NEWS
Performance Report: Harvest Lane Asset Management Absolute Return Fund
6 Nov 2019 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund returned +1.10% in September, taking annualised performance since inception in July 2013 to +8.43% with an annualised volatility of 6.84%. By contrast, the ASX200 Accumulation Index has returned...
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6 Nov 2019 - 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 returned +1.10% in September, taking annualised performance since inception in July 2013 to +8.43% with an annualised volatility of 6.84%. By contrast, the ASX200 Accumulation Index has returned +10.22% p.a. with an annualised volatility of 10.69% over the same period. The Fund's Sortino ratio of 1.61 vs the Index's 1.16, average negative return of -1.40% vs the Index's -2.45% and down-capture ratio of -34.29% highlight the Fund's capacity to protect investor capital in falling markets. Harvest Lane noted September was an eventful month which saw further exciting opportunities emerge for the Fund. The Fund finished the month almost fully invested. Several full-sized positions in late stage transactions are due to complete throughout October and early November, which should see a significant percentage of the Fund converted back to cash. Two deals in Ruralco Limited and Kidman Resources completed as expected, with cash proceeds recycled straight back into other opportunities, however, Harvest Lane were slightly disappointed Kidman Resources failed to attract a competing proposal. Read the fund's latest report for more in its activities throughout September. Harvest Lane were pleased with the Fund's performance during September and maintain an optimistic outlook. |
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Performance Report: Bennelong Emerging Companies Fund
6 Nov 2019 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +9.92% in September, outperforming the ASX200 Accumulation Index by +8.08% and taking annualised performance since inception in November 2017 to +41.09% vs the Index's +11.51%.
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6 Nov 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 | Over the September quarter the Fund returned +30.60%. Top contributors included Viva Leisure, BWX, Sezzle, EML Payments and Prospa. Bennelong believe the current IPO markets is rich in opportunities and as such they have committed to adding a number of new ones to the portfolio in coming months. They noted the August reporting season was positive for the Fund, with holdings generally reporting strong financial results in line with Bennelong's expectations. |
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Performance Report: Wheelhouse Global Equity Income Fund
6 Nov 2019 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund returned +0.71% in September, taking annualised performance since inception in May 2017 to +9.61% with an annualised volatility of 7.41%.
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6 Nov 2019 - Performance Report: Wheelhouse Global Equity Income Fund
By: Australian Fund Monitors
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| Fund Overview | To pursue this objective, the Investment Manager is responsible for actively managing, monitoring and tailoring the integration of derivative contracts alongside the Morningstar Portfolio, while taking into account changing market and stock specific conditions. The Investment Manager is responsible for maximising the structural benefits of short option positions (lowered Volatility, improved capital preservation, higher income generation), whilst mitigating, minimising and monitoring the structural negatives (variable market exposure, option expiries, collateral management and asymmetric return profiles). In addition, long derivatives positions are also used to enhance the capital preservation characteristics of the Fund in more extreme market movements. As a consequence of the integration of Derivatives, returns of the strategy, intra-cycle, are expected to vary from the underlying Morningstar Portfolio due to these characteristics. For example in weak markets, or in extended sideways markets, the Fund is expected to outperform relative to the Morningstar Portfolio. Conversely in strong positive markets the Fund is expected to underperform. |
| Manager Comments | The Fund returned +5.0% during the quarter versus AFM's Global Equity Index's +4.03%. Top contributors included Emerson Electric, Guidewire Software, KLA Corp, Safran and Sanofi. Detractors included Canadian Pacific Railway, Amgen, Salesforce.com, Unilever and ServiceNow. Wheelhouse believe the stock market's huge focus on Fed policy, as opposed to fundamental economic activity, can only ever be temporary. They expect that at some point market prices will reflect current economic reality, with prices responding accordingly. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
5 Nov 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +2.30% in September, outperforming the ASX200 Accumulation Index by 0.46% and taking annualised performance since inception in January 2009 to +16.51% versus the Index's +11.01%.
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5 Nov 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 | The Fund returned +7.17% over the quarter versus the Index's +2.37%. Bennelong noted most portfolio holdings announced very strong financial results during reporting season in August. These results were largely in line with the investment team's expectations. Some of the largest contributors included CSL, BWX, Reliance Worldwide and Treasury Wine Estates. The Fund is a concentrated portfolio invested at its core in a selection of high quality growth stocks, however, Bennelong noted they are mindful of macro and other risks and thus construct the portfolio in a way that seeks to manage these risks to the extent the investment team consider appropriate. |
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Performance Report: Insync Global Capital Aware Fund
4 Nov 2019 - Australian Fund Monitors
The Insync Global Capital Aware Fund has returned +11.18% p.a. with an annualised volatility of 9.47% since inception in October 2009. Over the past 12 months, the Fund has returned +15.97% against AFM's Global Equity Index's +8.64%.
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4 Nov 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 | The Fund returned -2.21% in September after the cost of fees and downside protection. Positive contributors included Apple, London Stock Exchange, Adidas and Bristol-Myer Squibb. Detractors included S&P Global, The Walt Disney Co, Visa and Intuit. The Fund continues to have no currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Insync believe current market conditions continue to reflect the trend in place since the GFC of low growth and low inflation. They noted that, if this trend continues over the medium to long-term, they expect their portfolio of high ROIC stocks benefitting from global megatrends should outperform as these companies are less dependent on the global economy to generate consistent profitable growth. |
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Performance Report: Bennelong Long Short Equity Fund
1 Nov 2019 - Australian Fund Monitors
The Bennelong Long Short Equity Fund's performance was flat in September. Since inception in February 2002, the Fund has returned +14.90% p.a. versus the ASX200 Accumulation Index's +8.43%.
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1 Nov 2019 - 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 | The majority of the Fund's pairs contributed positively during the month (17 of 29). The one negative pair of note was long Challenger (CGF) / short AMP & IOOF (IFL), with IFL experiencing a rally after news that the Federal Court ruled in favour of IFL in a case brought by APRA. On the positive side, the Fund had a solid contribution from a telco pair and two energy pairs. In their latest report, Bennelong highlight a chart which caught their attention in September which shows continued increase in debt levels of US corporates. Measured as a share of GDP, this now sits above prior peak levels. They noted they wonder what the end game is for cheap debt, and how much further indebtedness can rise before risk appetite changes. |
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Performance Report: NWQ Fiduciary Fund
1 Nov 2019 - Australian Fund Monitors
The NWQ Fiduciary Fund (Fund) delivered a return of +0.07% in September. Since inception, the Fund has returned 5.52% p.a. with an annualised volatility of 4.85%. By contrast, the ASX200 Accumulation Index has returned +8.76% p.a. with an...
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1 Nov 2019 - 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 between 8% to 11% 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 | NWQ's view is that global markets continue to be caught between the conflicting currents of a global economic slowdown and heightened geopolitical risk on the one hand and central bank policies designed to stimulate growth on the other. They noted the relative calm in equity markets during the month presented the Fund's managers with fewer opportunities than in recent months which was reflected in the Fund's flat performance in September. NWQ are satisfied with the Fund's return of +4.17% over the quarter. |
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Performance Report: Touchstone Index Unaware Fund
29 Oct 2019 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +2.62% in September, outperforming the ASX200 Accumulation Index by +0.78% and taking annualised performance since inception in April 2016 to +11.91% with an annualised volatility of 9.79%.
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29 Oct 2019 - 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 September, the Fund held 21 stocks with a median position size of 4.6%. The portfolio's holdings had an average forward year price/earnings of 16.6, forward year EPS growth of 4.3%, forward year tangible ROE of 21.6% and forward year dividend yield of 4.2%. The Fund's cash weighting was increased to 5.3% from 5.1% as at the end of August. 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: Paragon Australian Long Short Fund
25 Oct 2019 - Australian Fund Monitors
The Paragon Australian Long Short Fund has returned +10.48% p.a. since inception in March 2013. By contrast, the ASX200 Accumulation Index has returned +8.88% p.a. over the same period.
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25 Oct 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 | The Paragon Australian Long Short Fund has returned +10.48% p.a. since inception in March 2013. By contrast, the ASX200 Accumulation Index has returned +8.88% p.a. over the same period. The Fund has a down-capture ratio of performance of 40%, indicating that, on average, the Fund has significantly outperformed in falling markets since inception. The Fund returned -3.1% in September. Positive contributors included Atrum, Jumbo and Nickel Mines. These were offset by declines in iSignthis, Agrimin and the Fund's gold holdings. Paragon noted in the previous bull cycle of 2009 - 2011, gold had ten corrections greater than 5% amid its 167% gain. Their view is that volatility in gold bull cycles is a given and historically being patiently invested has paid very well. During the month Paragon visited Atrum's Elan project in Canada and Adriatic released initial metallurgical resutls, both surprising to the upside and discussed in more depth in the Fund's September report. Paragon noted that whilst they're pleased with Atrum's stock price doubling since initiating their position in February, they believe there remains considerable upside ahead. |
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Fund Review: Bennelong Long Short Equity Fund September 2019
25 Oct 2019 - 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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25 Oct 2019 - Fund Review: Bennelong Long Short Equity Fund September 2019
By: Australian Fund Monitors
AFM Fund Review - September 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 14.90%.
- 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 0.89 and 1.45 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - September 2019 (pdf format)
