NEWS
CSAG Long Only Program
6 May 2013 - Australian Fund Monitors
The Commodity Strategies Long Only Fund delivered - 0.16% for the month and - 4.39% for the year to end March 2013.
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6 May 2013 - CSAG Long Only Program
By: Australian Fund Monitors
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| Manager Comments | The Fund's 8.1% pa compares well with the Fund's benchmark (Dow Jones-UBS Commodity Index Total Return) return of 4.01% pa over the same time. The Fund's Sharpe and Sortino ratio are also in excess of the benchmark while its annualised volatility is also notable at 13.32% as against 17.38%. |
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K2 Australian Absolute Return Fund
3 May 2013 - Australian Fund Monitors
The K2 Australian Absolute Return Fund had a strong April delivering 4.54% while the All Ordinaries Accum returned 3.82%.
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3 May 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's view is that the low point in the Australian earning cycle has now been past. Even during April analysts reduced forward estimates for just 6% of Australian top 100 companies; the lowest level in 20 years. This is an encouraging trend and the manager expects that this will continue throughout the year and that cost out programs will be the dominant earnings driver for at least the next 6 months. The manager was surprised that 40% of Australia’s leading stocks fell on average by 6% during April. Accordingly, excess performance was all about what you didn’t own. Given that the manager had anticipated declining inflation and subsequently lower interest rates, they had tilted the portfolio towards industrial stocks that exhibit appreciating dividend streams. The manager was particularly pleased when the Fund's largest holding, ANZ Bank, announced in its 1H’13 profit release that it would be lifting its dividend pay-out ratio from 60% to about 70%. As a result, ANZ’s interim dividend per share for 2013 was 10.6% ahead of last year. As always, “sell in May and go away” echoes through financial markets. However, the Fund's equity exposure will only change near term if some of the important lead indicators that are due to be released within the next 2 weeks turn unfavourable. Specifically, prior to the RBA interest rate decision on 7th of May, the manager expects ANZ job advertisements to remain weak, retail sales to remain below trend and trade data to be relatively weak. Hence the RBA could justify cutting the official cash rate by 25 bpts. |
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Pengana Australian Equities Fund
2 May 2013 - Australian Fund Monitors
The Pengana Australian Equities Fund had a flat March with a return of 0.0% but a strong 12 months delivering 22.5% for the year ended March 2013.
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2 May 2013 - Pengana Australian Equities Fund
By: Australian Fund Monitors
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| Manager Comments | As at March 31st, cash (including notes and preference shares) represented 32% of the Fund. The top five holdings by value were: DUET, ANZ Bank, News, Telstra and NAB. The largest positive contributors to the Quarter’s performance included NAB, News Corporation, ANZ, DUET Group, Seven West Media, Ainsworth Game Technology, Seven Group Holdings, Resmed and Myer Holdings. It is particularly pleasing that there were no detractors over the quarter. The Fund had an active March Quarter, acquiring several new holdings including Caltex, Fairfax and Speciality Fashion Group. In addition, the Fund deployed cash into existing holdings including Duet Group, Telstra, ANZ, Woolworths, Seven West Media and McMillan Shakespeare. 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 16.6%. The Fund continued its policy of maximising the cash or “near cash” rates available by acquiring several short dated hybrids at attractive rates. The Fund disposed of its holdings in CSL, Myer, Mastermyne Group and Amcom Telecommunications. The Fund also trimmed its holdings in Credit Corp, NIB Holdings and Tatts Group. While the consensus outlook for the global economy remains gloomy, tentative signs of economic recovery are beginning to emerge. Coordinated efforts by governments through a combination of rescue packages, “extremely loose” monetary policies and large stimulatory spending programs do appear to be having some positive effects. Given the extent of these wholesale efforts (that have included even the proverbial kitchen sink being thrown at the problem) one shudders to think what the implications of no reaction would have been. However, as pragmatic investors the Fund remains alert for those well managed companies with the business models and balance sheets to take advantage of the following dynamics - a) The US economy’s ability to consistently reinvent itself combined with the potential “game changer” of becoming energy self sufficient due to its recently accessible (and massive) oil shale reserves; b) The Chinese authorities efforts to reinvigorate (or at least stabilise) economic growth may be successful and c) The significant reduction in interest rates domestically may be creating a base for consumer confidence. |
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Pengana Asia Special Events (Onshore) Fund
1 May 2013 - Australian Fund Monitors
The Pengana Asia Special Events (Onshore) Fund returned 0.83% for March 2013 and 4.31% for the year to end-March.
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1 May 2013 - Pengana Asia Special Events (Onshore) Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund seeks to profit from trading securities which are primarily subject to corporate events or from trading-related securities which the Investment Manager believes are mispriced by the market. The Fund invests in securities that are listed on Asian stock markets and other markets where related securities may be listed and in securities which are listed on markets outside of Asia where more than 70% (by assets or earnings) of the underlying business originates from an Asian country. The Fund aims to generate consistently positive returns which have a low correlation to the Asian stock markets. The objective is to generate 10-20% pa with a standard deviation of 6-10% |
| Manager Comments | The Fund finished up 3.3% for the first quarter of 2013. Earnings Surprise was the biggest positive contributor to performance over the quarter, followed by the Mergers & Acquisitions (M&A) and Capital Management strategies. The Fund generated strong returns in most markets, particularly Singapore, Japan and China. The Fund’s gross and net exposure for March averaged 183% and 14% respectively. Approximately 30% of the gross exposure relates to M&A, with Capital Management, Earnings Surprise and Stubs trades also receiving meaningful allocations. Markets began the year upbeat with the “fiscal cliff” overhang in the US evaporating and investors welcoming the improved macroeconomic environment. In March, macro headwinds out of Cyprus dominated headlines, briefly spooking markets. Volatility, measured through the VIX index, spiked briefly in late February but spent most of the period in the 12 to 14 range. After a healthy start to the year in January and February in terms of M&A activity, March was a quiet month with the Fund getting involved in 2 new situations. However, the volatility in the market has created opportunities in other strategies and a greater capital allocation towards the Stubs sub-strategy in particular. We have a number of potential deal bump/re-rate situations in the M&A portfolio with visible short term catalysts. |
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BlackRock Multi Opportunity Fund
30 Apr 2013 - Australian Fund Monitors
The BlackRock Multi Opportunity Fund had a sound March 2013 with a return of 1.09% against its benchmark of 0.23%.
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30 Apr 2013 - BlackRock Multi Opportunity Fund
By: Australian Fund Monitors
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| Fund Overview | - Australian and International Equity Long/Short - Global Fixed Income Long/Short - Global Macro - Commodity Alpha - Alpha Transport The Fund's goal is to provide investors with a source of consistent, risk-controlled, absolute returns that are over time, expected to have low correlations with the returns of major asset classes. The Fund aims to achieve a return of 8% p.a. before fees, above the RBA Cash Rate Target over rolling 3 year periods. In order to achieve its expected return objective, the Fund will target a total expected risk of between 4-6% p.a. over the same rolling 3 year period. |
| Manager Comments | The manager notes that global markets started the year strongly with a broad rally in equities in the first quarter. Japanese equities out-performed most other markets, rallying 21% buoyed by anticipated aggressive monetary policy easing under the new Abe regime. US equities finished up 11%, while equity returns in Europe were more mixed; German equities finished up 3.7% and Italian equities ended the quarter 6.2% lower due to the uncertain Italian election outcome. Despite the rally in equities, bond prices in most major markets generally firmed as investors retreated to safe have bonds following a resumption of concerns in peripheral Europe with the banking sector bailout in Cyprus and weaker data across Europe. The Multi-Opportunity Fund delivered positive performance in the first quarter. The fund returned 2.78% versus the RBA cash benchmark return of 0.71%, thereby delivering alpha of 2.07%. This is a solid start for the 2013 year to date. The fund delivered positive returns in each of the 3 months of the quarter. The European Equity Long/Short, Fixed Income Global Alpha, Global Equity Long/Short, Global Macro and Commodity Long/Short strategies added value while International Alpha Transport was relatively flat and the Australian Equity Market Neutral strategies detracted from performance. |
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Pengana Australian Equities Market Neutral Fund
29 Apr 2013 - Australian Fund Monitors
The Pengana Australian Equities Market Neutral Fund had a good March 2013 returning 3.2% as compared to the S&P/ASX 300 Accum Index which fell 2.3%.
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29 Apr 2013 - Pengana Australian Equities Market Neutral Fund
By: Australian Fund Monitors
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| Manager Comments | Two of the Fund's largest long positions in March were McMillan Shakespeare and Sirtex Medical, while two of the largest short positions were Transpacific Industries and Duet. Momentum was the best performing investment theme in our model for the month followed by Quality with small contributions from Earnings Revisions and Value. Momentum captures share price movements that are based on previous performance over the longer and short terms. With most of the performance coming from the longer term component of this factor, stock prices in March continued to follow a low risk high yield theme as risk appetite clearly stays out of favour. While this theme has been continuing for some time, the manager is starting to see a more discerning market with increased focus on the underlying fundamental Quality of stocks and their ability to maintain dividend policies. While the market is less concerned with Earnings Revisions and Value themes at this point, the performance from shorter term Momentum themes particularly across the defensive sectors indicates that the market is beginning to be more selective with stocks where valuations are stretched and earnings growth remains weak. |
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Monash Absolute Investment Fund
26 Apr 2013 - Australian Fund Monitors
The Monash Absolute Investment Fund returned 2.00% during March and its six month return to 17.17%.
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26 Apr 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 | At the end of the month the portfolio had nine Outlook Driven stocks, nine Event Driven stocks and two sets of Pairs Trades. Gross exposure was 71% and our net exposure was 61%. The portfolio continues to avoid well covered defensives, preferring cash if there is no better alternative. It has no Telstra, consumer staples or utilities. However, the manager would be happy to invest in yield stocks with reliable growth at the right price as a result the Fund owns only one bank, NAB (apart from a CBA/Westpac pair trade). At the other end of the risk spectrum, there are no large miners and the Fund continues to look for more growth stocks with compelling valuations. |
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Allard Investment Fund
24 Apr 2013 - Australian Fund Monitors
The Allard Investment Fund was impacted by the weaker Australian dollar, falling 2.1% for the month.
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24 Apr 2013 - Allard Investment Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund's performance is notable for its low level of volatility with five year annualised volatility of 9.7% as compared to the MSCI Asia Pacific ex Japan volatility over the same period of 14.8%. In terms of geographic exposures the Fund was allocated; China/Hong Kong 29.7%, Singapore 12.5%,Korea 9.7%, India 6.3% and others 2%. Notably cash and fixed income was 31.7% of the portfolio. In terms of industry the largest exposure was financial services 15.7% followed by conglomerates 12.2%, telecomms 8.0% and retail 6.4% with other sectors 26%. The Fund's top 5 holdings are 36.4% with the next five holdings 15.7%. |
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Auscap Long Short Australian Equities Fund
23 Apr 2013 - Australian Fund Monitors
The Auscap Long Short Australian Equities Fund recorded a strong return of 1.46% over March, well above the Fund's benchmark return of 0.25%.
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23 Apr 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 | Average gross capital employed by the Fund was 161.7% long and 45.2% short. Average net exposure over the month was +116.5%. At the end of the month the Fund had 29 long positions and 11 short positions. The Fund’s biggest exposures at month end were spread across the consumer discretionary, industrials, property trust (financials subset), healthcare & materials sectors. The Fund’s positive performance was a result of exposure to a number of particular sectors. On the long side, the Fund was invested in select property trusts, telcos and utilities for their strong growing dividends and earnings certainty. The Fund also had positions in the media and consumer discretionary space as a play on a slowly recovering east coast economy. On the short side the Fund had select positions in the healthcare space where high expectations had not been met through the reporting season. The Fund has largely avoided sectors with a high degree of uncertainty and low visibility around future earnings, such as the mining sector. |
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Magellan Global Fund
22 Apr 2013 - Australian Fund Monitors
The Magellan Global Fund recorded a return of 1.92% during March 2013 taking the 12 month performance to 19.78%.
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22 Apr 2013 - Magellan Global Fund
By: Australian Fund Monitors
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| Manager Comments | The five largest stocks in the portfolio at the end of March were; Google Inc 6.1%, Tesco Plc 5.8%, Microsoft Corp 5.7%, Lowe's 5.3% and eBay Inc 5.2%. The top ten holdings were 52% of the portfolio. Over the quarter, all stocks held within the portfolio produced positive local currency returns. Within the top ten holdings, the three stocks with the strongest returns in local currency were Novartis (+22%), Target Corp (+16%) and McDonalds (+14%) while the three stocks in the top ten holdings with the weakest local currency returns were eBay (+6%), Lowes (+7%) and Microsoft (+8%). The significant changes to the portfolio during the quarter were the result of active portfolio management regarding relative valuation and opportunity cost. The Fund sold the entire position of General Mills which had appreciated materially since investment and purchased a new stock, Microsoft which is trading well below our assessed intrinsic value. The Microsoft position was subsequently increased to the top ten holdings during the quarter. The portfolio remains fully invested, reflective of the manager's comfort with the current macroeconomic environment and subsequent view that it remains an attractive time to be investing in a select portfolio of extremely high quality multinational companies. The manager remains focused on prudent portfolio construction with emphasis on the avoidance of aggregation of risk within the portfolio and believe that it is likely to exhibit substantially less downside risk than the market in the event that global markets deteriorate materially. Within the current macro environment the manager sees value in high quality companies exposed to certain investment themes. The portfolio has material exposure to the following themes: - Emerging market consumption growth via investments in multinational consumer franchises. - The move to a cashless society. There continues to be a strong secular shift from spending via cash and cheque to cashless forms of payments, such a credit cards, debit cards, electronic funds transfer and mobile payments. - Internet/e-commerce convergence. There are a number of internet enabled businesses that have very attractive investment characteristics with increasing competitive advantages. - US housing Recovery. A recovery in new housing construction should drive a strong cyclical recovery in companies exposed to US housing and also provide a strong boost to the overall economy. - US interest rates normalising over the next 3-5 years as the US economy recovers. |
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