NEWS
The Paragon Fund
10 Nov 2015 - Australian Fund Monitors
The Paragon Fund rose 2.50% after fees for the month of October 2015, to bring annualised return since inception to 18.03%.
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10 Nov 2015 - The Paragon Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon believes that markets are not always efficient, exhibiting a common tendency to price securities well outside of their intrinsic value over the medium term. This market characteristic provides the opportunity for Paragon, an active manager with a flexible mandate, to generate superior investment returns over the longer term. Paragon believes that it is critical to understand both the companies and the industries in which they operate, in order to fully comprehend each investment opportunity. Accordingly, a fundamental approach to company research is taken. Assessing the potential downside is also paramount in framing the risk/reward trade-off for potential investments. |
| Manager Comments | Key positive contributors for October included Longs in Macquarie Group, Henderson Group, NetComm Wireless, APN Outdoor, and Amaysim while detractors included our short positions in general given the strong market. At the end of the month the Fund had 30 long positions and 15 short positions. Click below to read the latest Fund Manager's commentary. |
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Optimal Australia Absolute Trust
9 Nov 2015 - Australian Fund Monitors
Optimal Australia Absolute Trust rose 1.4% in October to bring annualised return to 9.15%.
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9 Nov 2015 - 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 was slightly net long invested during October, but reduced exposure into the rally. The Fund's return was very much driven by stock selection. The long positions strongly outperformed the market, with attribution of +4.1% on average long exposure of 52% of NAV. Key contributors included financials, retail, and commodity group. Short positions were difficult in such a strong market, with attribution of -2.1% on average short (stock) exposure of 29.4%. Click below to read the latest Fund Monthly Report. |
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Bennelong Long Short Equity Fund
6 Nov 2015 - Australian Fund Monitors
Bennelong Long Short Equity Fund rose 2.54% in October to bring latest 12 months return to 36.02%.
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6 Nov 2015 - 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 | The Fund performance featured 18 profitable pairs from a total of 31. Also, the top and bottom 3 pairs combined accounted for 13% of the net return, with 87% coming from the broader portfolio. Fund performance was soft over the first 3 weeks of the month on limited news flow, but then performed strongly in the last week from a wave of company specific trading updates. Click below to read the Fund Manager's commentary and future market outlook. |
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Meme Australian Share Fund
5 Nov 2015 - Australian Fund Monitors
Meme Australian Share Fund gained 7.12% compared to the ASX200 Accumulation Index's gain of 4.37%, an outperformance of 2.75% for the month of October.
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5 Nov 2015 - Meme Australian Share Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's investment strategy seeks to identify low-risk entry opportunities and then build positions in these stocks. Once established in the portfolio, individual stock holdings are maintained for as long as their long-term upward trend remains intact and while they continue to make positive contributions to portfolio growth. Positions are reduced and ultimately closed out as their trends become exhausted or as their relative long-term performance against the broad market weakens. The Fund believes that longer time frame investments also provide a number of advantages. The effect of false signals and 'noise' which attend shorter term time frames is mitigated by only attending to signals which are confirmed by our longer term assessments. Also, the Fund gains exposure to the more expansive price trends which can last for months and years, allowing dividends and distributions received during this time to further enhance portfolio returns. |
| Manager Comments | In October, some of the Fund's stronger performing stocks gave new opportunities and therefore the Fund increased these holdings. As a consequence the number of holdings in the portfolio decreased from 82 in the prior month to 79 stocks. The portfolio cash remained at about 1% and at month end the portfolio was fully invested. The Fund's bottom-up stock selection resulted in significant non-correlation to the broad market allocations.The top 10 holdings accounted for over 29% of the portfolio. By the end of October the stocks that met the Fund's strategy increased from 6.7% to 10.3% of the liquid stocks on the ASX, which the Fund expects will provide further investment opportunities. Click below to read the latest Fund Manager's commentary on the Fund. |
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Fund Review: Supervised High Yield Fund September 2015
3 Nov 2015 - Australian Fund Monitors
Fund review on Supervised High Yield Fund, a fixed income fund, is now available.
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3 Nov 2015 - Fund Review: Supervised High Yield Fund September 2015
By: Australian Fund Monitors
Supervised High Yield Fund AFM Review September 2015 (pdf format)
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 32years, 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 September 2015 (pdf format)
Fund Review: Insync Global Titans Fund September 2015
2 Nov 2015 - Australian Fund Monitors
Latest Fund Review on Insync Global Titans Fund is now available.
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2 Nov 2015 - Fund Review: Insync Global Titans Fund September 2015
By: Australian Fund Monitors
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 outperformed its benchmark MSCI All Country World ex-Australia Net Total Return Index ($A) by 1.4%, in September. The performance was driven by positive contributions from our holdings in Microsoft, BAT, Reckitt Benckiser, Nestle and McDonald's. The main negative contributors were Medtronic, Zimmer, 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.
KIS Asia Long Short Fund
30 Oct 2015 - Australian Fund Monitors
KIS Asia Long Short Fund rose 2.81% for the month of September, to outperform the AFM Asia Pacific ex-Japan Index by 5.70%.
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30 Oct 2015 - 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 Fund's annualised return since inception was 14.91% p.a. In comparison, the AFM Asia Pacific ex-Japan Index has an annualised returned of 2.68% p.a. The Fund has achieved this double-digit performance with lower volatility of 5.50% (Index 9.81%), to give notable Sharpe and Sortino ratios of 1.97 and 4.59 respectively. |
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Supervised High Yield Fund
30 Oct 2015 - Australian Fund Monitors
Supervised High Yield Fund rose 0.36% in September, to bring annualised performance since inception to 9.91% p.a.
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30 Oct 2015 - Supervised High Yield Fund
By: Australian Fund Monitors
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| Fund Overview | The fund may also invest in interest rate swaps, options over authorized investments and exchange traded futures contracts. All these will be either listed or traded in a market where they can be independently valued. Fundamental to the investment procedure is the tenet that no debt security will qualify for investment unless it can repay 100% of its principal and interest in a worst case economic scenario. |
| Manager Comments | More than half of the portfolio's composition (as a percentage of NAV) was invested in Residential Mortgage-Backed Securities (RMBS) 61.23%. The rest of the portfolio composition was in USD Corporate Loans at 21.62%, Cash at 13.04% and AUD Corporate Loans at 4.11%. The Fed's lack of action caused market participants to respond by reducing exposure to risk assets in favor of increasing exposure to safer investments. Sovereign Bonds rallied and US 10 year Treasury notes increased by 1.67%. The net effect of this market was relatively minor to the Fund. Click below to view the latest Fund Manager Report. |
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Fund Review: APN Asian REIT Fund September 2015
30 Oct 2015 - Australian Fund Monitors
September Fund Review is now available on APN Asian REIT Fund, a property securities fund, investing primarily in the Asian REITS.
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30 Oct 2015 - Fund Review: APN Asian REIT Fund September 2015
By: Australian Fund Monitors
APN Asian REIT Fund AFM Fund Review September 2015 (pdf format)
APN Asian REIT Fund
We would like to highlight the following aspects of the Fund;
- APN is an ASX-listed fund manager specialising in property investment, with an investment team of six. Established in 1996, APN now has FUM of $A2.1bn including four REIT (Real Estate Investment Trust) funds.
- The APN Asian REIT Fund (Fund) is a property securities fund that invests in a quality portfolio of Asian REITs, listed on the securities exchanges of the Asian Region, with the ability to hold some cash and fixed interest investments.
- The Fund aims to deliver a competitive yield with lower risk than the market. The underlying stocks are selected based on a highly disciplined investment approach that focuses on the fundamentals and number of valuation approaches. The universe can include new IPO's, other corporate actions take place and / or corporate governance improvements at country or REIT level bring new stocks into focus.
- The Fund provides access to a wide spread of property-based revenue streams that are specifically analysed, selected and weighted with the aim of delivering strong and sustainable income returns. The Fund is an unhedged product.
- APN's Asian REIT Fund invests in a portfolio of 25-40 listed Asian REITs with a core philosophy of investing in properties with a sustainable rental income streams.
- The Fund has delivered an annalised return of 17.74% p.a., since inception in July 2011 with standard deviation of 9.15% p.a. The Sharpe and Sortino ratios are 1.51 and 2.89 respectively.
APN Asian REIT Fund AFM Fund Review September 2015 (pdf format)
Cor Capital Fund
29 Oct 2015 - Australian Fund Monitors
For the month of September, Cor Capital Fund returned -0.66%.
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29 Oct 2015 - Cor Capital Fund
By: Australian Fund Monitors
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| Fund Overview | The Cor Capital Fund is a Multi- Asset Fund which combines a pre-determined strategic asset allocation with active but systemised rebalancing to generate returns and manage volatility whilst maintaining transparency and liquidity. The Fund strategy is not reliant on accurate market predictions, forecasts or timing for success. Returns are generated in a number of ways; 1) by maintaining sufficiently large positions in a diverse group of asset classes, 2) via the 'volatility harvesting' consequences of active rebalancing, and 3) from the offsetting behaviour of certain asset classes under specific conditions. The combined portfolio is expected to exhibit relatively low volatility and low turnover. In the interests of avoiding complexity, maintaining liquidity, and minimising reliance on third parties, the Fund strategy does not employ gearing, derivatives or short-selling. |
| Manager Comments | The greatest positive influence on the portfolio was the gold bullion allocation (+5% for the quarter) which tends to do relatively well when paper currencies fall. The equities weakness was offset by strength in investment grade bonds (+2% for the quarter) in anticipation of lower future interest rates. The portfolio's asset allocation as of 30 September was 25.3% in Gold, 25.4% in Fixed Interest, 24% in Equities and rest in cash at 25.3%. Click below to read the Fund's latest quarterly report. |
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