NEWS
Performance Report: Bennelong Kardinia Absolute Return Fund
19 Mar 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund returned +1.55% in February, taking annualised performance since inception in May 2006 to +9.22% versus the ASX200 Accumulation Index's +5.82%.
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19 Mar 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 included ANZ (+44bp contribution), Macquarie Group (+34bp), Audinate Group (+31bp), Cleanaway (+29bp), Woodside Petroleum (+25bp) and Rio Tinto (+24bp). The short book was the largest detractor (-128bp), with individual stock shorts in the financial, consumer and healthcare sectors and a short in Share Price Index Futures the key detractors. Other detractors included Emeco (-13bp), Evolution Mining (-11bp), Whitehaven Coal (-8bp) and Computershare (-7bp). Net equity market exposure was increased from 40.2% to 42.6% (52.4% long and 9.8% short), with the key changes being new positions in ANZ, Goodman Group and James Hardie, the closure of several short positions and increased weightings in South32, Aristocrat Leisure, Computershare and Magellan. This was partly offset by the sale of positions in Woolworths, Transurban, BHP, Alumina and Evolution. |
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Performance Report: Loftus Peak Global Disruption Fund
18 Mar 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +6.84% in February, outperforming AFM's Global Equity Index by +1.58% and taking annualised performance since inception in November 2016 to +22.19%.
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18 Mar 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 believe part of the reason for the Fund's strong performance in recent months lies in the decision to significantly increase their stock weighting during the Q4 sell-off on the basis that the global economic recovery was not so well entrenched as to withstand the aggressive rise in interest rates which was mooted by the US Federal Reserve late last year. Xilinx, Alibaba and Nvidia all contributed positively while Amazon, Baidu and Tencent each detracted slightly. Elsewhere, Loftus Peak noted, they remain focused on the development of 5G for cellular telecommunications which they believe will be a game-changer, impacting infrastructure globally and driving a new wave of connectivity and subsequently productivity. The value of the Fund's US dollar positions increased during the month as the AUD depreciated 2.43% against the USD. As at 28 February 2019, the Fund carried a foreign currency exposure of 99%. |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
15 Mar 2019 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund has returned +13.05% over the past 12 months versus the ASX200 Accumulation Index's +7.05%. This return has been achieved with a volatility of only 7.40% versus the Index's 11.59%.
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15 Mar 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 Fund returned 0.81% in February. Harvest Lane noted that, even as many of their positions steadily increase in price as their respective transaction endpoints approach, there remains sufficient implied discount in the portfolio for them to be optimistic about the Fund's performance over the remainder of the year. Overall, February was a relatively quiet month for the Fund. Two larger sized transactions in PropertyLink Group and Greencross Limited were concluded intra-month, allowing Harvest Lane to rotate capital straight back into new opportunities. In total, five new deals passed Harvest Lane's due diligence process, while several more are currently being monitored for inclusion in the portfolio at a later time. |
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Performance Report: Bennelong Long Short Equity Fund
12 Mar 2019 - Australian Fund Monitors
The Bennelong Long Short Equity Fund has returned +15.11% p.a. since inception in January 2003 versus the ASX200 Total Return's +8.05% p.a. over the same period.
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12 Mar 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 Fund's performance was modestly negative in February (-0.82%). Bennelong experienced a mix of winners and losers across the 31 pairs in the portfolio. They noted reporting season led to a slight downgrade to market earnings forecasts with resources positive and industrials negative. They were comfortable with their overall hit rate based on earnings revisions. By sector, the Fund saw positive contributions from Financials and Healthcare, while Mining/Resources and Energy lagged. Top contributors included long Macquarie / short Bendigo Bank and long Ramsay Health Care / short Healius. The worst pairs in the portfolio were long Challenger / short IOOF/ANZ and long Caltex / short Viva Energy. Bennelong noted the long portfolio continues to deliver superior earnings growth and return on equity/capital relative to the short portfolio. |
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Performance Report: Cyan C3G Fund
12 Mar 2019 - Australian Fund Monitors
The Cyan C3G Fund has returned +18.29% since inception in July 2014 versus the ASX200 Accumulation Index's +6.70% over the same period. This return has been achieved with a similar level of volatility to the market.
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12 Mar 2019 - 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 posted a modest gain of 0.6% in February following on from a 4.0% rise in January. 8 out of the Fund's 25 positions moved in excess of 20% during the month. Top contributors included Splitit (+58%), Experience Co (+22%) and Afterpay (+15%). Detractors included Murray River Group (-20%) and Motorcycle Holdings (-28%). Despite regretting not having participated in more of the market's upside in recent months, Cyan maintain that the market was too volatile to have been fully invested at the end of 2018. They noted they've added a couple of new and exciting positions to the portfolio and they feel that positive and unexpected (or undiscovered) company performances will be well-rewarded. |
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Fund Review: Bennelong Long Short Equity Fund February 2019
11 Mar 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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11 Mar 2019 - Fund Review: Bennelong Long Short Equity Fund February 2019
By: Australian Fund Monitors
AFM Fund Review - February 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 15.11%.
- 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 0.90 and 1.45 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - February 2019 (pdf format)
Fund Review: Bennelong Kardinia Absolute Return Fund February 2019
8 Mar 2019 - Australian Fund Monitors
The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund is a long-biased, research driven, active equity long/short strategy which invests in listed ASX companies with track records greater than 10 years.
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8 Mar 2019 - Fund Review: Bennelong Kardinia Absolute Return Fund February 2019
By: Australian Fund Monitors
AFM Fund Review - February 2019 (pdf format)
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.
- The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies with over ten-year track record.
- The Fund has significantly outperformed the ASX200 Accumulation Index since its inception in May 2006 and also has significantly lower risk KPIs. The Fund has an annualised return of 9.22% p.a. with a volatility of 7.12%, compared to the ASX200 Accumulation's return of 5.98% p.a. with a volatility of 13.35%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Mark Burgess and Kristiaan Rehder have significant market experience, while Bennelong Funds Management provide infrastructure, operational, compliance and distribution capabilities.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - February 2019 (pdf format)
Bennelong Twenty20 Australian Equities Fund February 2019
7 Mar 2019 - Australian Fund Monitors
The latest Fund Review on Bennelong Twenty20 Australian Equities Fund is now available. The Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of ex-20 stocks.
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7 Mar 2019 - Bennelong Twenty20 Australian Equities Fund February 2019
By: Australian Fund Monitors
AFM Fund Review - February 2019 (pdf format)
BENNELONG TWENTY20 AUSTRALIAN EQUITIES FUND
Attached is our most recently updated Fund Review on the Bennelong Twenty20 Australian Equities Fund.
- The Bennelong Twenty20 Australian Equities Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of stocks outside the Top 20. Construction of the ex-top 20 portfolio is fundamental, bottom-up, core investment style, biased to quality stocks, with a structured risk management approach.
- Mark East, the Fund's Chief Investment Officer, and Keith Kwang, Director of Quantitative Research have over 50 years combined market experience. Bennelong Funds Management (BFM) provides the investment manager, Bennelong Australian Equity Partners (BAEP) with infrastructure, operational, compliance and distribution services.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - February 2019 (pdf format)
Performance Report: Frazis Fund
5 Mar 2019 - Australian Fund Monitors
The Frazis Fund returned +8.74% over January, outperforming AFM's Global Equity index by +4.1%.
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5 Mar 2019 - Performance Report: Frazis Fund
By: Australian Fund Monitors
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| Fund Overview | The manager follows a disciplined, process-driven, and thematic strategy focused on five core investment strategies: 1) Growth stocks that are really value stocks; 2) Traditional deep value; 3) The life sciences; 4) Miners and drillers expanding production into supply deficits; 5) Global special situations; The manager uses a macro overlay to manage exposure, hedging in three ways: 1) Direct shorts 2) Upside exposure to the VIX index 3) Index optionality |
| Manager Comments | Stanmore Coal fell after an approx. $240m takeover bid failed, which was Frazis' preferred outcome. Frazis exited Samsung above their purchase price which, they noted, was a way of correcting the Fund's underperformance over the past few months caused by their exposure to the global smartphone sector. The Fund has maintained a 4% holding in Apple and approximately a 3% holding in Sunny Optical. In addition, their top energy pick, Lundin Petroleum, has recovered its losses despite the dramatic fall in crude oil. Frazis believe any further upside in crude, while risky for the global economy, should significantly benefit the Fund. As at the end of Jan 2019, Frazis' Australian stocks had significantly outperformed their global investments and are now some of the Fund's largest positions; Afterpay at 7%, Stanmore Coal at 6% and Cooper Energy at 6%. The Fund has also maintained exposure to Chinese tech stocks which Frazis expect to benefit from the stimulus as it makes its way through the economy. They pointed out the stimulus in 2016 reversed falls in PMIs (which have given plenty of false signals over the past decade) and led to a bull market in global stocks. While off their lows, the Fund's US-listed Chinese stocks remain significantly below their 2018 highs, unlike US stocks which have largely recovered. |
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Performance Report: KIS Asia Long Short Fund
1 Mar 2019 - Australian Fund Monitors
The KIS Asia Long Short Fund rose +0.91% in January, taking 12-month performance to +1.99% versus the ASX200 Accumulation Index's +1.37% and annualised performance since inception in Oct 2009 to +12.34% versus the Index's +6.84%.
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1 Mar 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 | The Fund's strong focus on downside protection is illustrated by its Sortino ratio of 4.06 versus the Index's 0.49, average negative return of -0.81% versus the Index's -2.72% and down-capture ratio of -88.53% (a negative down-capture ratio indicates that, on average, the Fund has risen during the months the market has fallen). In addition, since inception the largest drawdown the Fund has experienced was -2.69% whereas over the same period that of the market was -15.13%. The main positive contributor for the month was Avita Medical Ltd (AVH.AX) which contributed +77bp. Across other positions no one name contributed or detracted more than 30bp. |
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