NEWS
Fund Review: Bennelong Long Short Equity Fund October 2017
7 Nov 2017 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available.
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7 Nov 2017 - Fund Review: Bennelong Long Short Equity Fund October 2017
By: Australian Fund Monitors
AFM Fund Review - October 2017 (pdf format)
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large large-caps from the ASX/S&P100 Index, with over fourteen-year track record and annualised returns of 16.56% p.a.
- The consistent returns across the investment history indicate the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 0.98 and 1.64 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - October 2017 (pdf format)
Performance Report: Insync Global Titans Fund
6 Nov 2017 - Australian Fund Monitors
The Insync Global Titans Fund rose +0.85% in September, taking annualised performance since inception in October 2009 to +9.43%.
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6 Nov 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 | Insync noted that cyclical stocks significantly outperformed quality stocks with the extreme moves mirroring last year's Trump rally. Positive contributors included eBay, Paypal, Visa, Cognizant Tech Solutions and Amadeus IT. The main negative contributors were Medtronic, Reckitt Benckiser, Oracle, Comcast and Heineken. During the quarter, Insync sold its holdings in Bank of New York Mellon and Philip Morris International whilst adding Stryker and Accenture to the portfolio. Insync believe, given the incremental spend on digitisation is forecast to increase by $5 trillion in the 5 years to 2020, the Fund's exposure to the 'Digitisation Megatrend' via its investments in Accenture and Cognizant Tech Solutions is likely to benefit the Fund. 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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Performance Report: Quay Global Real Estate Fund
3 Nov 2017 - Australian Fund Monitors
The Quay Global Real Estate Fund increased +1.3% in September. Since inception in July 2014, the Fund has outperformed its benchmark by +5.0% per annum.
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3 Nov 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 Manager highlighted Life Storage (LSI) as one of the Fund's top performers for the month, noting the significant loss of homes in Houston after Hurricane Harvey all but eliminated any excess supply in the Storage and Apartment markets. Among the largest detractors was American Campus Communities (US) as the company announced slightly weaker leasing headed into the school year, along with a significant acquisition ($590m) of seven student housing properties staged over the next two years. The Manager remains comfortable with their long-term themes including Affordable Accommodation, Healthcare and Storage. For the Mall operators, they noted the general sentiment was that the sell-off has been overdone, with many owners suggesting the worst of the bankruptcies was over. However, the Manager remains cautious for properties not deemed 'best in class'. |
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Performance Report: Touchstone Index Unaware Fund
3 Nov 2017 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +0.39% in September, taking annualised performance over the past 12 months to +9.63%.
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3 Nov 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 for the month included Mantra (+8.9%) and Bingo Industries (+4.8%). Detractors included Treasury Wine Estates (-5.5%) and QBE (-4.1%), however, the Manager noted Treasury Wine Estates contributed positively over the quarter (+5.0%). The Manager believes the drivers for an earnings uplift are in place for QBE, with signs that the insurance pricing cycle has turned up. The Manager highlighted the disappointing performance in the Australian equity market compared to global share markets over the past six months. They believe weakness in consumer spending, rising input costs and increased competition will continue to weigh on the outlook for earnings growth. The Manager foresees a challenging FY18 growth outlook for the Banking sector, they also anticipate that a decline in commodity prices will impact the Resources sector's profit outlook. The Manager's view remains unchanged that, given the heightened global uncertainty, the market remains vulnerable to an external shock and as such remain focused on downside protection. |
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Performance Report: Collins St Value Fund
2 Nov 2017 - Australian Fund Monitors
The Collins St Value Fund returned +1.83% in September, taking annualised performance since inception in February 2016 to +20.27%.
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2 Nov 2017 - Performance Report: Collins St Value Fund
By: Australian Fund Monitors
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| Fund Overview | The managers of the fund intend to maintain a concentrated portfolio of investments in ASX listed companies that they have investigated and consider to be undervalued. They will assess the attractiveness of potential investments using a number of common industry based measured, a proprietary in-house model and by speaking with management, industry experts and competitors. Once the managers form a view that an investment offers sufficient upside potential relative to the downside risk, the fund will seek to make an investment. If no appropriate investment can be identified the managers are prepared to hold cash and wait for the right opportunities to present themselves. |
| Manager Comments | Collins St note they spent much of the month investigating potential investment opportunities and continuing their due diligence on companies already owned. The average PE ratio of the Fund's equities holdings is 8.13x versus the market's 17.59x, indicating that the Fund invests in businesses trading at a significant discount to their underlying worth. At the end of the month, the portfolio comprised 80% ASX securities and 20% cash. Collins St noted the slightly larger cash position is due to the Fund having trimmed some of its positions, they believe the Fund remains well placed to take advantage of any opportunities that may arise. The Fund stands out as one of the few with zero management fees, charging performance fees only, ensuring the Manager's interests are aligned with investors'. |
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Performance Report: MHOR Australian Small Cap Fund
2 Nov 2017 - Australian Fund Monitors
The MHOR Australian Small Cap Fund returned +2.43% in September. Since inception in August 2016, the Fund has returned +8.53%.
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2 Nov 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 | Top performers during the month included Syrah Resources (+16%), SpeedCast International (+9%) and G8 Education (+6%). One major detractor was TopBetta Holdings (-20%), sold off sharply after an article referenced RBW Nominees, one of TopBetta's shareholders, and raised issues related to misappropriated client funds by one of their associates. MHOR view this as 'noise' with no change to the underlying fundamentals, they expect further positive market updates as their internally tracked numbers suggest TopBetta are on track to exceed their $75m turnover forecast. MHOR believe that, with earnings season out of the way, near-term market sentiment will likely be macro driven. Their view is that fundamentals remain supportive of global equities. MHOR remain confident that the Fund is well positioned to outperform its benchmark (ASX Small Ords) with a diversified portfolio leveraged to multiple structural growth themes and trends, as well as a number of overlooked classic value plays. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
1 Nov 2017 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +3.07% in September, taking annualised performance since inception in January 2009 to +17.74%.
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1 Nov 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 Fund's outperformance over the quarter benefited from strong returns from Reliance Worldwide, Flight Centre and Costa Group. Bennelong believe the market is underestimating the quality of Reliance Worldwide and Flight Centre, two of the most heavily shorted stocks on the ASX. The largest detractors were Domino's Pizza Enterprises and Aristocrat Leisure, as well as the Fund's underweight exposure to the strong performing Resources sector. Bennelong believe the market underestimates the longer-term growth prospects of Domino's Pizza Enterprises, they also foresee stronger than expected earnings growth and a lower PE multiple for Aristocrat Leisure. Bennelong identify a rise in interest rates as a major risk to the Australian stock market, their view is that rates may lift, but not dramatically. Their belief is that higher rates will be attributable to higher inflation, which is likely to result from factors relating to innovation, demographics and under-employment. |
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Fund Review: Insync Global Titans Fund September 2017
1 Nov 2017 - Australian Fund Monitors
Latest Fund Review on Insync Global Titans Fund is now available.
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1 Nov 2017 - Fund Review: Insync Global Titans Fund September 2017
By: Australian Fund Monitors
AFM Fund Review - September 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 - September 2017 (pdf format)
Performance Report: Bennelong Kardinia Absolute Return Fund
27 Oct 2017 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund increased +0.66% in September. Since inception in May 2006, the Fund has outperformed the ASX200 Accumulation Index by +5.41% per annum.
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27 Oct 2017 - 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 | Positive performers included South32 (+0.22%), RCR Tomlinson (+0.19%) and Costa Group (+0.15). Negative contributors included Amcor (-0.12%), BHP (-0.09%) and Evolution (-0.09%). The short book performed well, with Fortescue and Telstra the key contributors adding +0.2% for the month. Net equity market exposure, including derivatives, was reduced from 35.8% to 22.4% as the Manager sold their holdings in ANZ and NAB and added short positions in Fortescue and Share Price Index Futures. |
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Performance Report: Glenmore Australian Equities Fund
27 Oct 2017 - Australian Fund Monitors
The Glenmore Australian Equities Fund returned +3.05% in September, taking performance since inception in June 2017 to +13.42%.
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27 Oct 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 | Positive contributors for the month included Mastermyne (+29.6%), HUB24 (+20.0%), Fiducian Group (+12.5%), NRW Holdings (+12.2%), Appen (+11.7%) and Alliance Aviation Services (+5.9%). Detractors from performance included APA Group, Moelis Australia, Sydney Airport and Pinnacle Investments - however, the Manager notes that none were overly material, with no specific news flow released during the month. |
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