NEWS
Performance Report: Touchstone Index Unaware Fund
6 Jun 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +2.70% in April, taking annualised performance since inception in April 2016 to +13.23%.
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6 Jun 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 | The Touchstone Index Unaware Fund primarily selects stocks from the S&P/ASX 300 Index and typically holds 10-30 stocks. It seeks to invest in reasonably priced, good quality companies with a significant share of expected returns coming from sustainable dividends. At the end of the month the Fund held 22 stocks with an median position size of 4.1%. Overall, the portfolio's holdings had an average price/earnings of 14.6, EPS growth of 15.8%, tangible ROE of 23.7% and dividend yield of 5.1%. |
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Performance Report: Insync Global Titans Fund
5 Jun 2018 - Australian Fund Monitors
The Insync Global Titans Fund rose +2.06% in April after the cost of fees and protection. Since inception in October 2009, the Fund has returned +10.04% per annum with a volatility of 8.81%.
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5 Jun 2018 - Performance Report: Insync Global Titans 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 has added new stocks to the portfolio within the Demographic Megatrend cluster of the 'global travel explosion'. Within the same cluster, Insync exited the profitable 'consumer goods' trend as fundamental conditions impacting this had changed. Both of these moves added positively to the Fund's April returns. Key positive contributors in April included Visa, Booking Holdings and Stryker, whilst the main negative contributors were TE Connectivity, eBay and Charter Communications. The Fund continues to have no foreign currency hedging in place as Insync believe the main risks to the Australian dollar to be on the downside. Utilisation of index put options to buffer sharp falls in equity markets remains. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
4 Jun 2018 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +3.66% in April, taking annualised performance since inception in January 2009 to +18.14%.
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4 Jun 2018 - 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 April, the Fund's weightings had been increased in the Consumer Staples, Health Care, Materials and Financials sectors, and decreased in the Discretionary and Industrials sectors. The Fund aims to invest in a concentrated portfolio of high quality companies with strong growth outlooks and underestimated earnings momentum and prospects. By comparison with the Fund's benchmark (ASX300 Accumulation Index), the portfolio's characteristics show that its holdings, on average, have a higher Return on Equity and lower debt/equity (Premium Quality), higher sales growth and higher EPS growth (Superior Growth), as well as higher price/earnings and lower dividend yield (Reasonable Valuation). |
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Performance Report: Quay Global Real Estate Fund
1 Jun 2018 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +4.2% in April, taking annualised performance since inception in July 2014 to +13.64% per annum.
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1 Jun 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 | During the month one of the Fund's investees, Hispania Activos, attracted an unsolicited bid from entities associated with Blackstone. The Manager noted the offer of 17.45 euros compares well with their entry price of 11.85 euros last year, however, they also noted that management are seeking a better outcome for investors. Quay will continue to hold their position, knowing their downside is limited with the option of additional returns. Notwithstanding share market optimism, the Manager continues to see weakness in the local macro economy as national house price growth turned negative in April (on an annual basis). They believe the combined effect of tighter lending standards and elevated supply is weighing on buyer sentiment. In addition, Quay still believe Australian interest rates, in time, could reach zero. |
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Performance Report: NWQ Fiduciary Fund
31 May 2018 - Australian Fund Monitors
The NWQ Fiduciary Fund returned +0.62% in April, taking performance since inception in May 2013 to +7.23% p.a. with an annualised volatility of 4.72%.
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31 May 2018 - 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 | During the month, NWQ's Investment Committee modestly increased the Fund's exposure to the equity market neutral strategy by adding a newly approved manager. NWQ noted the current market environment is delivering relatively high stock price dispersion which is favourable for skilled equity market neutral managers. The Fund's beta exposure remains historically low given NWQ's current market risk assessment. |
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Performance Report: 4D Global Infrastructure Fund
30 May 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +3.03% in April, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +2.32%. The Fund has returned +12.54% per annum since inception in March 2016.
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30 May 2018 - 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 was Brazilian toll road operator Ecorodovias (+13.7%), while the weakest performer was American tower operator Crown Castle (-8%). Given the ongoing global growth environment, the Fund remains overweight user pay assets which have a direct correlation to macro strength. The Manager also noted that, while they are underweight utilities ('bond proxies'), ongoing geo-political concerns as well as a number of near-term elections sees the Fund maintain core exposure to quality defensive utility assets. The Manager's outlook for global listed infrastructure over the medium term remains positive. They noted there has been a significant underinvestment in infrastructure around the world over the past 30 years and that public sector fiscal and debt constraints will limit governments' ability to respond, resulting in an increasing need for private sector capital as part of the funding solution. |
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Performance Report: KIS Asia Long Short Fund
29 May 2018 - Australian Fund Monitors
The KIS Asia Long Short Fund returned -0.55% in April. Since inception in October 2009, the Fund has returned +13.46% p.a. with an annualised volatility of 5.21%.
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29 May 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 | In April, the Fund's short position in Blue Sky Alternatives (BLA.AX) was the largest contributor (+26bp). No other position contributed or detracted more than 20bp. KIS noted that, when evaluating the return of the Fund to identify the source of the loss over the month, there was clearly no one significant line. In their latest commentary, KIS discuss their short position in Blue Sky Alternatives (BLA.AX) and their reservations about BLA.AX prior to Glaucus' report. KIS believe what Glaucus published was fair; their logic was stated and was made available to all. KIS was flat BLA.AX at the time of the release of Glaucus' report, however, they shorted the stock soon after and shorted further stock both after listening to Blue Sky's initial rebuttal and after Glaucus' second comment which confirmed KIS' opinion of the BLA.AX rebuttal. As mentioned above, BLA.AX was the Fund's largest contributor in April (+26bp). |
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Performance Report: Glenmore Australian Equities Fund
28 May 2018 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +0.04% in April, taking cumulative performance since inception in June 2017 to +28.94%.
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28 May 2018 - Performance Report: Glenmore Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | Positive contributors in April included Macquarie Atlas Roads (+13.3%), Bravura Solutions (+8.1%), Appen (+8.4%), Jumbo Interactive (+6.6%) and Imdex (+5.1%). Detractors included Fiducian Group (-11.5%), Mastermyne (-7.8%) and Emeco (-3.4%). Glenmore noted Fiducian Group's return was largely impacted by the ongoing Royal Commission and that, while there is no evidence that FID's financial planners have given poor or conflicted advice to their clients, currently there is uncertainty as to how ASIC will respond once its investigation in the larger players has concluded. Glenmore remain in regular contact with the company and will continue to assess whether the recent decline in stock price represents a buying opportunity for longer term investors. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
25 May 2018 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +2.88% in April, taking annualised performance since inception in December 2015 to +10.39% per annum.
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25 May 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 | By the end of April, the Fund's weightings were increased in the Consumer Staples, Health Care, IT, Energy and Materials sectors, and decreased in the Discretionary, Telco's, Industrials and Financials sectors. 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 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: Bennelong Kardinia Absolute Return Fund
24 May 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +1.56% in April, taking annualised performance since inception in May 2006 to +10.58% per annum with an annualised volatility of 6.93%.
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24 May 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 | Top contributors for the month included CSL (+40 basis points contribution), Bluescope (+38bp), Alumina (+37bp), Independence Group (+32bp), BHP (+20bp), Origin Energy (+28bp), WorleyParsons (+27bp), Santos (+26bp) and Macquarie Group (+29bp). A short position in Share Price Index Futures (-88bp contribution) was the biggest detractor given the rise in the market. Other detractors included Boral (-31bp) and Bellamy's (-18bp). Overall, the short book made a negative contribution for the month. Net equity market exposure (including derivatives) was kept steady at 60.7% (75.1% long and 14.4% short), with the addition of Rio Tinto and the buyback of part of the Fund's short position in SPI Futures contracts offsetting the sale of ANZ, BHP and Westpac and a reduction in the size of some key holdings including Boral, Star Entertainment, Janus Henderson, Aristocrat and CSL. |
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