NEWS
18 Aug 2021 - Performance Report: Cyan C3G Fund
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | The fund's down-capture ratio for returns since inception is 51.75%. Over all other periods, the fund's down-capture ratio has ranged from a high of 123.68% over the most recent 12 months to a low of 76.77% over the latest 60 months. A down-capture ratio less than 100% indicates that, on average, the fund has outperformed in the market's negative months over the specified period. The fund's Sharpe ratio has ranged from a high of 1.21 for performance over the most recent 12 months to a low of 0.31 over the latest 36 months, and is 0.89 for performance since inception. By contrast, the ASX Small Ordinaries Total Return Index's Sharpe for performance since August 2014 is 0.55. Its Sortino ratio (which excludes volatility in positive months) has ranged from a high of 2.86 for performance over the most recent 12 months to a low of 0.26 over the latest 24 months, and is 1.24 for performance since inception. By contrast, the ASX Small Ordinaries Total Return Index's Sortino for performance since August 2014 is 0.66. |
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18 Aug 2021 - Performance Report: Bennelong Concentrated Australian Equities Fund
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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 returns over the past 12 months have been achieved with a volatility of 10.39% vs the index's 10.35%. The annualised volatility of the fund's returns since inception in January 2009 is 14.85% vs the index's 13.54%. Over all other periods, the fund's returns have been more volatile than the index. The fund's Sharpe ratio has ranged from a high of 3.39 for performance over the most recent 12 months to a low of 0.72 over the latest 36 months, and is 1.01 for performance since inception. By contrast, the ASX 200 Total Return Index's Sharpe for performance since February 2009 is 0.65. Since inception in January 2009 in the months where the market was positive, the fund has provided positive returns 92% of the time, contributing to an up-capture ratio for returns since inception of 154.93%. Over all other periods, the fund's up-capture ratio has ranged from a high of 139.89% over the most recent 24 months to a low of 118.32% over the latest 36 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period. |
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18 Aug 2021 - Fund Review for FY21
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Fund Review for FY21, China's regulatory crackdown and Square's acquisition of Afterpay Frazis Capital Partners August 2021 |
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Michael Frazis, Managing Partner at Frazis Capital Partners presents the Fund Review performance for 20/21, touching on the Chinese regulatory crackdown and the acquisition of Afterpay by Square Inc.
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18 Aug 2021 - An Deeply Unloved Sector and Deep Value Investing
17 Aug 2021 - Performance Report: Airlie Australian Share Fund
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| Fund Overview | The Fund is long-only with a bottom-up focus. It has a concentrated portfolio of 15-35 stocks (target 25). Maximum cash holding of 10% with an aim to be fully invested. Airlie employs a prudent investment approach that identifies companies based on their financial strength, attractive durable business characteristics and the quality of their management teams. Airlie invests in these companies when their view of their fair value exceeds the prevailing market price. It is jointly managed by Matt Williams and Emma Fisher. Matt has over 25 years' investment experience and formerly held the role of Head of Equities and Portfolio Manager at Perpetual Investments. Emma has over 8 years' investment experience and has previously worked as an investment analyst within the Australian equities team at Fidelity International and, prior to that, at Nomura Securities. |
| Manager Comments | The fund's returns over the past 12 months have been achieved with a volatility of 10.81% vs the index's 10.35%. The annualised volatility of the fund's returns since inception in June 2018 is 16.45% vs the index's 16.91%. Over the past 24 and 36 month periods, the fund's returns have had an annualised volatility of 19.04% and 16.82% respectively, lower than the index's annualised volatility over both periods; 19.82% (24 months), 17.32% (36 months). Since inception in June 2018 in the months where the market was positive, the fund has provided positive returns 100% of the time, contributing to an up-capture ratio for returns since inception of 111.87%. Over all other periods, the fund's up-capture ratio has ranged from a high of 123.18% over the most recent 12 months to a low of 111.18% over the latest 36 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period. The fund's down-capture ratio for returns since inception is 95.6%. Over all other periods, the fund's down-capture ratio has ranged from a high of 95.6% over the most recent 36 months to a low of 87.12% over the latest 24 months. A down-capture ratio less than 100% indicates that, on average, the fund has outperformed in the market's negative months. |
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17 Aug 2021 - Performance Report: AIM Global High Conviction Fund
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| Fund Overview | AIM are 'business-first' rather than 'security-first' investors, and see themselves as part owners of the businesses they invest in. AIM look for the following characteristics in the businesses they want to own: - Strong competitive advantages that enable consistently high returns on capital throughout an economic cycle, combined with the ability to reinvest surplus capital at high marginal returns. - A proven ability to generate and grow cash flows, rather than accounting based earnings. - A strong balance sheet and sensible capital structure to reduce the risk of failure when the economic cycle ends or an unexpected crisis occurs. - Honest and shareholder-aligned management teams that understand the principles behind value creation and have a proven track record of capital allocation. They look to buy businesses that meet these criteria at attractive valuations, and then intend to hold them for long periods of time. AIM intend to own between 15 and 25 businesses at any given point. They do not seek to generate returns by constantly having to trade in and out of businesses. Instead, they believe the Fund's long-term return will approximate the underlying economics of the businesses they own. They are bottom-up, fundamental investors. They are cognizant of macro-economic conditions and geo-political risks, however, they do not construct the Fund to take advantage of such events. AIM intend for the portfolio to be between 90% and 100% invested in equities. AIM do not engage in shorting, nor do they use leverage to enhance returns. The Fund's investable universe is global, and AIM look for businesses that have a market capitalisation of at least $7.5bn to guarantee sufficient liquidity to investors. |
| Manager Comments | The fund's Sharpe ratio is 2.73 for performance over the past 12 months, and over the past 24 months is 1.69. Since inception, the fund's Sharpe ratio is 1.72 vs the Global Equity Index's Sharpe of 1.42. Since inception in July 2019 in the months where the market was positive, the fund has provided positive returns 88% of the time, contributing to an up-capture ratio since inception of 104.81%. For performance over the past 12 month, the fund's up-capture ratio is 108.86%, and is 108.59% over the past 24 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period. The fund has a down-capture ratio since inception of 74.34%. A down-capture ratio less than 100% indicates that, on average, the fund has outperformed in the market's negative months. |
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17 Aug 2021 - Why this is an undervalued long-term winner
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Why this is an undervalued long-term winner Chris Demasi, Montaka Global Investments July 2021 PART-II (for Part I, see Newsfeed 2-August) Why this is an undervalued long-term winner As we discussed in Part-I of this series, REA Group holds the most privileged position of any company in Australian real-estate. While officially it is solely focused on helping real-estate agents do their job better, rather than replacing them in the value chain, one cannot help but be somewhat skeptical of the official narrative. Given the natural progression of a genuine two-sided marketplace like REA Group, it is likely to continue reducing friction costs of buying, selling, and renting properties for customers and it is likely to capture a larger share of transaction economics over time. Similar to other internet enabled marketplaces that have served perform functions (e.g. Amazon, eBay, Uber, etc). To put some numbers around the potential opportunity for REA Group, broker commissions in Australia are currently 1.0-2.5% of the sale price of a property, while advertising costs are only 0.2-0.4%. To the extent REA Group continues to migrate towards a clearinghouse function, providing increasing value to customers, we would expect this gap to close and deliver an order of magnitude increase in the earnings potential for the business. Additionally, COVID-19 has accelerated and reinforced the central role REA Group plays in the Australian property market and the online future of the industry by accelerating the introduction of products and services that are years ahead of their time (virtual tours, online auctions, payment on sale, etc). Furthermore, there are 1.8 million active users logged-in to REA Group's portal which is growing rapidly, translating into significant data advantages and increasingly attachable insights on buyers, sellers, and renters. This drives a more enjoyable and seamless property experience for customers through a virtuous loop (aka flywheel) in which REA connects consumers of property with providers of property, aggregating both supply and demand, reducing frictions, increasing choice and delivering superior value, with benefits compounding as both supply and demand scales (network effects). REA Group's Property Flywheel Source: REA Group In terms of its structure, REA Group's business is segmented Residential and Commercial real-estate make up ~67% and ~15% of total revenues respectively (~82% combined), with each segment consisting of agent subscriptions (~7% of segment) and property listing fees on the platform (~93% of segment). Additionally, with 115 million average monthly visits to its website, REA Group has a significant advertising platform along with a unique set of data insights on the property market, which it sells, these businesses are largely contained within the Media and Data segment (~10% of total revenue). Given its unique view into the Australian property market, REA Group has started to deepen its role in transactions. To date this has largely been through the provision of Financial Services and taken the form of mortgage broking. In fact, this focus is set to increase with the recent acquisition of leading Australian mortgage broker, Mortgage Choice for A$244mm (March 2021), this segment currently contributes ~3% of total revenues however will likely become more significant over time. REA Group Revenues (LTM December 2020): A$810 million Source: MGI Finally, REA Group has several strategic interests ("real options") in some of the largest and fastest growing property markets in the world, particularly in Asia. While the businesses within this portfolio are at an early stage, they address large populations and have significant runway, including the leading property portal in Malaysia, prominent portals in India, China, Indonesia, Hong Kong, Thailand and Singapore. In addition to the Asian investments, REA Group owns a 20% interest in Move (realtor.com), one of the leading property portals in the United States, which rounds out a global footprint spanning three continents. Global Footprint Spanning Three Continents Source: REA Group At Montaka Global we believe in owning the long-term winners in attractive markets, while they remain undervalued, we firmly believe REA Group comfortably fits within these criteria. Montaka owns shares in REA group. Funds operated by this manager: Montaka Global 130/30 Fund, Montaka Global Fund, Montaka Global Long Only Fund |
16 Aug 2021 - Performance Report: Paragon Australian Long Short Fund
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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 | The fund's Sortino ratio (which excludes volatility in positive months) has ranged from a high of 1.45 for performance over the most recent 12 months to a low of 0.32 over the latest 60 months, and is 0.86 for performance since inception. By contrast, the ASX 200 Total Return Index's Sortino for performance since March 2013 is 0.7. Since inception in February 2013 in the months where the market was positive, the fund has provided positive returns 68% of the time, contributing to an up-capture ratio for returns since inception of 90.38%. Over all other periods, the fund's up-capture ratio has ranged from a high of 182% over the most recent 24 months to a low of 95.67% over the latest 60 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period. The fund's down-capture ratio for returns since inception is 74.72%, highlighting its capacity to outperform in negative markets over the long-term. |
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16 Aug 2021 - Performance Report: Bennelong Australian Equities Fund
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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 | The fund's returns over the past 12 months have been achieved with a volatility of 11.19% vs the index's 10.35%. The annualised volatility of the fund's returns since inception in January 2009 is 14.51% vs the index's 13.54%. Over all other periods, the fund's returns have been more volatile than the index. The fund's Sharpe ratio has ranged from a high of 3.38 for performance over the most recent 12 months to a low of 0.89 over the latest 36 months, and is 0.9 for performance since inception. By contrast, the ASX 200 Total Return Index's Sharpe for performance since February 2009 is 0.65. Since inception in January 2009 in the months where the market was positive, the fund has provided positive returns 93% of the time, contributing to an up-capture ratio for returns since inception of 144.11%. Over all other periods, the fund's up-capture ratio has ranged from a high of 151.92% over the most recent 24 months to a low of 136.91% over the latest 36 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period. |
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16 Aug 2021 - Managers Insights | Collins St Asset Management
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Chris Gosselin, CEO of Australian Fund Monitors, speaks with Vasilios Piperoglou, Co-Founder & Head Analyst at Collins St Asset Management. The Collins Street Value Fund has been operating since February 2016 and has delivered an annualised return since then of 19% vs the ASX200 Total Return Index's annualised return over the same period of 11.67%. Over the past 12 months, the Fund has risen +60.6%, outperforming the Index by +32%. The Fund's capacity to outperform in falling and volatile markets is highlighted by its Sortino ratio (since inception) of 1.41 vs the Index's 0.96 and down-capture ratio of 38.3%.
Collins St Asset Management just opened Collins St Special Situation Fund No. 1 applications. Offer to invest in a basket of global listed securities in the oil services industry. The fund is only available to new investors with a minimum investment amount of $250,000. Applications will close at midnight of 31 August, 2021.
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