NEWS
Performance Report: Bennelong Concentrated Australian Equities Fund
18 Jan 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund returned -0.67% in November, outperforming the ASX200 Accumulation Index by +1.54% and taking annualised performance since inception in Jan 2009 to +16%.
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18 Jan 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 November, the Fund's weightings had been increased in the Materials and REIT's sectors and decreased in the Discretionary, Health Care, Consumer Staples and Industrials sectors. The Fund's Communications sectors weighting remained unchanged at 1.7% of the portfolio. |
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Performance Report: Wheelhouse Global Equities Income Fund
18 Jan 2019 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund returned -0.86% in November, outperforming AFM's Global Equity Index by +0.94% and taking annualised performance since inception in May 2017 to +7%.
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18 Jan 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 | Top contributors during the month included Nabtesco Corp, Biogen, Pfizer, Amgen and Kao Corp. Detractors included Richemont, Essilorluxottica, Julius Baer Gruppe, Symrise and Facebook. The Wheelhouse Global Equity Income 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: Quay Global Real Estate Fund
17 Jan 2019 - Australian Fund Monitors
The Quay Global Real Estate Fund returned +0.2% in November, taking 12-month performance to +8.35% and annualised performance since inception in February 2016 to +7.55%.
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17 Jan 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 were pleased with the Fund's performance in November as investors sought safer havens from general equity market volatility and uncertainty. Generally, Healthcare and Multifamily REITs fared well, but mid-market Retail and Office REITs did not. The Fund's modest return of +0.2% was in spite of a -2.8% currency impact. Performance was further negatively impacted by a relatively new addition to the portfolio - Boardwalk REIT (affordable accommodation with concentration in oil producing regions in Canada) - which fell -18% in local currency terms, however, Quay believe this price movement to have been an overreaction. The best geographies during the month were the US and Germany, whilst the UK, France and other European markets were the worst performers. Quay noted the Fund's exposure to the UK was negatively impacted by the continuing uncertainty around the Brexit process. Quay added that, while they remain cautious on the UK economy in light of Brexit, they are confident their investees will continue to perform well; the Fund's exposure is restricted to recession resistant industries (Student Accommodation) or sectors that have limited supply risks (Storage). There were no changes to the portfolio for the month. |
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Performance Report: KIS Asia Long Short Fund
16 Jan 2019 - Australian Fund Monitors
The KIS Asia Long Short Fund returned -0.24% in November, outperforming the ASX200 Accumulation Index by +1.97% and taking annualised performance since inception in October 2009 to +12.59% versus the Index's +6.54%.
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16 Jan 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 November, key contributors included a long position in LiveHire (+37bp contribution), Rio Tinto (+31bp) and a short position in Coca-Cola Amatil (+31bp). The main detractor during the month was a long position in CYBC PLC (-84bp). KIS noted there were no other lines with losses greater than 30bp. In their latest report KIS highlight that 89% of assets were negative YTD, the worst result since 1901 (the beginning of the data series). They also briefly discussed the turnaround in global markets as central banks shift from policies of quantitative easing to quantitative tightening, pointing to coordinated falls in residential property markets in London, New York, Toronto, Sydney, and Melbourne, as well as slumping equity and credit markets. KIS Capital say that, especially in this environment, their ability to short is highly valuable. They noted that over the year their short positions have allowed them to deliver a positive return. Their suggestion to investors is, if you have direct equities in your portfolio, consider whether these companies will need access to credit markets or equity markets to fund their businesses. They also warn investors to be wary of asset owners (especially those who balance long term assets with short term liabilities) and high PE/PEG ratio stocks. KIS believe cash will be king by 2020 and thus believe investors should have some readily available. |
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Performance Report: Spectrum Strategic Income Fund
16 Jan 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund returned -0.07% in November, outperforming the ASX200 Accumulation Index by +2.14% and taking annualised performance since inception to +8.11%.
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16 Jan 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | Spectrum noted November was a month beset with collapsing equity prices, falling oil prices, widening credit spreads, slowing global growth and falling government bond yields. Their view is that this weakening is outpacing the deterioration in fundamentals which is leading to the emergence of value. In addition, Spectrum believe a theme of growing importance is the realisation that accommodative monetary policy has or is about to reverse, which they noted could have an adverse effect on companies that 'gorged' on cheap debt. This in turn could lead to significant pricing risk to lower rated investment grade bonds should they slide into non-investment grade status; Spectrum highlight General Electric as a candidate for junk status. Domestically, Spectrum point to Australia's credit issues as well as the impact on the economy being caused by drought, weak commodity prices and a deteriorating residential property market. Their view is the domestic residential property market remains vulnerable to further deterioration, hence their cautious portfolio construction in this environment of heightened uncertainty. |
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Performance Report: Insync Global Capital Aware Fund
14 Jan 2019 - Australian Fund Monitors
The Insync Global Capital Aware Fund has returned +3.71% over the past 12 months after fees and protection, outperforming AFM's Global Equity Index by +0.79%. Since inception in October 2009, the Fund has returned +9.30% per annum.
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14 Jan 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 -3.78% after fees and protection in November. Insync noted November was a volatile month, swinging 1-2% daily for major indices. Positive contributors included Tencent, 21st Century Fox, Biogen and Stryker. Detractors included Amadeus, Facebook, Wirecard and Nvidia. Insync emphasised that the Fund's protection is only in place to protect against sudden deep losses in portfolio value, not the typical ebbs currently being experienced at this stage of the investment cycle. |
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Performance Report: Bennelong Australian Equities Fund
11 Jan 2019 - Australian Fund Monitors
The Bennelong Australian Equities Fund returned -1.50% in November, outperforming the ASX200 Accumulation Index by +0.71% and taking 12-month performance to +3.64%. Since inception in February 2009, the Fund has returned +12.72% per annum...
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11 Jan 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 | As at the end of November, the Fund's weightings had been increased in the Discretionary, Materials and REIT's sectors, and decreased in the Health Care, Consumer Staples, Industrials and Communication sectors. The Fund aims to invest in high quality companies with strong growth outlooks and underestimated earnings momentum. By comparison with the ASX300 Accumulation Index, the Fund's holdings, on average, have a higher Return on Equity and lower Debt/Equity (Premium Quality), higher sales growth and higher EPS growth (Superior Growth), and higher Price/Earnings and lower dividend yield (Reasonable Valuation). This indicates that the Fund's portfolio is in line with the Manager's investment objective. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
10 Jan 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund has returned +9.31% p.a. with an annualised volatility of only 7.14% since inception in May 2006. Over the same period, the ASX200 has returned +5.14% p.a. with an annualised volatility of 13.36%.
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10 Jan 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 | In November the Fund returned -2.18%, falling in line with the market as quality growth stocks such as Aristocrat and CSL hurt performance. The greatest positive contributor was a short position in Share Price Index Futures (+48 basis points contribution). The individual stock short book also performed well (+21bp) with shorts in the telco, health insurance and automotive retail sectors being the key contributors. Other positive contributors included ANZ (+37bp), NAB (+26bp), Netwealth (+28bp) and Qantas (+19bp). Detractors included Aristocrat (-65bp), CSL (-48bp), Seven Group (-41bp) and Computershare (-31bp). Net equity market exposure was reduced from 55.0% to 47.3% (81.3% long and 34.0% short), with the key changes being new positions in Commonwealth Bank, James Hardie, Nine Entertainment and Woodside Petroleum, as well as increased weightings in ANZ and NAB, offset by the sale of Whitehaven Coal and CYBG, seven new individual stock short positions and an increased short position in Share Price Index Futures. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
9 Jan 2019 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund returned -1.80% in November, outperforming the ASX200 Accumulation Index by +0.41% and taking annualised performance since inception in November 2009 to +9.31%.
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9 Jan 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 | By the end of November, the Fund's weightings had been increased in the Discretionary, Health Care, Industrials, REIT's, Financials and Materials sectors, whilst the weightings in the Consumer Staples and Communication sectors were decreased. The Fund combines a passive investment in the S&P/ASX20 Index and an actively managed investment in Australian listed stocks outside this index. The passive position is achieved by investing individually in each of the S&P/ASX20 Index's individual stocks with approximately the same weightings they represent in the S&P/ASX300. Currently, this weighting is over 50%. The active position in ex-20 stocks aims to allow the Fund to outperform the broader market. |
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Fund Review: Insync Global Capital Aware Fund November 2018
21 Dec 2018 - 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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21 Dec 2018 - Fund Review: Insync Global Capital Aware Fund November 2018
By: Australian Fund Monitors
AFM Fund Review - November 2018 (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 - November 2018 (pdf format)
