NEWS
Performance Report: Paragon Australian Long Short Fund
6 Sep 2019 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +2.6% in August, outperforming the ASX200 Accumulation Index by +4.96% and taking annualised performance since inception in March 2013 to +11.16% versus the Index's +8.69%.
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6 Sep 2019 - 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 | Positive contributors included the Fund's gold holdings, iSignthis (upgrade), Pilbara (downgrade; short), Jumbo (upgrade) and Mincor, partially offset by a decline in Champion Iron. Overall, the Fund had a solid August reporting season. Paragon noted that whilst they remain confident in the Fund's positioning and performance through this cycle, they will continue to watch macro-economic developments closely, and remain active, making any necessary adjustments to the portfolio accordingly. |
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Performance Report: Spectrum Strategic Income Fund
6 Sep 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund rose +0.71% in July, taking annualised performance since inception to +8.02%.
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6 Sep 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund's top 10 holdings at the end of the month were National Australia Bank (6.4% of the portfolio), DBS Group Holdings (5.7%), AAI Limited (4.9%), Suncorp Metway (4.3%), Toyota Finance Australia (4.2%), Multiplex Sites Trust (3.6%), UBS AG Australian (3.6%), Shinhan Bank (3.2%) and United Overseas Bank (2.8%). The Fund held 11.2% of the portfolio in cash. Spectrum's view is that trade tensions are shaping the future direction of rates in the near term which they believe is evident in the RBA's recent rate cut and their commentary about the next possible cut. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
30 Aug 2019 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund has returned +5.50% over the past 12 months and +4.19% per annum since inception in December 2010. Gyrostat anticipate increasing levels of 'late cycle' market volatility.
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30 Aug 2019 - Performance Report: Gyrostat Absolute Return Income Equity Fund
By: Australian Fund Monitors
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| Fund Overview | Our objective is to deliver regular and stable income stream (from ASX20 dividends) in a low interest rate environment with capital security - an 'alternative - defensive' asset class. Fund features: - holds a diversified portfolio of higher yielding ASX20 stocks. - has the lowest cost protection, always in place, at the stock specific level, with upside. - delivers regular equity income by passing through dividends. 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, short term bond returns in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.8% 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 Fund is a solution for falling interest rates. It has a 'conservative' asset allocation and has for 34 consecutive quarters since inception operated within a 'hard' defined risk parameter (no quarterly NAV draw-downs exceeding 3%), delivered regular equity income (by passing through ASX20 dividends), and returns increasing with volatility levels (includes a tail hedge for large gains on large market falls.) As at the 15th of August, the Fund had increased +4.6%. |
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Performance Report: 4D Global Infrastructure Fund
30 Aug 2019 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +0.87% in July, taking annualised performance since inception in March 2016 to +14.29% with an annualised volatility of 9.26%.
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30 Aug 2019 - 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 portfolio performer for July was Brazilian toll road operator Ecorodovias which was up +9.5%. 4D noted this was note driven by stock specific news but rather the entire Brazilian infrastructure space was up as Bolsonaro executes on reforms. The weakest performer was US midstream operator Williams, down -12.1% on the back of concerns that key counterparties are cutting production targets which will flow through to Williams' volumes and earnings. 4D believe the sell-off was overdone. Despite a slowing global macro environment, 4D's view is that it remains supportive of the Fund's overweight to user pay assets. However, ongoing geopolitical issues see them avoiding certain markets until issues are resolved (e.g. Brexit). They are also seeing certain markets move ahead of fundamentals and have taken a more defensive stance in these regions, increasing their exposure to defensive yield stories. |
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Performance Report: Insync Global Capital Aware Fund
29 Aug 2019 - Australian Fund Monitors
The Insync Global Capital Aware Fund rose +4.07% in July, outperforming AFM's Global Equity Index by +1.20%. Over the past 12 months the Fund has returned +20.99% versus the Index's +11.87%.
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29 Aug 2019 - 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 strong stock selection was the key driver of the solid outperformance. Positive highlights during the month include London Stock Exchange, Intuit, Accenture, Apple and Visa. Detractors were Bristol-Myer Squibb, Heineken, Wirecard, TE Connectivity and PayPal. No currency hedging continues across both funds as Insync consider the main risks to the Australian dollar to be on the downside. Insync's view is that current market conditions continue to reflect the trend in place since the GFC of low growth and low inflation. They believe that if this trend continues then investing in a portfolio of high ROIC stocks benefitting from global megatrends should prevail. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
28 Aug 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +3.41% in July, outperforming the ASX200 Accumulation Index by +0.47%. Since inception in February 2009, the Fund has returned +16.41% p.a. versus the Index's annualised return of +11.26%.
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28 Aug 2019 - 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 July, the Fund's weightings had been increased in the Health Care, IT, Industrials, Communication, Materials and Financials sectors, and decreased in the Discretionary, REIT's and Consumer Staples sectors. Top holdings included CSL, BHP Billiton and Aristocrat Leisure. The Fund aims to invest in a concentrated portfolio of high quality companies with strong growth outlooks and underestimated earnings momentum and prospects. By comparison with the 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. This highlights that the Fund is in line with its investment objectives. |
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Performance Report: Quay Global Real Estate Fund
27 Aug 2019 - Australian Fund Monitors
The Quay Global Real Estate Fund returned +1.6% in July, driven in part by currency returns of +1.0%. Since inception in January 2016, the Fund has returned +10.60% per annum.
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27 Aug 2019 - 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 | Quay noted the Fund's Hong Kong names have been buffeted by poor sentiment as a result of ratcheting trade wars and increasing protests in HK. They also added a new investee to the portfolio, American Homes for Rent (AMH), which is in the US single family sector. AMH owns a portfolio of 53,000 houses across the US that it rents to people seeking rental accommodation. |
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Fund Review: Insync Global Capital Aware Fund July 2019
27 Aug 2019 - Australian Fund Monitors
Latest Fund Review on Insync Global Capital Aware Fund is now available. The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend...
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27 Aug 2019 - Fund Review: Insync Global Capital Aware Fund July 2019
By: Australian Fund Monitors
AFM Fund Review - July 2019 (pdf format)
INSYNC GLOBAL CAPITAL AWARE FUND
Attached is our most recently updated Fund Review on the Insync Global Capital Aware Fund.
We would like to highlight the following:
- The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend growth and downside protection.
- Portfolio selection is driven by a core strategy of investing in companies with sustainable growth in dividends, high returns on capital, positive free cash flows and strong balance sheets.
- Emphasis on limiting downside risk is through extensive company research, the ability to hold cash and long protective index put options.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - July 2019 (pdf format)
Performance Report: Bennelong Emerging Companies Fund
23 Aug 2019 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +9.58% in July, outperforming the ASX200 Accumulation Index by +6.64% and taking annualised performance since inception in November 2017 to +33.03% versus the Index's +13.04%.
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23 Aug 2019 - 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 | The Fund's top five holdings as at the end of July included Eml Payments, Viva Leisure, Jumbo Interactive, BWX and Prospa. The Fund invests predominantly in micro and small-cap stocks listed on the ASX. It is managed via a research-intensive and predominantly bottom-up investment approach. The Fund focuses on high quality stocks an seeks to avoid the higher risk that usually comes with micro and small-cap stocks. |
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Performance Report: Loftus Peak Global Disruption Fund
23 Aug 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +3.16% in July, outperforming AFM's Global Equity Index by +0.29% and taking annualised performance since inception in November 2016 to +22.58% versus the Index's +16.14%.
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23 Aug 2019 - 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 | Loftus Peak noted that while trade uncertainty has weighed on company earnings and market expectations, some of the Fund's positions still managed to deliver. Top contributors in July included Google, Apple and Tencent. Key detractors included Baidu, Qualcomm and Netflix. The Australian dollar depreciated -1.8% over the month against the US dollar, which meant the value of the Fund's US dollar positions increased. As at 31 July 2019, the Fund carried a foreign currency exposure of 99%. |
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