NEWS
The Paragon Fund
20 Mar 2014 - Australian Fund Monitors
The Paragon Fund returned 3.80% for February, with a net exposure of 73.6%, and 21.72% for the previous twelve months.
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20 Mar 2014 - The Paragon Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon accepts that markets are not always efficient in pricing information into securities and that no one investment style works in every stage of the investment cycle. Subsequently Paragon adopts a top down thematic led approach to identify companies exhibiting sustainable or improving returns on capital driven by volume growth, pricing power and competitive advantages. Paragon utilises both quantitative analysis to provide probability weighted high/low/base case valuations and qualitative analysis in assessing management, the business model and likely direction of returns. Paragon will allocate assets to each investment opportunity based on a risk/reward profile. Positions have defined investment parameters and risk limits, which are then monitored on an ongoing basis. |
| Manager Comments | Key drivers of the Paragon Fund performance for February included a combination of: Strong returns from core holdings G8 Education, Donaco, and an emerging Copper investment, and, Increasing the net equity exposure from 50% at the beginning of the month to 74% by month-end. |
| More Information | » View detailed profile of this fund |
Insync Global Titans Fund
19 Mar 2014 - Australian Fund Monitors
Insync Global Titans Fund benefited from stronger equity markets during February returning 2.39% and 24.17% over the year with a notable down capture ratio of -0.84.
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19 Mar 2014 - Insync Global Titans Fund
By: Australian Fund Monitors
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| Manager Comments | The Manager comments 'Despite the weaker US data, rising geopolitical tensions in the Ukraine and some economic uncertainties in China, markets chose to look through it all, seemingly comfortable in the belief that central banks around the world will come to the rescue again if necessary. The Fund's unit price increased by 2.4% in February. The solid performance was fairly broadly based across the portfolio, with the biggest positive contributions coming from our holdings in Reckitt Benckiser, BAT, GlaxoSmithKline, BSkyB and DirecTV. Small negative contributions came from Comcast, Safran and Zimmer Holdings. The Fund continues to have no foreign currency hedging in place.' |
| More Information | » View detailed profile of this fund |
Pengana Australian Equities Market Neutral Fund
18 Mar 2014 - Australian Fund Monitors
Pengana Australian Equities Market Neutral Fund returned 2.90% during February with a net market exposure of 2.7% and 12.85% over the preceding twelve months.
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18 Mar 2014 - Pengana Australian Equities Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The manager's investment approach is premised on the belief that fundamental factors (such as earnings, cash flow and profit growth) affect stock prices, but that the adoption of quantitative techniques (i.e. computer based models) provides an advantage in assimilating and analysing this information, and building an efficient portfolio. The Fund's portfolio is constructed to be 'Market Neutral' i.e. it aims to have little or no overall exposure to movements in the equity market. The aim of low exposure to market movements is to enhance the consistency of the portfolio's performance and to provide diversification from other market oriented investments. |
| Manager Comments | The manager comments that 'One of the Funds' largest long positions in Sky City Network Television worked well with strong results driven by good advertising revenue and lower content costs. On the other side a short in Echo Entertainment worked against us as further expected earnings downgrades dissipated with result stabilising, while a change in CEO was viewed positively. Our Revisions factor dominated performance over the month with Quality, Value and Momentum factors also all positive.' |
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Totus Alpha Fund
17 Mar 2014 - Australian Fund Monitors
Totus Alpha Fund returned 1.44% during February and the Fund took full advantage of the buoyant equity markets over the last twelve months to return 51.45% over that time.
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17 Mar 2014 - Totus Alpha Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is a long/short investment fund principally investing in listed entities, commodities, futures and options in Australia and internationally. The Fund is not a market neutral fund and accordingly may switch between net long positions and net short positions. The Fund may use short sales and derivatives as determined by Totus Capital. Gearing may be used to enhance returns and the Fund may be geared in excess of 100% of the Fund's Net Asset Value. There is a limit to net exposure of 150%. |
| Manager Comments | The Manager notes 'It would have been nice to keep pace with the market last month however in reality it is difficult for a hedged portfolio to keep pace in a rip roaring "risk on" environment. On balance we are not too disappointed with the result given the number of aggressive short squeezes in some of our hedge positions during the month. We are pleased to have consolidated our 2013 performance with every investor in the fund now back in positive absolute return territory (net of all fees) as at the end of February.' |
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Allard Investment Fund
14 Mar 2014 - Australian Fund Monitors
The Allard Investment Fund increased 0.2% during February 2014. The 2.0% appreciation of the Australian dollar, detracted from the Fund's performance.
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14 Mar 2014 - Allard Investment Fund
By: Australian Fund Monitors
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| Manager Comments | In terms of industry breakdown the Fund was most exposed to Financial Services at 17.3%, Conglomerates 13.4% and Telco's with 9.5%. The geographic breakdown was HK / China at 35.1%, Singapore 14.5% and India 10.3%. |
| More Information | » View detailed profile of this fund |
Optimal Australia Absolute Trust
13 Mar 2014 - Australian Fund Monitors
Optimal Australia Absolute Trust returned 1.06% during February with a net exposure of 3.1% with a 12 month return of 3.20% and volatility of 1.90% (11.49% Index).
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13 Mar 2014 - 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 Manager's monthly report comments that 'Despite a stronger market in February, 2014 still strikes us as less about a one-way bet on equities and the impact of ultra-low interest rates on risk assets, and much more about stock selection and risk management. More volatility should be expected, and hopefully more differentiation in stock performance within the index. We are seeing more of the former, but so far not too much of the latter. When we do see sporadic market weakness, the default investor reaction is to sell resources and materials stocks, and buy defensives and financials at almost any valuation. This mindset is somewhat scary. There is no doubt that infrastructure stocks, as one example, generate cash flows with low volatility from quality assets. But their valuations are highly sensitivity to discount rates, which are rising, so these types of stocks are far from low-risk right now. That they are seen as so "safe" (with unfranked yields now under 5%, in some cases) seems to again point a gradual de-sensitisation towards risk, which is of course the objective and consequence of extended financial repression. As risk-averse investors, we remain profoundly suspicious of a world where equities win because they are the least bad alternative: the TINA (There Is No Alternative) doctrine.' |
| More Information | » View detailed profile of this fund |
Morphic Global Opportunities Fund
12 Mar 2014 - Australian Fund Monitors
Morphic Global Opportunities Fund returned -0.71% during February with a net exposure of 101% and gross exposure at 157%.
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12 Mar 2014 - Morphic Global Opportunities Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund closed the month fully invested, reflecting a conviction that while the market remains jittery, the bulls have certainly emerged with the upper hand. No currencies are hedged back into Australian dollars. The Fund was slightly overweight the US and Europe, and slightly underweight emerging markets through selected short positions in stock markets and currencies felt to be more vulnerable to economic and political turmoil. |
| More Information | » View detailed profile of this fund |
Bennelong Kardinia Absolute Return Fund
11 Mar 2014 - Australian Fund Monitors
Bennelong Kardinia Absolute Return Fund had a strong February making the most of the buoyant equity markets to return 2.69% (-2.12% January).
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11 Mar 2014 - Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund consists of a concentrated long/short portfolio typically comprising 20 to 50 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. There is a slight bias to large cap stocks in the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. |
| Manager Comments | The Manager's Report notes that Seek, Henderson, Westpac, Ramsay Health Care and James Hardie were all significant contributors to performance, whilst Share Price Index Futures (hedging long positions), Amcor and Ansell were the major detractors. The Fund's 12 month performance was in line with the market at 10.27% as compared to 10.56% however this was achieved with approximately one-third of the Index volatility (4.15% and 11.49% Index). The fund's Sharpe ratio was notable at 1.76 (0.71 Index). |
| More Information | » View detailed profile of this fund |
Bennelong Long Short Equity Fund
10 Mar 2014 - Australian Fund Monitors
Bennelong Long Short Equity Fund returned 2.50% in February and 20.61% since inception in January 2003 with below Index volatility.
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10 Mar 2014 - Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Manager Comments | The Sharpe ratio is 1.25 and maximum drawdown 12.22%. Up and down capture ratios are 0.16 and -1.76. All data is since inception. The Manager notes that the fund performed satisfactorily through what was quite a turbulent month due to a number of positions in the portfolio experiencing significant price movements in response to company earnings releases. An example was Seek/Fairfax, where Seek reported one of the best results in the reporting season and the stock rallied +38% for the month. This was offset when Fairfax managed to deliver on their cost out program and the stock rallied +41% over the same period. |
| More Information | » View detailed profile of this fund |
Fund Review: Aurora Fortitude Absolute Return Fund
7 Mar 2014 - Australian Fund Monitors
AFM's updated Fund Review for the Aurora Fortitude Absolute Return Fund for January 2014. The Fund is characterised by steady returns and very low risk. Since inception (March 2005) the Fund has returned 8.12% pa.
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7 Mar 2014 - Fund Review: Aurora Fortitude Absolute Return Fund
By: Australian Fund Monitors
AURORA FORTITUDE ABSOLUTE RETURN FUND
We would like to highlight the following aspects of the Fund;
- The Aurora Fortitude Absolute Return Fund (AFARF) has a 8 year track record investing in ASX listed equities. A Market Neutral overlay is used across a multi strategy approach which allows for flexible asset allocation to maximise returns and minimise risk under a variety of market conditions and cycles.CIO John Corr has over 20 years financial market experience with a strong focus on risk.
- Significant use of low risk "long" derivatives and option overlays has provided positive returns with low volatility during periods of market dislocation. Annualised return since inception is 8.12% with a very low standardised standard deviation of 2.74%. Over 88% of monthly performances have been positive, with no losing months in 2008 with the Fund's largest drawdown -2.09%.
- ASX listed Aurora Funds Limited was established on the merger of three existing fund management businesses, managing approx. $480m on behalf of more than 2,500 retail and wholesale investors.
Sean Webster
Research and Database Manager
Aurora Fortitude Absolute Return Fund AFM Fund Review January 2014