NEWS
Performance Report: Loftus Peak Global Disruption Fund
26 Apr 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +3.02% in March, outperforming AFM's Global Equity Index by +1.79% and taking annualised performance since inception in Nov 2016 to +22.86% versus the Index's +14.97%.
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26 Apr 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 | Over the quarter the Fund has returned +18.62%, beating the Index by +7.12%. Loftus Peak noted performance was supported by deploying cash towards companies that were trading at the lower end of their valuation range in the December quarter and taking profits as markets found their strength in the March quarter. Top contributors included Apple, Nvidia and Qualcomm. Detractors included Autodesk, Anritsu and Tesla. The Australian dollar depreciated -0.15% over the month against the US dollar, which meant the value of the Fund's US dollar positions increased. As at 31 March 2019, the Fund carried a foreign currency exposure of 99%. The Fund is 82% invested in 20 holdings with the balance in cash. |
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Performance Report: DS Capital Growth Fund
26 Apr 2019 - Australian Fund Monitors
The DS Capital Growth Fund rose +1.02% in March, taking annualised performance since inception in Jan 2013 to +14.33% versus the ASX200's +9.83%.
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26 Apr 2019 - 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 portfolio performed reasonably well over the quarter, with strong results from several holdings including Breville and Lifestyle Communities. Softer than expected results came from McMillan Shakespeare, Experience Co and Challenger. DS Capital believe softer global economic growth will maintain pressure on global interest rates that have fallen from the multi-year highs of October 2018 deferring a return to higher rates that seemed likely just six months ago. They noted that, while lower interest rates are theoretically favourable for equity markets, weaker economic conditions can make it more difficult for businesses to grow earnings. Post reporting season company meetings, DS Capital have compiled a list of businesses that they would like to own or add to their current holding. They're seeing new opportunities, however, they are looking to deploy their cash (20% of the portfolio) sparingly. |
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Performance Report: KIS Asia Long Short Fund
24 Apr 2019 - Australian Fund Monitors
The KIS Asia Long Short Fund has returned +11.92% p.a. with an annualised volatility of 5.17% since inception in October 2009 versus the ASX200's return of +7.45% p.a. with an annualised volatility of 11.57% over the same period.
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24 Apr 2019 - Performance Report: KIS Asia Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Whilst the Fund's primary strategy is focused on long/short equities, the ability to retain discretionary powers to allocate across a number of other investment strategies is reserved. These strategies may include, but not be limited to: convertible bond investments, portfolio hedging, equity related arbitrage, special situations (e.g. merger arbitrage, rights offerings, participation in international public offerings and placements, etc.). The Fund's geographic focus is Asia excluding Japan, but including Australia). The Fund may invest outside of this region to the extent that: 1. The investment decision is driven from the Asian region or; 2. The exposure is intended to mitigate risk or enhance return from factors external to the Asian region. |
| Manager Comments | In March the Fund returned -1.53%. Top contributors included a long position in Avita Medical Ltd (+164bp profit) and a long position in Elixinol Global Ltd (+32bp profit). The largest detractor was a long position in GCL Poly/3800.HK (-39bp contribution). During the month KIS travelled to China and met with several Chinese company management teams. They believe sentiment has clearly improved from only 3 months ago. In their view, management across industries were optimistic and much less concerned about the trade war. In addition, they noted the Chinese Communist Party's targeted stimulus has also driven sentiment higher. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
24 Apr 2019 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +0.64% in March, taking annualised performance since inception in November 2009 to +9.74%.
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24 Apr 2019 - Performance Report: Bennelong Twenty20 Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed as one portfolio but comprises and combines two separately managed exposures: 1. An investment in the top 20 stocks of the markets, which the Fund achieves by taking an indexed position in the S&P/ASX 20 Index; and 2. An investment in the stocks beyond the S&P/ASX 20 Index. This exposure is managed on an active basis using a fundamental core approach. The Fund may also invest in securities expected to be listed on the ASX, securities listed or expected to be listed on other exchanges where such securities relate to ASX-listed securities.Derivative instruments may be used to replicate underlying positions and hedge market and company specific risks. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Accumulation Index. The Fund typically holds between 40-55 stocks and thus is considered to be highly concentrated. This means that investors should expect to see high short-term volatility. The Fund seeks to achieve growth over the long-term, therefore the minimum suggested investment timeframe is 5 years. |
| Manager Comments | Top contributors over the March quarter included Goodman Group, IDP Education and Breville. Key detractors were Reliance Worldwide, Costa Group and Resmed. Bennelong noted these are all global businesses operating across a range of different industries that again reported very strong financial results. In Bennelong's view, investor sentiment still remains cautious despite the strong recovery over the past quarter. They believe the consensus outlook remains weak, particularly with respect to domestically focused stocks and the broader domestic economy. However, they noted that investors are incrementally paying more attention to fundamental drivers like earnings and growth which expect will benefit the portfolio. |
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Performance Report: 4D Global Infrastructure Fund
23 Apr 2019 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +2.07% in March, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +1.83% and taking annualised performance since inception in March 2016 to +13%.
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23 Apr 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 was European tower operator Cellnex (+22.2%), rallying strongly post a successful capital raise which paves the way for Cellnex's participation in any tower sector M&A across Europe. The weakest performer was Brazilian toll road operator CCR (-17.5%) which 4D believe can be attributed to further press reports of penalties to be paid in the state of Parana, as well as some profit-taking after a very strong price appreciation. They noted that, despite a slowing global macro environment, it remains in positive territory and supportive of the Fund's bias towards user pay assets which have a direct correlation to macro. 4D also believe with Fed rate hikes stalled, emerging markets should see a recovery. However, they remain cautious of ongoing geo-political issues and have positioned accordingly. |
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Performance Report: Bennelong Australian Equities Fund
18 Apr 2019 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +1.32% in March, outperforming the ASX200 Accumulation Index by +0.59% and taking annualised performance since inception in January 2009 to +13.33%.
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18 Apr 2019 - 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 | Over the March quarter the largest positive contributors were IDP Education, Rio Tinto, Breville and Goodman Group. Key detractors included Costa Group and Reliance Worldwide. Bennelong's view is that investor sentiment still remains cautious despite the strong recovery over the past quarter. They observe that investors are still very much attracted to what is perceived to be safe, as evidenced by the recent outperformance of bonds, gold stocks, REITs, infrastructure and comfort stocks like Woolworths. However, they believe investors are incrementally paying more attention to fundamental drivers like earnings and growth which they expect will be supportive of returns. |
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Performance Report: Glenmore Australian Equities Fund
16 Apr 2019 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +2.72% in March, outperforming the ASX200 Accumulation Index by +1.99% and taking annualised performance since inception in June 2017 to +24.98%.
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16 Apr 2019 - 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 March was a much quieter month in terms of news flows following reporting season in February. Most of the stock price moves were not announcement related but rather driven by investors fully digesting the results and outlooks of the companies that reported in February. Top contributors included Jumbo Interactive (+24.6%), Dicker Data (+23.1%), Charter Hall Group (+16.7%), Bravura Solutions (+7.9%), Arena REIT (+7.8%), Auckland International Airport (+6.4%) and Pinnacle Investment Management (+5.1%). Detractors included Fiducian Group (-5.0%), Worley Parsons (-5.0%) and Stanmore Coal (-3.3%) despite no actual news flow released for these companies during the month. Whilst the rally in equities has clearly seen valuations become more expensive (albeit from oversold levels in late 2018), Glenmore believe equities are likely to be supported given the outlook is for a combination of softening economic growth and benign monetary policy. They see that economic conditions are sufficiently healthy to allow companies to execute on their growth strategies. Overall, Glenmore emphasised that they are long term investors and remain very comfortable with the earnings outlooks for all of their investments. |
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Performance Report: Spectrum Strategic Income Fund
15 Apr 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund rose +0.74% in March, taking annualised performance since inception in June 2009 to +8.07% with an annualised volatility of 3.07%.
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15 Apr 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | Spectrum continue to tweak the portfolio to take advantage of expected falling A$ credit spreads while maintaining an average credit rating of 'A-'. In their view, a jump in perceived global geopolitical risk is a key risk as they believe the market remains complacent on this matter at present. They also continue to shelter the portfolio from potential fallout from further declines in the local residential property market by diversifying away from direct and indirect exposure to that sector. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
15 Apr 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +0.46% in March, taking annualised performance since inception in May 2006 to +9.20% versus the ASX200 Accumulation Index's +5.84%.
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15 Apr 2019 - 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 March included Charter Hall (+25bp contribution), Atlas Arteria (+11bp), Goodman Group (+9bp), Rio Tinto (+24bp) and Audinate (+24bp). The short book made a positive contribution of +15bp, benefiting from shorts in financials and Share Price Index Futures. Detractors included ANZ (-25bp contribution), CBA (-19bp), IMF Bentham (-11bp), Woodside Petroleum (-9bp), WorleyParsons (-8bp), Northern Star (-9bp) and Whitehaven Coal (-8bp). Net equity market exposure was reduced from 42.6% to 38.9% (54.5% long and 15.6% short), with the key changes being new positions in Atlas Arteria, APA Group, Bluescope Steel, Charter Hall and Chorus, the sale of ANZ, Computershare, Orora and Whitehaven Coal as well as some new short positions. |
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Fund Review: Bennelong Long Short Equity Fund March 2019
12 Apr 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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12 Apr 2019 - Fund Review: Bennelong Long Short Equity Fund March 2019
By: Australian Fund Monitors
AFM Fund Review - March 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 14.98%.
- 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 1.44 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - March 2019 (pdf format)
