terms or from any decisions that the visitor makes based on such information. This blog is for information purposes only and is not intended to be relied upon as a forecast, research or investment advice. The information on this blog does not constitute a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Although this material is based upon information that Equitable Investors considers reliable and endeavours to keep current, Equitable Investors does not assure that this material is accurate, current or complete, and it should not be relied upon as such. Any opinions expressed on this blog may change as subsequent conditions vary. Equitable Investors does not warrant, either expressly or implied, the accuracy or completeness of the information, text, graphics, links or other items contained on this blog and does not warrant that the functions contained in this blog will be uninterrupted or error-free, that defects will be corrected, or that the blog will be free of viruses or other harmful components. Equitable Investors expressly disclaims all liability for errors and omissions in the materials on this blog and for the use or interpretation by others of information contained on the blog |
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27 Sep 2022 - Performance Report: PURE Income and Growth Fund
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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 | The PURE Income and Growth Fund has a track record of 3 years and 9 months and therefore comparison over all market conditions and against its peers is limited. However, the fund has outperformed the ASX 200 Total Return Index since inception in December 2018, providing investors with an annualised return of 15.36% compared with the index's return of 9.63% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 3 years and 9 months since its inception. Over the past 12 months, the fund's largest drawdown was -3.58% vs the index's -11.9%, and since inception in December 2018 the fund's largest drawdown was -5.86% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in February 2020 and lasted 3 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by May 2020. The Manager has delivered these returns with 4.22% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 two times over the past three years and which currently sits at 1.14 since inception. The fund has provided positive monthly returns 71% of the time in rising markets and 43% of the time during periods of market decline, contributing to an up-capture ratio since inception of 45% and a down-capture ratio of 2%. |
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27 Sep 2022 - Performance Report: Delft Partners Global High Conviction Strategy
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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 Delft Partners Global High Conviction Strategy has a track record of 11 years and 1 month and has outperformed the Global Equity Index since inception in August 2011, providing investors with an annualised return of 14.1% compared with the index's return of 12.56% over the same period. On a calendar year basis, the strategy has experienced a negative annual return on 2 occasions in the 11 years and 1 month since its inception. Over the past 12 months, the strategy's largest drawdown was -8.81% vs the index's -15.77%, and since inception in August 2011 the strategy's largest drawdown was -13.33% vs the index's maximum drawdown over the same period of -15.77%. The strategy's maximum drawdown began in February 2020 and lasted 1 year, reaching its lowest point during July 2020. The strategy had completely recovered its losses by February 2021. During this period, the index's maximum drawdown was -13.19%. The Manager has delivered these returns with 1.1% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past five years and which currently sits at 1.05 since inception. The strategy has provided positive monthly returns 88% of the time in rising markets and 14% of the time during periods of market decline, contributing to an up-capture ratio since inception of 96% and a down-capture ratio of 90%. |
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27 Sep 2022 - Performance Report: ASCF High Yield Fund
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| Fund Overview | Does not require full valuations on loans <65% LVR. Borrowing rates are from 12% per annum on 1st mortgage loans and 16% per annum on 2nd mortgage/caveat loans. Pays investors between 5.55% - 6.25% per annum depending on their investment term. |
| Manager Comments | The ASCF High Yield Fund has a track record of 5 years and 6 months and has outperformed the Bloomberg AusBond Composite 0+ Yr Index since inception in March 2017, providing investors with an annualised return of 8.53% compared with the index's return of 1.19% over the same period. On a calendar year basis, the fund hasn't experienced any negative annual returns in the 5 years and 6 months since its inception. Over the past 12 months, the fund hasn't had any negative monthly returns and therefore hasn't experienced a drawdown. Over the same period, the index's largest drawdown was -10.78%. Since inception in March 2017, the fund's largest drawdown was 0% vs the index's maximum drawdown over the same period of -12.4%. The Manager has delivered these returns with 4.08% less volatility than the index, contributing to a Sharpe ratio which has consistently remained above 1 over the past five years and which currently sits at 21.32 since inception. The fund has provided positive monthly returns 100% of the time in rising markets and 100% of the time during periods of market decline, contributing to an up-capture ratio since inception of 79% and a down-capture ratio of -74%. |
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27 Sep 2022 - Performance Report: Bennelong Kardinia Absolute Return Fund
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| Fund Overview | There is a slight bias to large cap stocks on the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. 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. |
| Manager Comments | The Bennelong Kardinia Absolute Return Fund has a track record of 16 years and 4 months and has outperformed the ASX 200 Total Return Index since inception in May 2006, providing investors with an annualised return of 7.61% compared with the index's return of 6.16% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 2 occasions in the 16 years and 4 months since its inception. Over the past 12 months, the fund's largest drawdown was -10.52% vs the index's -11.9%, and since inception in May 2006 the fund's largest drawdown was -11.71% vs the index's maximum drawdown over the same period of -47.19%. The fund's maximum drawdown began in June 2018 and lasted 2 years and 6 months, reaching its lowest point during December 2018. The fund had completely recovered its losses by December 2020. During this period, the index's maximum drawdown was -26.75%. The Manager has delivered these returns with 6.6% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.63 since inception. The fund has provided positive monthly returns 87% of the time in rising markets and 32% of the time during periods of market decline, contributing to an up-capture ratio since inception of 15% and a down-capture ratio of 55%. |
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27 Sep 2022 - Webinar Replay: Catalyst Fund
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L1 Capital Webinar Replay: Catalyst Fund L1 Capital September 2022 WEBINAR REPLAY | L1 Capital Catalyst Fund | September 15, 2022
Speaker: James Hawkins, Partner & Head of L1 Capital's Catalyst Fund Time Stamps: • 0.44 Fund overview • 2.50 Reflections from the first year • 4.49 Activist market observations • 13.17 Questions from investors |
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Funds operated by this manager: L1 Capital Long Short Fund (Monthly Class), L1 Capital International Fund, L1 Capital Long Short Fund (Daily Class), L1 Long Short Fund Limited (ASX: LSF), L1 Capital Catalyst Fund, L1 Capital Global Opportunities Fund |
