NEWS
Prime Value Growth Fund
22 Mar 2013 - Australian Fund Monitors
The Prime Value Fund records a return of 5.3% during February and 14.53% during the preceding 12 months.
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22 Mar 2013 - Prime Value Growth Fund
By: Australian Fund Monitors
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| Manager Comments | The Australian equity market continued its strong start, with the benchmark S&P/ASX 300 Accumulation index rising a further 5.3% during February. Global equity markets also rose, but stumbled mid-month due to an inconclusive result in Italian elections (and increasing support of anti-austerity parties) as well as fears the US “easy” monetary policy would be scaled back. US budget issues (avoiding automatic spending cuts which would reduce growth) also weighed on investor sentiment. Economic data in the US and China was neutral to positive. Domestically, the focus was on the reporting season. In general, the results season was viewed as positive as the number of positive surprises outnumbered negative. However price action was subdued. Cost reduction and margin expansion were some of the key themes of the season. The Fund also performed well during February, rising by 5.4% and outperforming the benchmark. Stock selection was positive, again across most sectors. The biggest positive contributors to performance were REA Group (up 29.8%), National Australia Bank (up 10.4%) and Westpac (up 9.7%). The companies which detracted from performance were Monadelphous (down 6.6%), BHP Billiton (down 1.1%) and Newcrest (down 3.2%). The fund's preferred sectors are Consumer Staples, Energy and selected quality mining services companies with an underweight in non-bank Financials. 88.6% of stock held were in the top 100 and the largest holdings were ANZ, BHP Monadelphous, Wesfarmers and Westpac. |
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K2 Australian Absolute Return Fund
21 Mar 2013 - Australian Fund Monitors
The K2 Australian Fund delivers a returns of 4.47% during February 2013 and 20.28% over the previous year.
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21 Mar 2013 - K2 Australian Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | - The Fund is managed 'opportunistically'. Investments are made throughout Australia and New Zealand across sectors that the investment team believes will add greatest value. - Typically the Fund will hold between 50 and 70 listed equities. - If deemed appropriate, the Fund may be 100% invested in cash. - To implement the Fund's Long/Short investment strategy, K2 is able to use leverage or gear the Fund. However, the net invested position of the Fund shall not exceed the Net Asset Value (NAV) of the Fund. |
| Manager Comments | The manager notes that the All Ordinaries Accumulation Index pushed higher for the 9th consecutive month, gaining +5.18%. Domestically, the RBA left cash rates unchanged at 3.00% and noted that the current outlook for inflation “would afford scope to ease policy further, should that be necessary to support demand.” While the RBA acknowledged domestic activity will fall well short of their expectations, positive global developments in recent months has caused a ‘wait and see approach’ from the Board. Consequently expectations for further rate cuts have been pushed out. For six consecutive months the manager has maintained net exposure over 90%. Now that the All Ordinaries Accumulation Index is within 5% of its all-time high the question is “…is it time to prune back exposure?”. Given that the current strength in the Australian equity market has been delivered without any meaningful earning momentum there is a need to assess whether profits are at a cyclical low and about to commence an upward trend. The manager's view is that the economy will now surprise on the upside and hence we have seen the low point in the profit cycle. In addition, revenue growth will outstrip cost growth and DPS growth will outstrip EPS growth. It is this growing dividend income stream that will lure retail investors out of term deposits. Overlaying this is the fact that the average term deposit for less than 6 months is now below 3.30% whereas the average yield of the top 20 listed stocks is over 4%, and therefore it is likely that equities will re-emerge in most retail investment portfolio’s this year. The portfolio had it's largest contributions from Bank of Queensland Ltd, ANZ Banking, Flight Centre and National Australia Bank with the smallest contributions from Aurizon Holdings, BHP Billiton, Miclyn Express Offshore and Panaust. Largest holdings were National Australia Bank at 8.6%, BHP Billiton 8.4%, RIO Tinto 6.3%, Flight Centre 6.1% and ANZ Banking 5.7%. The fund was 97% invested at month-end. |
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Insync Global Titans Fund
20 Mar 2013 - Australian Fund Monitors
The Insync Global Titans Fund returns 1.7% during February 2013 and 21.1% for the year ended February.
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20 Mar 2013 - Insync Global Titans Fund
By: Australian Fund Monitors
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| Manager Comments | The manager comments that equity markets were buoyant in February driven by liquidity generated by global central banks. Also assisting sentiment were signs of an improving US economy and comments by US Fed chairman Bernanke that the benefits of QE outweighed the costs. In Europe an inconclusive Italian election with a strong anti-austerity protest vote was a reminder that the European debt issue is still far from resolved. The fund's performance was broadly based with the largest contributions from Wyndham, Roche and Reckitt Benckiser. Negative contributions came from Coach, SAP and Oracle. With buoyant equity markets and very low levels of volatility Insync took the opportunity to increase the level of the fund's protection to reduce the impact of any correction. Key fund holdings were Nestle S.A, McDonald's, Accenture, Richemont and SAP AG. Average market capitalisation of stocks in the portfolio was $A92.9bn with a weighted forecast dividend yield of 2.68% and PE ratio of 15.1 times. The fund was not hedged back into $A. |
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Morphic Global Opportunities Fund
19 Mar 2013 - Australian Fund Monitors
The Morphic Global Opportunities Fund records a return of 0.9% during February 2013 and 10.76% over the last 6 months.
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19 Mar 2013 - Morphic Global Opportunities Fund
By: Australian Fund Monitors
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| Manager Comments | The manager notes that market tone was dominated by a resurgence in uncertainty in Europe, and for the Euro, caused by the Italian election deadlock and fears the US economic recovery might falter in the face of mandated cuts to government spending. Both issues may continue to be a factor in March, especially the Italian stalemate. Weak economies throughout Europe mean support for the anti-establishment parties, focused on ending austerity and leaving Euro is on the rise, with potentially unpredictable economic and market consequences. In terms of the fund the manager recorded losses on four Indian bank positions which offset large gains made in other markets, especially Thailand and Japan. Under-performance also came from the tilt to emerging markets over developed markets and a European bank over-weight. Gains were made on a range of Japanese holdings as well as on Manilla Water and two Hong Kong holdings. Gains were also made on some short positions in Europe and Asia. The fund reduced its net investment level over the period as it seemed strong inflows has left stocks, particularly in Europe and emerging markets over-extended. The fund remains un-hedged into $A but does have some of the fund's yen exposure hedged into $US. The fund also has a short US bonds and long German bonds position in the fixed interest portion of the portfolio. |
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Platinum International Fund
18 Mar 2013 - Australian Fund Monitors
The Platinum International Fund returns 1.18% for February 2013 and 15.38% for the prior 12 months.
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18 Mar 2013 - Platinum International Fund
By: Australian Fund Monitors
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| Manager Comments | The manager notes that the MSCI (AUD) rose 1.9% over the month and the market was caught between easy central bank policy and macro issues facing the global economy. In the UK the tug-of-war between ongoing low rates and a credit downgrade saw the equity market up 1% however the pound dropped 4.5%. The Italian market fell 9% after the election left the political situation very fluid. In the US budget issues remained however the US market still out-performed emerging markets and the $US was stronger. Japanese equity continued to record strong returns up 4.0% assisted by the Yen which fell 1% and a new Bank of Japan Governor. The fund's over-weight to Japan at 21.7%, assisted fund performance. At month-end the Fund was 99% long and 12% short with cash and liquids at 1% for a net invested position of 88%. |
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Aurora Fortitude Absolute Return Fund Performance February 2013
15 Mar 2013 - Australian Fund Monitors
The Aurora Fortitude Absolute Return Fund returns
0.80% for February 2013 and 4.00% for the preceding 12 months.
0.80% for February 2013 and 4.00% for the preceding 12 months.
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15 Mar 2013 - Aurora Fortitude Absolute Return Fund Performance February 2013
By: Australian Fund Monitors
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| Manager Comments | Examining each of the Fund's strategies the Options portfolio was the best performing strategy for the month (+0.58%). As anticipated, the historically low levels of volatility provided an opportunity to profit from an increase in volatility over reporting season. This was most pronounced in the Fund’s March Index Futures position. Also of benefit was the small net long, and long volatility overlay in all four of the the major banks. Boral was an under-performer because the stock rallied sharply while the Fund held a short bias. Under-performing for the month was the Long/Short strategy (-0.16%) despite holding mostly long positions. Atlas Iron came under pressure as a result of the declining iron ore price, a poor result and general materials weakness. A stop loss was implemented over this position. The Yield book was consistent (+0.18%), with ANZ Convertible Preference Shares performing particularly well after going ex-distribution. The Fund continued to add to short dated instruments with mid-year maturities. The Convergence as well as Mergers and Acquisition strategies were both small net contributors to returns. |
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BlackRock Australian Equity Market Neutral Fund Performance - February 2013
14 Mar 2013 - Australian Fund Monitors
The BlackRock Australian Equity Market Neutral Fund delivers 1.35% during February 2013 and 6.88% over the preceding 12 months.
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14 Mar 2013 - BlackRock Australian Equity Market Neutral Fund Performance - February 2013
By: Australian Fund Monitors
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| Fund Overview | The Fund's portfolio primarily consists of long and short Australian equity positions. The Fund may also invest in other funds managed by BlackRock. Derivative securities, such as futures, forwards, swaps and options, can be used to manage risk and return Key insights into the investment process include: Analyst Expectations, Relative Valuation, Earnings Quality, Market Signals and Timing. Short-Term return enhancing opportunities including: Dividend reinvestment plans, Manging index changes, Managing cash flows, Arbitrage, Initial public offerings and Seasoned Equity Offerings and Off Market Buybacks. |
| Manager Comments | The manager comments that the Australian equity market continued its rally into February with the S&P/ASX 200 Price Index up 4.6% to mark its third consecutive month of gains. This was despite some volatility caused by concerns about US Federal Reserve policy and the Italian election result. Investors were buoyed by an earnings season that tended to see companies meet or beat expectations, with cost reductions and margin improvement recurring themes, and payout ratios generally lifted. The bullish tone was not reflected in a typical risk on rally, with ASX200 Resources up 0.6% while ASX200 REITs were up 3.5% and Industrials up 6.9%. The search for yield in the equity market appeared to focus mainly on the big four banks, which outperformed strongly. Domestic Cyclicals performed well through the results season, particularly financials and retailers, as better than expected results squeezed short positions. Despite the continued market valuation expansion, the result season saw a greater differentiation in returns at the individual stock level than was witnessed in January. This favored the fund's investment process and led to a rebound in active performance. The fund recorded contributions from JB Hi-Fi, Bluescope Steel, Cochlear, IAG and NAB. Detractors from performance include Seek, Toll, Alumina, QBE and Treasury Group. |
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Optimal Australia Absolute Trust
13 Mar 2013 - Australian Fund Monitors
The Optimal Australia Absolute Trust returns -0.50% for February 2013 and 1.89% for the preceding 12 months.
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13 Mar 2013 - 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 notes that the equity market had a strong month in February, led by a small group of defensive and financial large-cap names. In terms of sectors, the leaders were Consumer Staples up 9.7% and Financials up 6.5%. The concentration of returns was evidenced by the fact that eight names contributed to 50% of the market increase in 2012 and this phenomenon has accelerated into 2013. Market breadth is therefore very narrow and the performance gap between defensive industrials and resources has reached levels unprecedented in the manager's experience. The Fund is under-represented in these most popular sectors, as the manager finds the combination of high valuations and low (and declining) earnings growth unattractive. Major factors impacting the market include money flows into quantitative funds, retail investors search for yield and investors benefiting from the AUD carry trade. Major contributions to the Fund's return came from long position in banks and insurance and energy and losses from short positions in banks, consumer staples and media. At month-end the Fund was 33.5% long, 14.2% short and had a short equity derivatives position of 10.7% for net risk exposure of 3% and a gross risk exposure of 60.3%. |
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Bennelong Long Short Equity Fund
12 Mar 2013 - Australian Fund Monitors
The Bennelong Long Short Equity Fund delivers -0.28% for February 2013 and 21.95% for the previous 12 months.
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12 Mar 2013 - Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Manager Comments | Fund performance was flat for the month with solid earnings results from several long positions offset by results from the short portfolio which were largely not as poor as expected. The market rally over the past 6 months has been largely driven by large cap stocks with good dividend yields and lower than average risk. Recently the rally has broadened and value has start move higher. The Fund has maintained its focus on high return on equity, quality businesses but several large cap, high yield, low beta stocks are trading at premiums to long term valuations. The Fund reduced its exposure in some stocks that have run ahead of their fundamental valuation. The manager notes that recent performance has run ahead of earnings and that evidence of a earnings growth recovery will be needed to justify recent market strength. |
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Bennelong Kardinia Absolute Return Fund
11 Mar 2013 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund delivers 2.35% during February 2013 and 14.84% for the year ended February, well above its benchmark of the RBA Cash Rate.
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11 Mar 2013 - 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 30 to 40 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. The Fund was launched on 17th August 2011 following the resignation of Portfolio Managers Mark Burgess and Kristiaan Rehder from Herschel Asset Management in late July 2011. As a result management of the Fund was transferred to Kardinia Capital, a new boutique fund manager 65% owned by Burgess and Rehder, with the balance owned by Bennelong Funds Management. The Fund's investment strategy and prior track record remains intact. |
| Manager Comments | The manager notes that the ASX All Ordinaries Accumulation Index was up 5.2% over the month despite a domestic reporting season that was only slightly above expectations and driven mainly by cost-cutting and margin improvement. Within the market the notable sectors were Consumer Staples up 10.8% and Financials, up 8.1%. Large caps rose 5.7%, significantly out-performing small caps, up 0.9%. Large positive contributors to the Fund were NAB,CSL, ANZ and News Corp with negative contributions from Fortescue and Regis. Net equity exposure increased to 63.1% (75.8% long and 12.7% short). |
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