NEWS
Alexander Credit Opportunities Fund
11 Mar 2016 - Australian Fund Monitors
Alexander Credit Opportunities Fund returned +0.55% for the month of February.
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11 Mar 2016 - Alexander Credit Opportunities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may also invest in derivatives for hedging purposes. The portfolio of the Fund comprises primarily Investment Grade holding of 75% of the Fund's assets. Benchmark allocations are Australasia 50% to 100%, North America 0% to 50% and Europe 0% to 50%. Currency hedging may take place depending on benefits to the Fund. |
| Manager Comments | For February majority of the Fund's portfolio composition was in Residential Mortgage Backed Securities (RMBS) at 53%, followed by Short-dated loans at 20%. For 2016, the asset class that has performed well for the Fund is government bonds. The price of the 10 year Australian government bond for instance started the year at 112 and rose 4.4% to 117 in mid-February. Though the Fund does not invest in government bonds or take interest rate risk generally (all of its assets are floating rate notes) but it does look to hedge market volatility via other methods. This has helped the Fund achieve positive returns for the first two months of the year. |
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Morphic Global Opportunities Fund
11 Mar 2016 - Australian Fund Monitors
Morphic Global Opportunities Fund fell 2.24% in February, underperforming its benchmark (MSCI AC World Total Return in Australian Dollars), which fell 1.65%, by 0.59%.
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11 Mar 2016 - Morphic Global Opportunities Fund
By: Australian Fund Monitors
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| Manager Comments | For February, the market exposure was managed closely, with cash reaching a peak of 15%, before returning to mostly full invested. The biggest cause of underperformance was the style rotation. The US bank holdings accounted for almost all of the Fund's underperformance. The Fund had three notable winners for the month - the US health insurer Cigna, Australian miner Fortescue and Tokyo based housing developer Open House. Value was also added through hedging some of the currency exposure into the Japanese Yen. For March, the Fund began fully invested. Click below to read more. |
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Bennelong Long Short Equity Fund
10 Mar 2016 - Australian Fund Monitors
Bennelong Long Short Equity Fund rose 2.37%, against the S&P/ASX 200 Accumulation Index which fell 1.76%.
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10 Mar 2016 - 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. |
| Manager Comments | Positive contributing pairs outnumbered loss-making pairs. The top contributors over the month was the long Seek / short Fairfax pair. The Fund continues to hold this pair. This pair was unprofitable last year, however Seek's increased investment spending improved top-line growth, and this came to fruition in the recent interim financial result. In contrast, Fairfax's interim financial result prompted earnings downgrades due to growing evidence that Fairfax is not sufficiently monetising it's digital audience to overcome continued declines across its print advertising publications. On the other side, a key negative contributor for the month was the long Ramsay / short Primary Healthcare pair. While, Ramsay delivered a quality result with (again) an upgrade to full year earnings guidance, Primary staged a strong rally following relief after it's financial result that a capital raising was not necessary. Click below to read the Fund Manager's commentary and market outlook. |
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Optimal Australia Absolute Trust
9 Mar 2016 - Australian Fund Monitors
Optimal Australia Absolute Trust recorded a positive 0.8% return in February, against another tough month in Australian equities, with the ASX 200 Accumulation Index down by 1.76%.
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9 Mar 2016 - Optimal Australia Absolute Trust
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. |
| Manager Comments | The Fund entered February with net long exposure, at 9% of NAV, and with a higher beta skew towards the Resources complex. The Fund's stock selection worked well during the month, as mean reversion finally paid. No multiple and no commodity exposure was low enough to be investible. In the current earning season, the Fund's strike rate on their higher conviction investments was generally good, despite one bad earnings miss in retail. The investment team continues to believe the recent market volatility is here to stay and therefore will continue to focus on stock opportunities, with limit the exposure to the market risk. Click below to read the latest Fund monthly report. |
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Fund Review: Insync Global Titans Fund January 2016
8 Mar 2016 - Australian Fund Monitors
Latest Fund Review on Insync Global Titans Fund is now available.
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8 Mar 2016 - Fund Review: Insync Global Titans Fund January 2016
By: Australian Fund Monitors
Isync - AFM Fund Review January 2016 (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 Fund increased by 0.2% in January. The performance was driven by positive contributions from their holdings in Time Warner, McDonald's, Microsoft and Unilever. The main negative contributors were Express Scripts, eBay and McGraw- Hill. 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. .
- 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.
Isync - AFM Fund Review January 2016 (pdf format)
Newgate Real Estate and Infrastructure Fund
7 Mar 2016 - Australian Fund Monitors
Newgate Real Estate And Infrastructure Fund returned -0.24% for the month of January.
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7 Mar 2016 - Newgate Real Estate and Infrastructure Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's research use detailed analysis of the underlying assets integrated with financial analysis to determine a sustainable yield and fundamental DCF valuation for the security. Also the Fund believes in having a strong risk control framework. The Fund will also use trading strategies via rebalancing of core portfolio positions as well as taking advantage of shorter duration inefficiencies in markets caused by an imbalance in demand and supply for global REIT and Infrastructure securities. The Fund focuses on generating absolute returns after fees of 12 to 15% pa over the medium to long term. The long-short nature of the Fund combined with Newgate's rigorous investment process ensures returns generated by the Fund are largely independent of rising or falling markets. Newgate is focused on providing investment opportunities primarily within core, value-add, opportunistic and development sectors of direct property and across listed and unlisted real estate and infrastructure securities. The Fund's investment team consists of Tim Hannon, Campbell McComb, Darren Brusnahan, Nishant Narayanaswamy and Nicole Merrillees. |
| Manager Comments | The Fund maintained a very conservative position over the month given heightened volatility in global markets. As a result, there were no material contributors or detractors. The fund held a heavy cash weight (90% of Fund net asset value), an average around 5 positions. Positive contributors to the portfolio were Mirvac Group (MGR) and Sydney Airport (SYD. Negative contributors were Folkestone Group (FLK) and Invest Office Fund (IOF). Click Manager's Report to read more. |
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KIS Asia Long Short Fund
2 Mar 2016 - Australian Fund Monitors
KIS Asia Long Short Fund returned -0.41% for the month of January.
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2 Mar 2016 - 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 | The Special Situations strategy generated a profit of 43bp. The main driver of this positive returns was the Fund's positioning and active trading of Singapore Airlines (SIAL.SI) approach for the minority stake of Tiger Airways (TAHL.SI) it did not already own. Other strategies such as the long short and the portfolio hedge strategies detracted from the month's performance. To read more, click below for Fund's Monthly performance report. |
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Insync Global Titans Fund
1 Mar 2016 - Australian Fund Monitors
The Insync Global Titans Fund returned a positive 0.21%, compared to the MSCI All Country World ex-Australia Net Total Return Index in $A, which returned -3.30%, outperforming by 3.51%.
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1 Mar 2016 - 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 | The performance was driven by positive contributions from our holdings in Time Warner, McDonald's, Microsoft and Unilever. The main negative contributors were Express Scripts, eBay and McGrawHill. 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. Click below to read the latest Fund Manager Report. |
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Fund Review: Supervised High Yield Fund January 2016
29 Feb 2016 - Australian Fund Monitors
Fund review on Supervised High Yield Fund, a fixed income fund, is now available.
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29 Feb 2016 - Fund Review: Supervised High Yield Fund January 2016
By: Australian Fund Monitors
Supervised High Yield Fund AFM Review January 2016 (pdf format)
SUPERVISED HIGH YIELD FUND
Attached is AFM's updated Fund Review on the Supervised High Yield Fund.
We would like to highlight the following aspects of the Fund:
- The Supervised High Yield Fund (SHYF) has a 6 year track record investing in fixed interest investments. The Investment strategy aims to deliver returns with zero correlation to equity markets by investing in debt securities with minimal default probability and offering a premium return above the risk free rate.
- The Fund is managed by Philip Carden whose experience in debt and capital markets spans over 33 years, including time with JB Were's Capel Court Securities and Macquarie Bank, where he was the Executive Director responsible for the Debt Markets Division.
- SHYF is an Alternative Income fund which invests in Global and Australian debt markets, with all foreign currency receivables hedged back to Australian dollars.
- The Fund utilises a top down analysis of the economic environment and market to screen and identify debt market opportunities which it believes offer low risk with high yield. The next stage is the development of a risk matrix and investment strategy, following which detailed research is undertaken on specific investment opportunities which meet the pre-defined criteria established in the investment strategy.
- Prior to approving an investment for the Fund each potential investment is subject to two stress tests. The first of these is for credit and default risk, in which the investment is stress-tested to ensure that in a worst case economic environment it can repay 100% of its principal and interest obligations case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided The second test examines market risk. In this case Carden looks at the worst case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided.
Supervised High Yield Fund AFM Review January 2016 (pdf format)
Fund Review: Totus Alpha Fund January 2016
25 Feb 2016 - Australian Fund Monitors
January Fund Review with key statistics for Totus Alpha Fund is now available.
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25 Feb 2016 - Fund Review: Totus Alpha Fund January 2016
By: Australian Fund Monitors
Totus Alpha Fund AFM Fund Review January 2016 (pdf format)
TOTUS ALPHA FUND
Attached is our most recently updated Fund Review on the Totus Alpha Fund.
We would like to highlight the following aspects of the Fund;
- Totus Capital is a Sydney based long short fund manager established in 2012 by Ben McGarry which aims to place equal emphasis on performance and capital preservation. The Fund invests mainly in Australia, but also in other developed economies, with a primary exposure to equity markets.
- The Totus Alpha Fund's investment strategy is to identify structural themes, and then seek to drive performance by investing in securities that have concentrated exposure to those themes. Single stock short positions are used to generate alpha, frequently in under researched parts of the market such as the small and mid-cap space. Index derivatives are used to hedge the portfolio's market risk.
- McGarry qualified as a Chartered Accountant with PWC in 1999 and has 15 years market experience, commencing his career covering European building materials and construction sectors at Morgan Stanley in London. Previous experience included analytical roles at Ausbil, a Sydney based $10bn+ long-only manager, and sell side emerging companies experience at UBS. McGarry's emerging company research with UBS included exposure to a range of sectors including energy, materials, industrials, tech, financials, retail and telecommunications.
- The Fund has delivered an annalised return of 32.05% since inception in March 2012 as compared to 8.44% for the ASX 200 Accumulation Index. The standard deviation has been higher than the Index at 13.88% as compared to 12.39% and the Sharpe ratio is 1.90.
Totus Alpha Fund AFM Fund Review January 2016 (pdf format)
