NEWS
Performance Report: Paragon Australian Long Short Fund
5 Oct 2017 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +7.0% in September, taking annualised performance since inception in February 2013 to +14.4%.
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5 Oct 2017 - Performance Report: Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market. |
| Manager Comments | Performance for September was driven by several positions from the Fund's Electric Vehicle thematic, New Century Zinc and Lend Lease, and short positions in Newcrest, Telstra, Select Harvest and Perpetual. At the end of the month the Fund had 36 long and 14 short positions. Paragon noted that the Fund's Electric Vehicle (EV) thematic has been its best contributor to date and, in their view, is a theme with significant growth potential. The latest report details global sentiment surrounding the transition from internal combustion engines to EV and, consequently, several automobile companies' significant investments in Lithium and Cobalt. While Paragon expects Lithium and Cobalt to perform strongly going forward, they have also forecast bull markets in Copper, Graphite/Graphene and Nickel. Paragon believes the Fund is well positioned in these sectors. |
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Performance Report: Bennelong Australian Equities Fund
5 Oct 2017 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +2.66% in August. Since Inception in January 2009, the Fund has returned +13.43% per annum, outperforming its benchmark (ASX300 Accumulation Index) by +2.90% per annum.
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5 Oct 2017 - 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 | Between the end of July and the end of August, the Fund has increased its weightings in the Industrials, REIT's, Consumer Staples and Materials sectors whilst decreasing its weightings in the Discretionary, Health Care, Utilities and Financials sectors. |
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Performance Report: Quay Global Real Estate Fund
4 Oct 2017 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +0.9% in August, taking performance since inception to +14.3% per annum.
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4 Oct 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 | The biggest contributors for the month were Store Capital (US) and CyrusOne (US), while Scentre Group (Aus) and Safestore (UK) detracted from performance. Geographically, Hong Kong and Germany were the best performers while Japan and the US lagged. The portfolio remained broadly unchanged during the month. The Manager noted that the local currency has acted as a significant headwind for AUD reported returns over the past two years. On a constant currency basis, total annualised returns for the Fund have been +9.8%, with currency deducting almost 4% per annum. The Manager believes that, over time, currency has a diminished impact on total returns due to their 'mean-reverting' nature. |
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Performance Report: Insync Global Titans Fund
4 Oct 2017 - Australian Fund Monitors
The Insync Global Titans Fund ended August up +1.02% after fees and protection, taking annualised performance since inception to +9.42%.
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4 Oct 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 | Positive performers include PayPal, Visa, Microsoft, Diageo and Unilever. The main negative contributors were Stryker Corp, Reckitt Benckiser, Medtronic, Walt Disney Co and Priceline.com Inc. The Fund's only outright sell during the month was Nestle based on valuation, the Fund has held the stock since inception. New buys during the month include Stryker and Accenture, Insync believes both are well positioned to benefit from growth in their respective sectors. 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. |
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Fund Review: Insync Global Titans Fund August 2017
3 Oct 2017 - Australian Fund Monitors
Latest Fund Review on Insync Global Titans Fund is now available.
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3 Oct 2017 - Fund Review: Insync Global Titans Fund August 2017
By: Australian Fund Monitors
AFM Fund Review - August 2017 (pdf format)
INSYNC GLOBAL TITANS FUND
Attached is our most recently updated Fund Review on the Insync Global Titans Fund.
We would like to highlight the following:
- The Global Titans 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 - August 2017 (pdf format)
Performance Report: Bennelong Concentrated Australian Equities Fund
29 Sep 2017 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund increased 2.99% in August, outperforming the ASX300 Accumulation Index by +2.24%.
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29 Sep 2017 - 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 | The latest report shows that the portfolio's weightings have increased in the Consumer Staples, Industrials and Materials sectors, and decreased in the Discretionary, Health Care and Financials sectors. The portfolio held 21 stocks at the end of August, up from 19 at the end of July. |
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Performance Report: Touchstone Index Unaware Fund
29 Sep 2017 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +0.11% in August, taking performance over the past 12 months to +9.72%.
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29 Sep 2017 - 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 | Positive performers included Treasury Wine (+20%) and Wesfarmers (+7.7%), while the Fund also benefited from not holding CBA (-6.9%). Negative performers included insurance companies QBE (-10.1%) and IAG (-3.9%). Given QBE is now trading at a discount of more than 20% to global peers, drivers for an earnings uplift are in place and the company has now initiated a $1bn buyback. Touchstone believe the rising AUD will be a headwind for companies with USD earnings. They also anticipate that commodity prices will decline, tempering their profit outlook for the resources and materials sector. Against this backdrop, their view is that valuations remain high and vulnerable to pullback. Given this, Touchstone's thesis remains unchanged that given the heightened uncertainty, the market remains vulnerable to an external shock, and as such they remain cautious. |
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Performance Report: Glenmore Australian Equities Fund
29 Sep 2017 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +7.03% in August, outperforming the ASX200 Accumulation Index by +6.32%.
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29 Sep 2017 - 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 | Performance across the portfolio was evenly spread, with 14 out of 30 stocks returning more than 5% for the month. Top performers included NRW Holdings (+63.4%), Moelis Australia (+33%), Pacific Current (+15.4%) and Sydney Airport (+10%). The Manager notes that there were few negative contributors aside from Auckland Airport (-5.7%). This result was in line with market expectations, however, Glenmore expects the company will earn a commercial return on its upcoming growth capex (NZ$2.4B from FY18-22). |
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Performance Report: MHOR Australian Small Cap Fund
29 Sep 2017 - Australian Fund Monitors
The MHOR Australian Small Cap Fund returned +1.30% for August, taking annualised performance since inception to +5.95%.
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29 Sep 2017 - Performance Report: MHOR Australian Small Cap Fund
By: Australian Fund Monitors
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| Fund Overview | MHOR looks for investment that exhibit the following set of characteristics: -Opportunity - to take advantage of growth and positive alignment with industry themes and trends. -Quality business - competitively advantaged product or service offering. -Financial flexibility - appropriately resourced to capture its opportunity. -Management - with the vision and capability to bring it all together. -Fundamentally undervalued. MHOR also considers labour standards, environmental, social and ethical considerations when making investment decisions but only to the extent that these factors impact the assessment of risk or return. The minimum suggested investment timeframe is 3-5 years. |
| Manager Comments | Three of the largest contributions came from Imdex (+23%), Alliance Aviation Services (+9%) and NextDC (+11%). The major detractor for the month was TopBetta Holdings (-7%), however, MHOR's view is that the stock continues to demonstrate strong positive momentum and they see numerous catalysts ahead which should drive the stock price higher. MHOR note in their latest report that Small Cap equities outperformed Large Caps during August (XSAOI +2.71% vs ASX100 -0.31%), underpinned by strong gains in smaller resources (XSR +6.85%) and a solid uplift in smaller industrials (XSI +1.42%). MHOR remain of the view that the Fund is well positioned to outperform the ASX Small Ordinaries Index with a diverse portfolio of stocks leveraged to multiple structural growth themes and trends, as well as a number of overlooked classic value plays. |
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Performance Report: Allard Investment Fund
26 Sep 2017 - Australian Fund Monitors
The Allard Investment Fund increased +2.26% in August, taking annualised performance since inception to +9.21%.
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26 Sep 2017 - Performance Report: Allard Investment Fund
By: Australian Fund Monitors
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| Fund Overview | Allard's investment approach has remained consistent throughout their history: That is to invest prudently but proactively in well-managed businesses that achieve superior returns on capital in industries with long-term growth potential. The Manager uses both broad top-down guidance and detailed bottom-up analysis to identify suitable markets, industries and companies. Although long only investors, a critical factor in their strategy and performance is the ability to hold cash when they cannot find companies that meet their criteria or are at a sufficient discount to their valuations. |
| Manager Comments | The Fund's latest report shows that holdings in cash and fixed income have increased to 23.7% of the portfolio, up from 17.6% as at the end of July, whilst all other holdings aside from those in the utilities sector have decreased. The portfolio remains highly concentrated, with 38.3% of NAV held in the Fund's top 5 stocks. Geographically, Hong Kong and China make up most of the portfolio (44.3%), followed by India (12.3%), Singapore (11.5%), Korea (5.6%), Vietnam (1.6%) and Indonesia (1.0%). |
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