NEWS
Auscap Long Short Australian Equities Fund
17 May 2013 - Australian Fund Monitors
The Auscap Long Short Australian Equities Fund had a strong month recording 9.83% during April 2013.
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17 May 2013 - Auscap Long Short Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund focuses on fundamental long and short investments. The Fund may utilise a multi-strategy approach if short term opportunities to increase returns, hedge the portfolio, protect capital or minimise volatility are found. The Fund is a high conviction fund and the combined portfolio will typically have 25-45 positions, investing primarily in stocks in the ASX200. The Fund may be net long, short or neutral depending on the strategies employed at the time. The Fund may hold cash so that it is in a position to take advantage of market volatility and compelling investment opportunities as and when they arise. The Fund may be geared up to 200% gross long or short and up to 150% net long or short. |
| Manager Comments | The Fund returned 9.83% net of fees during April 2013. This compares with the benchmark return of 0.25%. Average gross capital employed by the Fund was 178.0% long and 48.5% short. Average net exposure over the month was +129.5%. At the end of the month the Fund had 33 long positions and 11 short positions. The Fund’s biggest exposures at month end were spread across the consumer discretionary, financials, telcos, industrials and materials sectors. The Fund had an unusually strong month in April. The Manager would caution investors against any expectation of monthly returns in this order of magnitude. A significant portion of the monthly return was due to the Fund’s overweight exposure to companies with strong competitive advantages and sustainable earnings that provide investors with a good dividend yield and growth that is anticipated to exceed inflation over coming years. These investments performed very strongly during April,and while the Manager expects them to continue to contribute positively to the Fund over the next few years, one should not expect the sort of monthly capital gains experienced in April. The other main contributor to the Fund’s performance was a short position across a small number of gold stocks that have constituted at most around 10% of the Fund’s capital at any point during the month. It is very unusual to have a few positions that move in line with expectations as quickly as they did during the month. Between the start of the month and the middle of the month, when the short positions were closed, the average price fall across these positions was 34% and provided the Fund with a positive 2.8% return. |
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Pengana Australian Equities Fund
16 May 2013 - Australian Fund Monitors
The Pengana Australian Equities Fund had a strong April 2013 returning 3.51%, with its twelve month return 25.91%.
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16 May 2013 - Pengana Australian Equities Fund
By: Australian Fund Monitors
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| Manager Comments | As at April 30th, cash (including notes and preference shares) represented 29% of the Fund. The top five holdings by value were: DUET Group, ANZ Bank, Telstra, NAB and Caltex. The largest positive contributors to the month’s performance included ANZ, Telstra, NAB, DUET Group, Resmed and Woolworths. The only detractors of any consequence (and nevertheless small) were Seven Group and XRF. The Fund acquired a new holding in AMP. In addition, the Fund deployed cash into existing holdings including Caltex, DUET Group, Seven Group, ANZ, Tatts Group, Mermaid Marine and Ainsworth Gaming. The Fund’s exposure to non-Australian dollar earnings streams (inclusive of companies with global earnings profiles such as Resmed and News Corporation, NZ based companies and US dollar exposure) stands at 15%. The Fund also trimmed its holdings in News Corporation. Robust share prices have narrowed the Fund's investable opportunity set. In addition business activity levels continue to be muted with many sectors reporting evidence of a deteriorating operating environment. The re-rating of many companies’ share prices may be due to the (not immaterial) impact of a lower cost of money environment and the resulting positive effect on long duration assets (particularly off a low base) rather than the improvement in the outlook for revenues and earnings. Australian businesses are still fighting cyclical and structural factors such as a cautious consumer, the impact of a lack of confidence in the Government’s policy decisions (exaggerated by a prolonged election campaign), the increasing effects of a strong Australian dollar on domestic business’ competitive position and growing uncertainty in the mining and related sectors. |
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Insync Global Titans Fund
15 May 2013 - Australian Fund Monitors
The Insync Global Titans Fund returned 1.63% for April 2013 bringing its twelve month return to 16.41%
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15 May 2013 - Insync Global Titans Fund
By: Australian Fund Monitors
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| Manager Comments | Most global equity markets rose in April, with the S&P 500 closing at a new all-time high, despite sub-par economic conditions prevailing in most parts of the developed world. Continued quantitative easing and negative real interest rates are exerting a powerful influence on the pricing of financial assets, but at the same time are also increasing risks within the financial system. The Manager notes that markets can run further, perhaps much further, but as valuations become extended and bullish sentiment for equities becomes more and more the consensus view, the need for vigilance and portfolio protection becomes greater. This can sometimes lead to short term relative under-performance versus equity indices but is done for the purpose of preserving capital and generating long term positive returns. Momentum following in the pursuit of short term relative performance often results in significant long term losses. The Fund seek to generate strong positive returns by investing in companies that can grow even in a tough operating environment and, the higher the market goes, the more we would look to hedge market risk. The unit price increased by 1.6% in April. The biggest positive contributions came from Sanofi, Coach, Roche, Walt Disney and Accenture. In the case of Coach, the shares of the luxury handbag manufacturer jumped by over 17% during the month on the back of solid quarterly earnings as revenue growth gained momentum in the US and China. The Fund's geographic distribution of investment, by listing, is North America 39.7%, Europe 26.4%, UK 26.3% and cash and puts 7.6%. In terms of the Fund's underlying metrics the Manager notes that the average market cap of equities in the portfolio is A$99.1bn with a weighted avg forecast dividend yield of 2.90%. The weighted avg forecast PE ratio is 15.4x and weighted avg ROE 21.3%. The Fund has no hedging in place at the moment. |
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Morphic Global Opportunities Fund
14 May 2013 - Australian Fund Monitors
The Morphic Global Opportunities Fund had sound April 2013 returning 2.80% and its six month return to 12.99%.
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14 May 2013 - Morphic Global Opportunities Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund’s top stock contributors this month came mostly from Japan, led by long term holdings in HR services outsourcing company Relo and lease financer Century Tokyo. Also helping in Japan were Karaoke equipment maker Daiichikosho and two baskets, comprising three Japanese drug stores and two Japanese tyre producers. A recent Japanese purchase, low cost home builder Arnest One also achieved high returns, although this was partly offset by a short position in two other home builders established to hedge the exposure. Other positive contributions came from Korean cable shopping network GS Home Shopping, Turkish steel producer Kardemir, a collection of US financials, and a long-short Macau gaming stock position. Most of the underperformance in the Fund was due to long positions in two individual stocks, a basket of commodity related investments and partial reversals in previous gains on a handful of unpaired short positions. Shorting proved difficult in a month with such a strong underlying surge in global markets. The Manager closed out all its short equity positions other than the long-short pairs set up for hedging purposes mentioned above, but only after reporting losses that eroded somewhat previously profitable trades in a Hong Kong retailer and a pair of European power generators. From a macroeconomic perspective, the month saw a tug-of-war between deteriorating economic data battling investor optimism caused by expanded global money printing. Liquidity would appear to have the upper hand so far. The Manager expects this to persist and has slightly lifted Fund exposures to emerging market and commodities. However confidence remains fragile and vigilance is required for any sign this stance requires review. The Fund remains un-hedged into Australian dollars. |
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Monash Absolute Investment Fund
13 May 2013 - Australian Fund Monitors
The Monash Absolute Investment Fund returned 1.13% for April 2013 bringing its since inception return (July 2012) to 18.56%.
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13 May 2013 - Monash Absolute Investment Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund places a high priority on capital preservation, and have an absolute return focus in accepting market risk. The Manager employs a comprehensive approach to making investment decisions utilising value, growth and discounted cash flow styles. The portfolio is somewhat concentrated and the manager looks to diversify the portfolio across industries and themes rather than staying near an index. The portfolio may at times have a large amount of cash or other protection. |
| Manager Comments | The manager has commented on the following investments; G8 Education (GEM) continued to climb. This month it was up another +16.3%. GEM owns and operates 167 childcare centres in Australia and has interests in another 69 centres in Singapore. Exiting the Flight Centre / Wotif pairs trade (FLT/WTF). Despite a rising market for industrial cyclicals the Fund managed to make money from shorting Wotif, which dropped -2.7% while invested and also made money from owning Flight Centre which rose and made +4.6% over the same period. Southern Cross Electrical Engineering (SXE) was down -15.9%, getting caught in the fall with all mining services companies and resource companies generally. At the end of the month the portfolio had nine Outlook Driven stocks, seven Event Driven stocks and one Pairs Trades. Gross exposure was 69% and net exposure was 67%. |
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Aurora Fortitude Absolute Return Fund
10 May 2013 - Australian Fund Monitors
The Aurora Fortitude Absolute Return Fund had a sound April 2013 with a return of 1.68% bringing the twelve month return to 5.24%.
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10 May 2013 - Aurora Fortitude Absolute Return Fund
By: Australian Fund Monitors
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| Manager Comments | Investors searching for dividend income aggressively bought Finance, Telco and Consumer related companies which resulted in a 6.7% rally in the All Industrials Index. Ongoing concerns regarding slowing Chinese growth and the impact on commodity prices saw the All Resources Index fall 3.7%. The net result was a 4.5% return for the S&P/ASX 200 Accumulation Index. The most significant contribution (0.77%) came from the recovery in the Australian Infrastructure Fund. The fund released an update on the completion of asset sales and the timing of capital returns to unit holders. A standout among larger resources companies was the 8.3% total return from Woodside Petroleum. This was largely in response to the announcement of a special dividend and increased dividend payout ratio which was music to the ears of yield hunters. There continues to be some supply of short dated hybrid instruments as investors continue to switch into new issues and ordinary shares. The manager continues to seek alpha in this area with the knowledge that returns will accelerate as maturity approaches. |
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Bennelong Long Short Equity Fund
9 May 2013 - Australian Fund Monitors
The Bennelong Long Short Equity Fund had a flat month in April 2013 recording a return of 0.01%.
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9 May 2013 - Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Manager Comments | Global equity markets had a strong month in April, fuelled mainly by the Bank of Japan’s announcement of a massive expansion of money supply in an effort to stimulate inflation. The S&P/ASX 200 got caught up in the excitement and ended up 4.5%. The focus of the local market rally was primarily dividend yield which drove Telcos up 10%, Financials up 9%, REITs up 8% and Staples up 7% whilst Resources were sold off heavily. Gains in Health Care and Consumer Staples were equally offset by losses in Consumer Discretionary and Utilities. The Fund's long portfolio was up over 6% for the month but the short portfolio losses neutralised the net position. This was a disappointing outcome as the fund continues to be impacted by exogenous factors rather than fundamental factors. The manager is conscious that some investors have disregarded the equity risk premium concept resulting in valuation premiums in some stocks being unjustified in the manager's opinion. Further the manager regards the current market conditions as challenging for fundamental investors but expects that the Fund have by now withstood the majority of thematic headwinds and expect an element of reversion to be forthcoming, enabling the Fund to regain lost ground. Locally, the economy is marked by weak business and consumer confidence which is reflected in some recent downgrades and softer outlook commentaries. Equity markets are looking through FY 2013 earnings and the market is starting to see some earnings softness occurring in the FY 2014 outlook. |
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Platinum Japan Fund - AUD
8 May 2013 - Australian Fund Monitors
The Platinum Japan Fund had an exceptional April 2013 with a performance of 13.75%, 4.55% ahead of its benchmark.
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8 May 2013 - Platinum Japan Fund - AUD
By: Australian Fund Monitors
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| Manager Comments | The Fund holdings were 85.6% Japan, 3.4% Korea (net) and 11.0% cash with 50.4% of the Fund hedged back into $US. By sector the largest holdings were in Industrials 23.7%, Consumer Discretionary 21.6% and Financials 11.5%. Lowest sector holding was in consumer staples at 2.4%. The three largest holdings were Toyota, SBI Holdings (Telecomms) and Mitsubishi UFJ. |
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Fund Review: Bennelong Kardinia Absolute Return Fund
7 May 2013 - Australian Fund Monitors
AFM's updated Fund Review for BKARF, showing KPI's for April 2013 vs ASX200, Performance (net of fees) and Cumulative Performance since inception.
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7 May 2013 - Fund Review: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
Fund Review: Bennelong Kardinia Absolute Return Fund (pdf format)
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review on the Bennelong Kardinia Absolute Return Fund.
We would like to highlight the following aspects of the Fund:
- Kardinia is a boutique Australian based Fund Manager established in August 2011 in conjunction with the Bennelong Group to continue the management of the Herschel Absolute Return Fund.
- Long biased, research driven, active equity long/short strategy investing in listed ASX companies with a six year track record and an annualised return of 14% net of fees.
- Portfolio Managers Mark Burgess and Kristiaan Rehder have significant market experience, while the Bennelong Group provide infrastructure, operational, compliance and distribution capabilities.
- Consistent top decile long short equity sector performance. Key Performance and Risk Statistics indicate an attractive risk/reward profile, and a strong focus on capital protection in negative markets.
Research and Database Manager
Australian Fund Monitors
Fund Review: Bennelong Kardinia Absolute Return Fund (pdf format)
Bennelong Kardinia Absolute Return Fund
7 May 2013 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund recorded 1.34% for April 2013 bringing its consecutive positive months to 11.
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7 May 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. While at Herschel Burgess and Rehder had managed the Fund under the name of the Herschel Absolute Return Fund. 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 | Global equity markets continued to rally in April despite weakness in economic data from China and the US. A reasonable start to the first quarter earnings season in the US helped drive the S&P500 Index to a new record high. The Australian equity market outperformed as investors chased yield with the All Ordinaries Accumulation Index rising 3.8%. National Australia Bank, ANZ, Telstra and Commonwealth Bank were all large positive contributors to performance, whilst Share Price Index futures contracts (hedging long exposures), Sirius Resources, Rio Tinto and MACA were the largest detractors. The Fund’s net equity market exposure (including derivatives) was kept fairly stable around 35.2% (58.8% long and 23.6% short). |
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