NEWS
Performance Report: 4D Global Infrastructure Fund
1 Mar 2019 - Australian Fund Monitors
The 4D Infrastructure Fund rose +7.52% in January, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +6.90% and taking annualised performance since inception in March 2016 to +11.92%.
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1 Mar 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 portfolio benefited from overall market upside, with the outperformance relative to the market being driven by strong performance from Brazil as well as the US midstream sub-sector. The strongest performer for January was Brazilian toll road operator CCR (+32.9%), driven by general positive sentiment towards Brazil's new government as well as sector specific news regarding concession extensions. The weakest performer in January was China Resources Gas Group (-1.4%), driven by concerns of a slowing Chinese economy and potential negative implications for gas demand. 4D Infrastructure remain confident in the long-term domestic demand story. Despite a slowing global macro environment, 4D noted it remains in positive territory and supportive of the Fund's overweight positioning towards user pay assets which have a direct correlation to macro. However, they remain cautious of ongoing geo-political issues and have positioned accordingly. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
1 Mar 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +2.93% in January, marking 10 years of operation for the Fund and taking annualised performance since inception to +15.74% versus the ASX200 Accumulation Index's +9.95%.
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1 Mar 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 | Bennelong noted that, particularly in these tougher times, sticking to the same tried-and-tested process is paramount. To that end, they remain focused on what they believe ultimately drives investor returns over time: earnings, growth prospects and other business fundamentals. Some stocks held in the portfolio, such as Aristocrat Leisure, have been sold down in recent months, in some cases without any material deterioration in fundamentals. Bennelong noted this has affected the Fund's returns, but in general the lower share prices have set them up with more attractive risk-return dynamics. Moving into reporting season Bennelong say they are mindful of what they perceive to be significant earnings risk prevalent right across the market. Their view is that investors nowadays are brutal when it comes to even minor earnings misses or downgrades. Overall, Bennelong like how the portfolio is currently positioned and are optimistic on its investment prospects. |
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Performance Report: Touchstone Index Unaware Fund
28 Feb 2019 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +3.75% in January, taking annualised performance since inception in April 2016 to +8.87%.
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28 Feb 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 January, the Fund held 21 stocks with a median position size of 4.4%. The portfolio's holdings had an average forward year price/earnings of 14.3, forward year EPS growth of 5.3%, forward year tangible ROE of 28.2% and forward year dividend yield of 5.0%. The Fund's cash weighting increased to 3.7% from 3.3% at the end of December. 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: Quay Global Real Estate Fund
28 Feb 2019 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +6.90% in January, taking 12-month performance to +20.45% versus AFM's Global Equity Index's +2.82%. The Fund has returned +8.63% per annum since inception in Jan 2016.
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28 Feb 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 performance in January was broad based, with every investee contributing positively to the month's total return, led by the Fund's UK exposures (Safestore and Unite Group) and US retail landlord Brixmor Property Group. The Global Real Estate sector (up +7.0 in January) meaningfully outperformed equities as, Quay believe, investors appeared to chase 'yield proxies' in anticipation of the end of the interest rate cycle. They also noted they aren't particularly negative on the US economy; jobs growth (which is fundamental for real estate) remains robust and they see that there seems to be reasonable capacity for this momentum to continue. Quay are more concerned about the economic outlook in Europe as the German and Italian economies continue to weaken and uncertainty regarding Brexit weighs. The Fund is defensively positioned in these markets with exposure to traditionally defensive sectors such as student accommodation and affordable housing. Quay continue to monitor potential investment opportunities in Europe and the UK and remain prepared to take advantage in the event of meaningful market dislocation. |
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Performance Report: Bennelong Australian Equities Fund
27 Feb 2019 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +3.75% in January, marking 10 years since inception in 2009. Since then, the Fund has returned +12.84% p.a. versus the ASX200 Accumulation Index's +9.95%.
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27 Feb 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 | Bennelong noted that, particularly in these tougher times, sticking to the same tried-and-tested process is paramount. To that end, they remain focused on what they believe ultimately drives investor returns over time: earnings, growth prospects and other business fundamentals. Some stocks held in the portfolio, such as Aristocrat Leisure, have been sold down in recent months, in some cases without any material deterioration in fundamentals. Bennelong noted this has affected the Fund's returns, but in general the lower share prices have set them up with more attractive risk-return dynamics. Moving into reporting season Bennelong say they are mindful of what they perceive to be significant earnings risk prevalent right across the market. Their view is that investors nowadays are brutal when it comes to even minor earnings misses or downgrades. Overall, Bennelong like how the portfolio is currently positioned and are optimistic on its investment prospects. |
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Performance Report: Insync Global Capital Aware Fund
27 Feb 2019 - Australian Fund Monitors
The Insync Global Capital Aware Fund rose +3.28% in January, taking 12-month performance to +4.52% and the Fund's annualised return since inception in October 2009 to +9.42%.
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27 Feb 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 that in January strong contributions from stock selection were partially offset by a decline in the value of the index 'puts' due to a sharp market recovery and significant fall in volatility. Positive contributors included Facebook, Intuit, Intercontinental Hotel Group, London Stock Exchange and Adidas. Detractors included Twenty-First Century Fox, Heineken, Walt Disney, Visa and Zoetis. No currency hedging continues across both of Insync's funds as Insync consider the main risks to the Australian dollar to be on the downside. |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
27 Feb 2019 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund rose +0.80% in January, taking 12-month performance to +10.44% versus the ASX200 Accumulation Index's +1.37%. Since inception in July 2013, the Fund has returned +9.11% per annum.
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27 Feb 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 | Harvest Lane noted the month was fairly active as they continued to see steady deal flow and positive catalysts in some of the Fund's existing positions which proved to be a key driver of the month's performance. The current portfolio composition consists of a larger number of deals in their early stages than Harvest Lane have typically observed in recent months. They noted they tend to allocate more capital to transactions as they firm up and exercise restraint so as not to over commit until doing so is warranted. The portfolio remains appropriately weighted in these new opportunities and holds enough cash to meaningfully scale up should the transactions progress as Harvest Lane anticipates. |
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Fund Review: Insync Global Capital Aware Fund January 2019
26 Feb 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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26 Feb 2019 - Fund Review: Insync Global Capital Aware Fund January 2019
By: Australian Fund Monitors
AFM Fund Review - January 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 - January 2019 (pdf format)
Performance Report: Wheelhouse Global Equities Income Fund
26 Feb 2019 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund returned +0.36% in January, taking 12-month performance to +7.15% and annualised performance since inception in May 2017 to +5.34%.
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26 Feb 2019 - Performance Report: Wheelhouse Global Equities 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's January return comprised +3.93% from the portfolio (in USD) and a negative return of -3.72% from the strengthening of the Australian dollar versus the US dollar. Top contributors included ServiceNow Inc, KLA Tencor, Canadian Pacific Railway, Union Pacific and Jones Lang LaSalle. Key detractors included Kao Corp, Amgen, Medtronic, Pfizer and Unilever. The Fund is designed to deliver equity returns with higher income generation and active downside protection. The strategy's high income generation and active tail risk program are designed to lower risk and deliver equity returns with a smoother, more retiree-friendly return profile. As a result, Wheelhouse intend for returns to add relative value in weak and low-growth markets and to drag in more positive markets. |
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Performance Report: Spectrum Strategic Income Fund
25 Feb 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund rose +0.27% in January, taking 12-month performance to +3.35% and annualised performance since inception in June 2009 to +8.03%.
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25 Feb 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | Spectrum noted they maintain minimal direct exposure to domestic residential property and maintain an underweight position in the lenders to the sector. They fear that unless home loan growth re-accelerates prices will fall far more than the 6% experienced nationally since late 2017. They say the parallels with other property corrections driven by slowing credit growth are a concern. They believe falling local government bond yields and low corporate default rates could spur a chase for returns. This, they say, may remain supportive of lower credit spreads (capital gains) as Japan experienced when government bond yields collapsed. Spectrum expect 2019 to be an interesting year for A$ corporate bond investors. |
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