NEWS
Performance Report: Bennelong Concentrated Australian Equities Fund
8 Feb 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund has returned +15.76% p.a. since inception in February 2009. By contrast, the ASX200 Accumulation Index has returned +9.95% p.a. over the same period.
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8 Feb 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 | Detractors over the December quarter included Aristocrat Leisure, Flight Centre, Corporate Travel Management and BWX Limited. Positive contributors included Costa Group and BHP Billiton. As at December 2018, the Fund's portfolio positioning was as follows - heavy orientation towards growth, heavy weighting in lower risk and defensively positioned businesses, underweight stance to cyclicals (particularly domestic cyclicals), no banks in the portfolio highlighting the Fund's index-unaware approach, significant exposure to offshore earnings (CSL, Aristocrat Leisure and Reliance Worldwide), overweight the resources sector, biased away from large caps relative to the benchmark and minimal exposure to leveraged balance sheets. Bennelong noted the sell-off throughout the December quarter came about with a shift in investor sentiment to one of 'risk-off', thus resulting in REITs, utilities, gold stocks and big-cap defensives such as Woolworths holding up well as investors sought safety. Importantly, they noted, company fundamentals mattered little. Bennelong believe safety (and returns) ultimately derive from company fundamentals, which include one's competitive position, balance sheet strength, cash-flow generation and growth prospects. They believe the risk-off sentiment will tire and fundamentals will ultimately win out. |
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Performance Report: 4D Global Infrastructure Fund
8 Feb 2019 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +1.54% in December, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +1.03% and taking annualised performance since inception in March 2016 to +9.45%.
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8 Feb 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 performer for December was Mexican airport operator GAP, up +13.1%, recovering from an oversold position in November. The weakest performer was US rail operator Norfolk Southern, down -11.2%, which was part of an overall weak end to the year for US equities as fears of a 2019 economic slowdown, coupled with concerns the Fed made a mistake in raising rates in December, weighed heavily on stocks. Despite the expectation of a slowing global macro environment, 4D believe it remains in positive territory and supportive of the Fund's overweight position in user pay assets which have a direct correlation to macro performance. However, ongoing geo-political concerns see the Fund maintain core exposure to quality defensive utilities. |
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Performance Report: Quay Global Real Estate Fund
7 Feb 2019 - Australian Fund Monitors
The Quay Global Real Estate Fund has returned +7.6% over the past 12 months, outperforming its benchmark (FTSE/EPRA NAREIT Developed Index Net TR AUD) by +2.8%. Since inception in Jan 2016 the Fund has returned +6.49% per annum.
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7 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 the Fund wasn't immune to the sell-off in December as the panic in equity markets became much more widespread. The Fund returned -2.3% after a +3.2% gain from currency movements. The best geographies during the month were Hong Kong and the UK, while the worst were the US and Canada. Top contributors included Hysan and Wharf REIC (both HK, Diversified), while Chartwell (Canada, Healthcare) and RLJ (US, Hotels/Lodging) detracted the most. Late in the month Quay deployed some of their cash holdings to take advantage of the general price weakness and added Shurgard Self-Storage (Belgium, Storage) to the portfolio. Shurgard is the largest owner of storage assets across Europe. Quay noted they like storage because of the defensive nature of the cashflows and the low levels of stay in business capex. Quay believe that over the long-term SHUR will benefit from increased levels of product awareness across its European platform and very low levels of supply where the provision of storage space per capita across Europe is a fraction of the levels in the US and Australia. |
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Performance Report: NWQ Fiduciary Fund
7 Feb 2019 - Australian Fund Monitors
The NWQ Fiduciary Fund has returned +5.34% per annum with an annualised volatility of 4.95% since inception in May 2013. By contrast the ASX200 Accumulation Index has returned +6.10% p.a. with a volatility of 10.99% over the same period.
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7 Feb 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 | The Fund returned -0.49% in December. NWQ say the final quarter of 2018 was reminiscent of the same period 10 years earlier during the Global Financial Crisis with sharp falls across the major indices. They noted few of the Fund's underlying managers were able to hedge out the full extent of the market's fall, thus contributing to the Fund's quarterly return of -6.05%. NWQ pointed out that the reason for this was that the types of stocks typically favoured by managers (i.e. momentum and low volatility) underperformed the types of stocks that are avoided or viewed as short candidates (i.e. value and higher-yield). This resulted in the Fund deviating from its historical profile where prior to the December quarter its average return in negative markets was +0.12%. However, given that years in which the Fund underperformed its historical average in the past (i.e. 2014 and 2016) were almost always followed by years of outperformance (i.e. 2015 and 2017), NWQ remain positive the Fund will once again revert to the mean and make up for the December quarter's losses. |
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Performance Report: Loftus Peak Global Disruption Fund
6 Feb 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund has returned +2.31% over the past 12 months, outperforming the Global Equity benchmark by +1.67% and taking annualised performance since inception in November 2016 to +16.28% versus the benchmark's +11.11%.
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6 Feb 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 | The Fund returned -5.49% in December, with the largest detractors being Nvidia, Alibaba and Baidu. Key contributors included Tencent, Broadcom and Qualcomm. The value of the Fund's USD positions rose after the AUD depreciated 3.75% against the USD during the month. As at 31 December 2018, the Fund carried a foreign currency exposure of 99%. The Fund is 94% invested in 22 holdings which the manager considers likely outperformers. The balance is cash. The Fund's top 5 holdings are Tencent (7.7% of the portfolio), Apple (7.4%), Nvidia (7.3%), Alibaba (7.1%) and Qualcomm (6.8%). |
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Performance Report: Bennelong Australian Equities Fund
5 Feb 2019 - Australian Fund Monitors
The Bennelong Australian Equities Fund has returned +1.25% over the past 12 months, outperforming the ASX200 Accumulation Index by +3.09%. Since inception in February 2009, the Fund has returned +12.53% per annum versus the Index's +9.62%.
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5 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 | Detractors over the quarter included Aristocrat Leisure, Corporate Travel Management and Flight Centre. Key contributors included Costa Group, Goodman Group and BHP Billiton. Bennelong noted the sell-off throughout the December quarter came about with a shift in investor sentiment to one of 'risk-off', thus resulting in REITs, utilities, gold stocks and big-cap defensives such as Woolworths holding up well as investors sought safety. Importantly, they noted, company fundamentals mattered little. Bennelong believe safety (and returns) ultimately derive from company fundamentals, which include one's competitive position, balance sheet strength, cash-flow generation and growth prospects. They believe the risk-off sentiment will tire and fundamentals will ultimately win out. |
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Performance Report: Insync Global Capital Aware Fund
4 Feb 2019 - Australian Fund Monitors
The Insync Global Capital Aware Fund returned -0.74% in December, outperforming the Global Equity benchmark by +2.92% and taking 12-month performance to +4.56% versus the Global Equity benchmark's +0.64%.
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4 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 | The Insync Global Capital Aware Fund returned -0.74% in December, outperforming the Global Equity benchmark by +2.92% and taking 12-month performance to +4.56% versus the Global Equity benchmark's +0.64%. The Fund's significant outperformance this month highlights the benefit of Insync's put-option protection strategy, especially considering that the Fund's return after fees but before protection was -2.83%. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
1 Feb 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund has returned +9.07% per annum with an annualised volatility of 7.16% since inception in May 2006. By contrast, the ASX200 Accumulation Index has returned +5.10% p.a. with an annualised volatility...
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1 Feb 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 | The Fund returned -2.02% in December. Top contributors included Northern Star (+37bp contribution), Evolution Mining (+26bp), BHP (+34bp) and Rio Tinto (+21bp). The individual stock short book also performed well (+11bp), with shorts in the financial services and waste management sectors the key contributors. Detractors included ANZ (-87bp), NAB (-22bp), Nine Entertainment (-43bp), Macquarie Group (-25bp) and Netwealth (-17bp). Net equity market exposure was reduced from 47.3% to 30.4% (41.7% long and 11.3% short), with the key changes being new positions in Northern Star, Evolution Mining, Transurban and Woolworths, the closure of a short position in Share Price Index Futures contracts offset by seven new individual stock short positions as well as the sale of ANZ, NAB, Westpac and Nine Entertainment. |
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Performance Report: Cyan C3G Fund
31 Jan 2019 - Australian Fund Monitors
The Cyan C3G Fund has returned +17.83% p.a. since inception in August 2014. By contrast, the ASX200 Accumulation Index has only returned +4.66% p.a. over the same period.
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31 Jan 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 | Cyan noted the challenging market sentiment accelerated in December, impacting performance to the tune of -4.2%. This return was not attributed to any adverse stock specific news, a characteristic which Cyan believe is reassuring. In addition, in light of the bearish conditions, the Fund experienced 4 positions that rose, 3 that were flat and 17 that fell. Detractors included Murray River Organics (-16%), Experience Co (-13%) and AMA Group (-14%). Cyan say their views have not changed much from previous months, other than that company specific value appears to be increasingly attractive. Cyan emphasised that when assessing prospective investees they look at individual companies rather than overall markets and, given their strong growth profiles, they wholly believe that the companies in the Cyan C3G Fund will have more intrinsic value at the end of CY19 than they do presently. |
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Fund Review: Bennelong Kardinia Absolute Return Fund December 2018
30 Jan 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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30 Jan 2019 - Fund Review: Bennelong Kardinia Absolute Return Fund December 2018
By: Australian Fund Monitors
AFM Fund Review - December 2018 (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.Â
- 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 9.07% p.a. with a volatility of 7.16%, compared to the ASX200 Accumulation's return of 5.10% p.a. with a volatility of 13.31%.
- 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 - December 2018 (pdf format)
