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Fund Review: Bennelong Kardinia Absolute Return Fund November 2017
26 Dec 2017 - Australian Fund Monitors
Latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available.
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26 Dec 2017 - Fund Review: Bennelong Kardinia Absolute Return Fund November 2017
By: Australian Fund Monitors
AFM Fund Review - November 2017 (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.
- 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 10.84% p.a. with a volatility of 7.00%, compared to the ASX200 Accumulation's return of 5.69% p.a. with a volatility of 13.62%.
- 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 - November 2017 (pdf format)
Performance Report: Insync Global Titans Fund
25 Dec 2017 - Australian Fund Monitors
The Insync Global Titans Fund returned +2.03% in November, after the cost of fees and protection. Since inception in October 2009, the Fund has returned +10.01% per annum with a volatility of 8.93%.
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25 Dec 2017 - 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 | Performance in November was driven by positive contributions from Zoetis, PayPal, Heineken, Disney and Visa. The main negative contributors were Oracle, Cognizant Tech Solutions, eBay, BAT and Priceline. The Fund continues to have no foreign currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Over 50% of the Fund is currently protected using Insync's put protection strategy. Insync's latest report discusses the acceleration of 'cord cutting', the act of cancelling one's pay-TV subscription in favour of internet-delivered video options, and the impact on Fox's business. However, Insync noted nearly 40% of Fox's revenues are generated outside the US, Star India being one of Fox's international businesses in which Insync see significant potential. Insync also noted the recent negative trend in cord cutting has created an opportunity to invest at depressed valuations. They see an asymmetric risk profile with limited downside risks but significant upside opportunity. |
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Bennelong Twenty20 Australian Equities Fund November 2017
25 Dec 2017 - Australian Fund Monitors
Latest Fund Review on Bennelong Twenty20 Australian Equities Fund is now available.
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25 Dec 2017 - Bennelong Twenty20 Australian Equities Fund November 2017
By: Australian Fund Monitors
AFM Fund Review - November 2017 (pdf format)
BENNELONG TWENTY20 AUSTRALIAN EQUITIES FUND
Attached is our most recently updated Fund Review on the Bennelong Twenty20 Australian Equities Fund.
- The Bennelong Twenty20 Australian Equities Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of stocks outside the Top 20. Construction of the ex-top 20 portfolio is fundamental, bottom-up, core investment style, biased to quality stocks, with a structured risk management approach.
- Mark East, the Fund's Chief Investment Officer, and Keith Kwang, Director of Quantitative Research have over 50 years combined market experience. Bennelong Funds Management (BFM) provides the investment manager, Bennelong Australian Equity Partners (BAEP) with infrastructure, operational, compliance and distribution services.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - November 2017 (pdf format)
Performance Report: KIS Asia Long Short Fund
22 Dec 2017 - Australian Fund Monitors
The KIS Asia Long Short Fund returned +0.71% for November, with an annualised return since inception in October 2009 of +13.68%.
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22 Dec 2017 - 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 | Top contributors in November included Cobalt One Ltd (63bp contribution to performance), which experienced strong gains after its merger with First Cobalt Corporation. KIS Capital remain positive on this company and the industry and remain long. KIS noted being short index cost the Fund -34bp, however, this was offset by gains on long positions in a variety of different names with no one single name contributing more than 25bp. The portfolio remains diversified with more than 50 different lines as at the end of the month. In their latest report KIS discuss concerning signs they see about the state of markets, however, they feel the Fund is broadly hedged against them. They noted that, despite equity markets continuing to make fresh highs, there are moves occurring within equity markets and elsewhere that can often be a precursor to a significant broad market downturn. |
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Performance Report: Quay Global Real Estate Fund
21 Dec 2017 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +4.20% in November, taking annualised performance since inception to +15.20%.
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21 Dec 2017 - 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 the Manager exited Hansteen Holdings, a company they'd held since inception in July 2014. The company delivered the Fund a total return of +55% over the investment period, surpassing the Fund's objective. Performance was further enhanced after the recently acquired position in GGP Inc received an offer from entities associated with its largest shareholder, Brookfield. GGP Inc owns and manages approximately 120 mall in the US. The Manager noted the GGP offer is in its early days and that there is no certainty a transaction will eventuate, therefore they are not adding to their position at this stage. At month end, the Fund held slightly more cash than normal due to its exit of Hansteen Holdings. The Manager expects to deploy this capital soon, as they continue to believe attractive investment opportunities exist across the global real estate landscape. |
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Performance Report: ARCO Absolute Trust (formerly Optimal)
20 Dec 2017 - Australian Fund Monitors
The ARCO Absolute Trust returned +1.57% in November. The Fund's annualised return since inception in September 2008 is +8.41% with a volatility of 3.74%.
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20 Dec 2017 - 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 long positions drove performance in November, most notably from a number of long-held positions in JHG, WOW, CYB, AHG and ORE. Limiting the Fund's long exposure in banks to CBA, Macquarie and CYB was also a positive contributor, as was the broader short position in the sector with the Royal Commission announcement into banks. ARCO exited Pilbara Minerals and trimmed Orocobre, although they remain interested in EV and energy storage. Lynas Corporation was added to the portfolio during the month. The Fund exited its investment in FXJ and the Fund continues to be active in TLS, where ARCO believe a solid long investment case is emerging. The Fund's aggregate short positions detracted from performance, ARCO expect these positions to continue to protect investor capital in a market they believe is increasingly overvalued. Into 2018, ARCO believe the 'lower for longer' monetary policy of central banks will continue to be unwound and that the economic fundamentals of companies will play a greater role in their stock price valuations. ARCO noted Corporate Australia will continue to benefit from low domestic rates which should fuel their growth plans, though consumer weakness (indebtedness and sentiment) and tightening bank credit will be a challenge to broad market earnings. They believe volatility in the Australian market will likely rise. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
19 Dec 2017 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +1.08% in November, taking annualised performance since inception to +11.23%.
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19 Dec 2017 - 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 November, weightings were increased in the Consumer Staples, Health Care, Energy and REIT's sectors and were decreased in the Discretionary, Industrials, Telco's, Financials and Materials 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 has the goal of allowing the Fund to outperform the broader market. |
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Performance Report: NWQ Fiduciary Fund
18 Dec 2017 - Australian Fund Monitors
The NWQ Fiduciary Fund rose +1.65% in November, taking annualised performance since inception in May 2013 to +6.84% with a volatility of 4.82%.
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18 Dec 2017 - 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 | There were solid contributions to the overall Fund performance from both the Alpha and Beta managers. The Beta managers benefited from the continued strength of the broader equity market, while the Alpha managers benefited from higher levels of dispersion both within and across sectors. Overall, seven of the eleven underlying managers comprising the Fund delivered positive returns. The Fund is a diversified multi manager portfolio comprising 11 managers in total, 6 Alpha managers and 5 Beta managers. The objective of the Fund is to produce attractive positive returns irrespective of market direction. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record. |
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Performance Report: Pengana Absolute Return Asia Pacific Fund
15 Dec 2017 - Australian Fund Monitors
The Pengana Absolute Return Asia Pacific Fund increased +0.25% in November, taking annualised performance since inception in September 2010 to +8.42%.
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15 Dec 2017 - Performance Report: Pengana Absolute Return Asia Pacific Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will usually hold 40 to 80 positions and will be well diversified across the various event strategies. In keeping with the absolute return focus the Manager will eliminate market risk where appropriate by hedging market and foreign currency risks. Since inception the Fund has averaged a net equity market exposure of ~10%. Sizing of an investment position will depend on the expected risk adjusted returns while taking account the liquidity and volatility of the stock. In addition, the maximum potential loss on any one position should be greater than 0.5% of the NAV and the position should not exceed 30% participation of stressed volume assuming a $200m NAV. Other criteria considered are ability to hedge and the availability of pair candidates as well as the average bid-ask size. For M&A strategies average long position is 3 to 5.5% and average short position 2 to 5%. |
| Manager Comments | The M&A and Direction Alpha strategies contributed positively for the month, returning +0.4% and +0.32% respectively, while the Relative Value book detracted -0.43%. In the M&A book, positive contributors included the Fund's position in Hong Kong listed TCC International Holdings (+0.20%) and Siliconware Precision Industries in Taiwan. The Fund also added Changyou.com Limited in the month. In Australia, the Fund's position in Pepper Group completed successfully, as the scheme implementation agreement by private equity buyer KKR was voted through. Key successes in the Directional Alpha book were Shangri-La Asia (+13.4%), Shinsegae (+14.8%) and the spin-off in Wharf Real Estate Investment (+10%), whilst detractors included China Travel (-12.5%) and Samsung Electronics (-7.8%). Most of the negative contribution from the Relative Value book came from the Fund's long/short position long SINA Corp/short Weibo Corp, however, Pengana continue to hold this position. In Japan, the Fund has entered into a long position in Kansai Pain / short Nippon Paint which contributed positively. The Fund's position in long Mitsui OSK / short Kawasaki Kisen was unwound with a positive contribution of 14 basis points. |
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Performance Report: Bennelong Long Short Equity Fund
14 Dec 2017 - Australian Fund Monitors
The Bennelong Long Short Equity Fund fell -1.14% in November. The Fund's annualised return since inception is +16.38% versus the ASX200 Accumulation Index's +8.13%.
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14 Dec 2017 - 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 | Performance in November reflected an even spread of positive vs negative pairs, however, the Fund's top contributors did not overcome the worst pair performers. These were: 1) long SEK / short NWS / short NEC; 2) long ALS / short AZJ; and 3) long Aristocrat / short Tabcorp. The most notable positive pair was long Origin / short CTX / short AGL, with Origin buoyed by a higher oil price and further announced cost reductions at its APLNG project. Bennelong noted the S&P500 has gained every single month in 2017 except in March when it fell -0.04%. There have only been three other calendar years in the entire history of the S&P500 Index (which commenced in 1923) where the Index has exhibited only one negative month. The Index normally has 3-6 negative months in any calendar year, hence Bennelong conclude the Index's trend in 2017 is consistent with other data showing a lack of volatility in the overall market such as the VIX Index. |
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