NEWS
Performance Report: Insync Global Capital Aware Fund
6 Jul 2018 - Australian Fund Monitors
The Insync Global Capital Aware Fund returned +2.22% after the cost of protection in May, outperforming the Global Equity index by +2.51% and taking annualised performance since inception in October 2009 to +10.22%.
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6 Jul 2018 - 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 Global Capital Aware Fund is a concentrated portfolio of large cap global companies with downside protection. Insync's investment strategy is driven by fundamentals combined with active risk management with the aim of to investing in high quality, large cap global companies at attractive prices. Insync looks for companies that can consistently pay rising dividends and earn high returns on invested capital. Their aims to provide investors with long term capital growth and some income. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
6 Jul 2018 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +8.09% in May, outperforming the ASX200 Accumulation Index by +7.0% and taking annualised performance since inception in Feb 2009 to +18.95%.
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6 Jul 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 May, the portfolio's weightings had been increased in the Health Care, Industrials and Materials sectors, and decreased in the Discretionary, Consumer Staples and Financials 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: Touchstone Index Unaware Fund
5 Jul 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund returned -0.96% in May. Since inception in April 2016, the Fund has returned +12.19% per annum.
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5 Jul 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 21 stocks with an median position size of 4.6%. Overall, the portfolio's holdings had an average price/earnings of 15.1, EPS growth of 16.2%, tangible ROE of 23.2% and dividend yield of 5.0%. 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. |
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Performance Report: Qato Capital Market Neutral Fund
4 Jul 2018 - Australian Fund Monitors
The Qato Capital Market Neutral Fund returned -2.81% in May, with the result driven predominantly by Qato's long book.
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4 Jul 2018 - Performance Report: Qato Capital Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund seeks to preserve capital and maximise absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks by generally holding up to 50 S&P/ASX-100 positions (up to 25 long positions & 25 short positions). Historically, the strategy has been uncorrelated to traditional asset classes with a negative beta to equity markets. Qato Capital's process is entirely systematic - stock selection and risk management are all employed in a rules based approach. Positions in Qato's long-portfolio and short-portfolio are rotated monthly dependent upon their Q-Score ranking. The strategy employs no financial leverage/gearing to purchase securities, no derivatives and no financial products to imitate leverage. |
| Manager Comments | At the sector level, Qato had a short bias to the Real Estate sector which rallied +3.13% for the month, hindering performance considerably. Qato held short positions in REITs, with an average performance of that subset of +6.03% for May, with only Westfield producing a negative return (-3.62%). Qato also noted that Telstra (short) provided a favourable 3Q trading update in May, announcing EBITDA would be at the bottom end of its already revised guidance range. Qato expect Telstra to reduce its dividend considerably as a means of stabilising its cash flows. |
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Performance Report: Quay Global Real Estate Fund
3 Jul 2018 - Australian Fund Monitors
The Quay Global Real Estate Fund returned +1.7% in May, taking annualised performance since inception in July 2014 to +13.82%.
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3 Jul 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 | The largest contributors to performance in May included Educations Realty Trust (US student accommodation) and Stag Industrial (US Industrial). LEG Immobilien (German Housing) was one of the few detractors, having given up some recent gains. As the take-over of Pure Industrial REIT was completed Quay reinvested the proceeds across their preferred names and introduced a small position in data storage REIT - Coresite Realty Corp. Global real estate delivered +1.3% total return supported by strong gains in the UK, Canada and the US. On a relative basis the Fund benefited by avoiding weaker geographies such as Japan and France. Quay noted they continue to expect the next move by the RBA to be down with a general trend toward a zero interest rate policy (ZIRP) over the medium term, and, as house prices continue to cool across the country, that expectation may soon become the new consensus. |
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Fund Review: Insync Global Capital Aware Fund May 2018
2 Jul 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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2 Jul 2018 - Fund Review: Insync Global Capital Aware Fund May 2018
By: Australian Fund Monitors
AFM Fund Review - May 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 - May 2018 (pdf format)
Performance Report: Bennelong Twenty20 Australian Equities Fund
29 Jun 2018 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +3.98% in May, outperforming the ASX200 Accumulation Index by +2.89% and taking annualised performance since inception to +10.78%.
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29 Jun 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 | At the end of the month, the Fund's weightings were increased in the Discretionary, Health Care, IT, Industrials and Materials sectors, and decreased in the Consumer Staples, Telco's, Energy, Financials and REIT's 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: ARCO Absolute Trust (formerly Optimal)
28 Jun 2018 - Australian Fund Monitors
The ARCO Absolute Trust returned -0.65% in May. Since inception in September 2008, the Fund has returned +8.14% per annum with an annualised volatility of 3.76%.
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28 Jun 2018 - Performance Report: ARCO Absolute Trust (formerly Optimal)
By: Australian Fund Monitors
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| Fund Overview | The Fund's bias is likely to be net long under normal market conditions, with the core strategy being to construct a portfolio of listed equity securities priced at levels that do not adequately reflect their underlying value. The Fund will seek to boost returns and limit potential market downside by selective short selling of individual stocks which are priced at levels that are viewed as materially above their underlying value. The Fund will also use certain trading strategies both within its core portfolio (through rebalancing stock weights and overall market exposure in response to price movements) and in certain other situations (typically of a shorter-duration and/or opportunistic nature) with the objective of further increasing returns. *Formerly the Optimal Australia Absolute Trust |
| Manager Comments | The Fund's primary positive driver of returns in May were the resources stocks. Notable positive contributors included BHP, NuFarm, Atlas Iron, Lynas and Super Retail Group (since exited), along with the Fund's continued short exposure to select banking and building material stocks. Two long positions dragged significantly on the portfolio's overall performance - Link and AHG. Short positions in interest rate sensitive stocks were a modest drag on the May result, though ARCO noted they continue to see increasing downside risk to the price of these stocks and retain their short exposure. ARCO also initiated a position in Fairfax Media and JB Hi-Fi during the month. ARCO continue to spend a significant amount of time researching the impact of a much more difficult credit environment on the local economy and the markets, not only to re-test their view on banks but also in recognition of the many multiplier effect on local stocks; they believe it is difficult to imagine that property prices will not take a material hit. ARCO's broad view by month end was that market headwinds are building again and so, consequently, have moved the portfolio risk settings to a modest net short market exposure. |
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Performance Report: 4D Global Infrastructure Fund
27 Jun 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund returned -2.88% in May. Since inception in March 2016, the Fund has risen +10.60% per annum.
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27 Jun 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 in May was Chinese gas distributor ENN Energy (+17.4%), driven by continued strong gas demand across China as they continue to promote the move from coal to gas. The second strongest performer was US LNG shipper Cheniere (+14.6%) who is capitalising on this theme, working the meet the strong Chinese and global demand for LNG. The weakest performer was Brazilian toll road operator Ecorodovias (-15.9%), with the stock caught up in the Brazilian trucking strike. 4D Infrastructure noted that, given the global macro environment, they remain overweight user pay assets which have a direct correlation to macro strength. However, ongoing geo-political concerns plus near-term elections sees 4D Infrastructure maintain core exposure to quality defensive utility assets. |
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Fund Review: ARCO Absolute Trust May 2018
26 Jun 2018 - Australian Fund Monitors
Read the latest Fund Review on ARCO Absolute Trust. ARCO Investment Management is a specialist Australian equity investment manager and the Fund has a long/short equity strategy typically with a low but variable net market exposure...
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26 Jun 2018 - Fund Review: ARCO Absolute Trust May 2018
By: Australian Fund Monitors
AFM Fund Review - May 2018 (pdf format)
ARCO ABSOLUTE TRUST (formerly Optimal Australia Absolute Trust)
AFM have released the most recently updated Fund Review on the ARCO Absolute Trust.
We would like to highlight the following aspects of the Fund;
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ARCO Investment Management is a specialist Australian equity investment manager and the Fund has a long/short equity strategy typically with a low but variable net market exposure comprising 40 to 65 stocks broadly selected from within the ASX200.
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The investment team comprising George Colman, Peter Whiting, and Stephen Nicholls bring 100 years combined experience in equity markets.
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The Fund has an annualised return since inception of +8.14%. The Fund's approach to risk is shown by the Sharpe ratio of 1.34 (Index 0.30), Sortino ratio of 2.79 (Index 0.33), both of which are well above the ASX 200 Accumulation Index and has recorded over 77% positive months.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - May 2018 (pdf format)
