NEWS
Performance Report: Bennelong Long Short Equity Fund
16 Oct 2018 - Australian Fund Monitors
The Bennelong Long Short Equity Fund has returned +2.46% over the past quarter and +19.37% over the past 12 months. Since inception in January 2003, the Fund has returned +16.40% p.a. versus the market's +8.19%.
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16 Oct 2018 - 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 | In September the Fund returned -3.85%, which Bennelong noted was due to a lack of profitable pairs. The short portfolio produced a small positive return whilst the long portfolio fell with the market. At the pair level around one third of pairs were positive, which Bennelong noted was out of the ordinary as a more typical outcome is that between half and two thirds of pairs tend to be profitable. Bennelong noted that, post reporting season, there was limited fundamental news during the month. Noteworthy for the Fund was a strong TPG Telecom FY18 result; the Fund is long TPG/short Telstra. Bennelong are optimistic about the proposed merger with Vodafone. In addition, Sims Metal downgraded their guidance only four weeks after delivering their result and guidance; the Fund is long BlueScope Steel/short Sims Metal. |
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Performance Report: Bennelong Emerging Companies Fund
12 Oct 2018 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +0.87% in September, outperforming the ASX200 Accumulation Index by +2.13% and taking the Fund's quarterly return to +5.92%.
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12 Oct 2018 - Performance Report: Bennelong Emerging Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may invest in securities expected to be listed on the ASX within 12 months. The Fund may also invest in securities listed, or expected to be listed, on other exchanged where such securities relate to ASX-listed securities |
| Manager Comments | At the end of September, the portfolio composition by sector comprised 29% Discretionary, 17% Industrial, 14% Financials, 11% Materials, 10% Consumer Staples, 9% IT, 7% Health Care and 3% cash. The Fund's top holdings included Pinnacle Investment Management, Baby Bunting, Clover, BWX and Helloworld. The Fund invests predominantly in micro and small-cap stocks listed on the ASX. It is managed via a research-intensive and predominantly bottom-up investment approach. The Fund focuses on high quality stocks and seeks to avoid the higher risk that usually comes with micro and small-cap stocks. |
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Performance Report: Bennelong Australian Equities Fund
10 Oct 2018 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +1.75% in August, outperforming the ASX200 Accumulation Index by +0.33% and taking annualised performance since inception in January 2009 to +14.88%.
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10 Oct 2018 - 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 August, Bennelong had increased the Fund's weightings in the Discretionary, Health Care, IT, REITs and Financials sectors, and decreased its weightings in the Consumer Staples, Industrials and Materials sectors. The Fund's cash weightings was increased to 0.9% from 0.4% at the end of the previous month. 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). |
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Performance Report: Quay Global Real Estate Fund
9 Oct 2018 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +4.4% in August, outperforming its benchmark (FTSE/EPRA NAREIT Developed Index Net TR AUD) by +0.6%. Since inception in July 2014, the Fund has returned +15.35% per annum.
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9 Oct 2018 - 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 | Top contributors included LEG Immobilien (German Residential) and Ventas Inc (US Health). Key detractors included Safestore (European Storage) and Wharf REIC (Hong Kong Retail). Quay noted fear that the strength of the USD (and therefore HKD) would curtail inbound tourism, and therefore retail spending, had a negative impact on the Fund's Hong Kong exposure. Quay also noted, with reporting season over, that they were pleased their investees' results and outlooks were generally in line with their expectations. In their latest report they detail their views on Scentre Group's reported results; their view is that Scentre was oversold and, as a result, Quay took advantage and increased their position. |
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Performance Report: Wheelhouse Global Equities Income Fund
5 Oct 2018 - Australian Fund Monitors
The Wheelhouse Global Equities Income Fund rose +4.61% in August, outperforming the ASX200 Accumulation Index by +3.19% and taking 12-month performance to +20.73%.
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5 Oct 2018 - 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 Manager noted August's return comprised a return of +1.77% from the portfolio (in USD) and a positive return of +2.84% from the strengthening of the Australian dollar versus the US dollar. Top contributors included Guidewire Software, Veeva Systems, Amazon, Salesforce and Express Scripts. Detractors included Nabtesco Corp, Transdigm Group, Microchip Technology, Hoshizaki and Compass Minerals. |
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Performance Report: Frazis Fund
4 Oct 2018 - Australian Fund Monitors
The Frazis Fund rose +1.63% in August, outperforming the ASX200 Accumulation Index by +0.21%.
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4 Oct 2018 - 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 | In August, the Manager sold out of Xero and the UK land developers. Frazis believe Xero has considerable pricing power but believe it to be better to sell and buy cheaper companies that are growing faster. They also allocated to iQiyi, Weibo and Alibaba, reasons for which are given in their latest report. In addition, they added a genetic testing company growing at over 150% per annum; Frazis believe the market for genetic testing has barely been scratched. Finally, Frazis added portfolio hedges in emerging markets in August. The Manager noted they have conducted most of their hedging in the United States where markets are most liquid. They noted this period of outperformance of the United States, and bear markets in many places elsewhere, squeezed the Fund on both sides of the trade. Going forward, Frazis aim to better match their hedging with their exposure, whilst maintaining their usual VIX and index protection. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
3 Oct 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +1.08% in August, taking annualised performance since inception in May 2006 to +10.40% versus the ASX200 Accumulation Index's +6.08%.
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3 Oct 2018 - 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 | Bennelong noted most of the portfolio's key positions reported solid results during profit reporting season. Top contributors in the long book included CSL (+74bp contribution), Afterpay Touch (+30bp), WorleyParsons (+25bp), Seven Group (+25bp) and A2 Milk (+20bp). In the short book, large gains from shorts in a packaging company (+23bp) and a mining stock (+10bp) were offset by shorts in retail, telco and consumer staples stocks. Detractors included Origin Energy (-51bp), Rio Tinto (-27bp), Independence Group (-18bp), Whitehaven Coal (-16bp), BWX (-15bp) and Reliance Worldwide (-15bp). Net equity market exposure was decreased from 67.3% to 55.2% (68.2% long and 13.7% short), with the key changes being the sale of Westpac, NAB and Origin Energy, partially offset by increased weightings in CSL, Whitehaven Coal and Afterpay, and the closure of a short position in Share Price Index Futures. |
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Performance Report: KIS Asia Long Short Fund
2 Oct 2018 - Australian Fund Monitors
The KIS Asia Long Short Fund returned +0.08% in August, taking annualised performance since inception in October 2009 to +12.99% versus the ASX200 Accumulation Index's +7.90%.
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2 Oct 2018 - 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 KIS Asia Long Short Fund returned +0.08% in August, taking annualised performance since inception in October 2009 to +12.99% versus the ASX200 Accumulation Index's +7.90%. This return has been achieved with an annualised volatility of only 5.17% versus the Index's 11.48%. The Fund's Sharpe and Sortino ratios, 1.88 and 4.26 respectively, by contrast with the Index's Sharpe of 0.48 and Sortino of 0.62, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst focusing heavily on protecting investors' capital from the market's downside. This is also supported by the Fund's down-capture ratio since inception of -95.13%, indicating that the Fund, on average, has risen when the market has fallen. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
27 Sep 2018 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +1.02% in August, taking 12-month performance to +19.68% versus the ASX200 Accumulation Index's +15.40%.
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27 Sep 2018 - 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 | As at the end of August, the Fund's weightings had been increased in the Discretionary, Health Care, Telco's, IT, REIT's and Financials sectors, and decreased in the Consumer Staples, Energy and Materials sectors. The Fund's top holdings are CBA, BHP, Westpac, CSL, Reliance Worldwide, ANZ, NAB and Aristocrat Leisure. The Fund combines a passive investment in the ASX20 Index and an actively managed investment in the ASX ex-20. The passive position is achieved by investing individually in each of the ASX20's individual stocks with approximately the same weightings they represent in the ASX300. Currently, this weight is approximately 60% of the Fund's portfolio. The active position in ex-20 stocks aims to allow the Fund to outperform the broader market. |
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Performance Report: Touchstone Index Unaware Fund
26 Sep 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +5.08% in August, outperforming the ASX200 Accumulation Index by +3.66%. Since inception in April 2016, the Fund has returned +15.28% per annum.
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26 Sep 2018 - 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 | At the end of the month the Fund held 20 stocks with a median position size of 4.5%, down -0.2% from the end of July. The portfolio's holdings had an average price/earnings of 16.2, EPS growth of 13.5%, tangible ROE of 19.5% and dividend yield of 4.5%. The Fund's cash weighting also decreased to 7.1% from 7.9% at the end of July. The Touchstone Index Unaware Fund primarily selects 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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