NEWS
Performance Report: Glenmore Australian Equities Fund
12 Jul 2018 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +4.01% in June, outperforming the ASX200 Accumulation Index by +0.74% and taking annualised performance since inception to +36.77%.
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12 Jul 2018 - Performance Report: Glenmore Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | Top performers in the portfolio in June included Appen (+31.0%), Stanmore Coal (+26.1%), NRW Holdings (+25.1%), Navigator Global Investments (+16.1%), Alliance Aviation Services (+12.2%), Lifestyle Communities (+10.8%), Pacific Current (+8.4%) and Emeco (+7.1%). Negative contributors included Imdex (-5.0%) and Atlas Arteria (-3.3%). Read Glenmore's latest report for their commentary on three of the Fund's top performing stocks - Appen (APX), Stanmore Coal (SMR) and NRW Holdings (NWH). |
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WOW or WES? And The Award For The Most Underpaid Employees Goes To...
11 Jul 2018 - KIS Capital Partners
It was just over a year ago that Coles admitted to the Fair Work Commission that as much as 60 percent of its workforce would be better off under the award - the minimum employee wage and benefits mandated by the state. The source of...
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11 Jul 2018 - WOW or WES? And The Award For The Most Underpaid Employees Goes To...
By: KIS Capital Partners
Performance Report: Bennelong Long Short Equity Fund
10 Jul 2018 - Australian Fund Monitors
The Bennelong Long Short Equity Fund returned +0.08% in June, taking annualised performance since inception in February 2002 to +16.50%.
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10 Jul 2018 - Performance Report: 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 as a Listed Investment Company (LIC) on the ASX. |
| Manager Comments | The Fund's top performing pair in May was long Woolworths / short Metcash. The weakest pair was long Mineral Resources / short BHP following changes to Mineral Resources' operations and monetisation strategy at its Wodgina lithium project. In their latest report, Bennelong contrast price gains for various equity indices against their respective 12m forward EPS for the purpose of observing whether price gains are being supported by earnings delivery (i.e. fundamentals) or otherwise (e.g. sentiment, liquidity). They noted that, for the most part, earnings change was greater than price change over the past financial year which is in stark contrast to fiscal 2017 where price gains outpaced earnings (with the exception of Australia). They believe that this year's decline in P/E ratios are evidence of the impacts to the valuation of all asset classes (equities included) in the face of the world's central banks commencing the unwinding of very loose monetary policy settings. Bennelong aren't ruling out further multiple compressions in the coming fiscal year, given the current accommodative policy settings and strained geopolitical tensions. |
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Short Selling - The Long and Short of It
9 Jul 2018 - Mark Houghton, King Tide Asset Management
Short selling has been in the news with US firm Glaucus hitting pay dirt in the Aussie market. There are mixed views on the efficacy of 'shorting', with some of the world's most revered investors strongly opposed. Warren Buffet no less,...
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9 Jul 2018 - Short Selling - The Long and Short of It
By: Mark Houghton, King Tide Asset Management
Hedge Clippings, 6 July 2018
6 Jul 2018 - Australian Fund Monitors
Trying to predict the eventual outcome of the looming trade war between the US and China is about as difficult as trying to predict Donald Trump's next policy announcement. However, a reasonable prediction would be that neither side enjoys...
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6 Jul 2018 - Hedge Clippings, 6 July 2018
By: Australian Fund Monitors
Trying to predict the eventual outcome of the looming trade war between the US and China is about as difficult as trying to predict Donald Trump's next policy announcement. However, a reasonable prediction would be that neither side enjoys losing face, and therefore is unlikely to back down at the first hurdle.
For those that have missed it at 2 PM today America is due to slap a 25% duty on $34 billion worth of Chinese imports, ranging from machinery to electronic parts. As night follows day Tit is liable to follow Tat, meaning that China will immediately respond with equivalent tariffs focused on American farm goods.
While $34 billion seems a fair chunk to Hedge Clippings, they only represent about 0.1% of GDP for both the Titter (the US) and the Tatter (China). However the real risk lies in the Donald's approach to negotiation, and we would imagine China's approach to backing down. Assuming both parties perform as expected by most pundits, as opposed to how each hopes the other will react, it seems pretty likely that tensions, the damage to each country's economy, will increase.
However the US economy is in a very different place to China's, with a strong stock market, improving growth, and bond rates that in spite of dire predictions, and inevitable Fed tightening, seems not to have upset the apple cart (yet). Growth in the second quarter of the year is likely to exceed 3.5% annually, and unemployment is falling. Apart from the trade war, the major risk seems to be that there will in fact be an eventual outbreak of inflation, currently just above the FED's target of 2%.
Conversely, in China the equity market has fallen 20%, and the authorities are grappling to control credit. Over the past 20 years, having become the world's factory and having exported deflation as a result, a nasty trade war with the US could be the trigger to signal the end of the miracle.
Meanwhile, we assume the economy of all other countries, including Australia, caught in the crossfire will be considered collateral damage, although depending on who sides with whom, and who can negotiate what, will depend on the eventual outcome.
Performance Report: Insync Global Capital Aware Fund
6 Jul 2018 - Australian Fund Monitors
The Insync Global Capital Aware Fund returned +2.22% after the cost of protection in May, outperforming the Global Equity index by +2.51% and taking annualised performance since inception in October 2009 to +10.22%.
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6 Jul 2018 - Performance Report: Insync Global Capital Aware Fund
By: Australian Fund Monitors
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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio of typically 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
| Manager Comments | The Global Capital Aware Fund is a concentrated portfolio of large cap global companies with downside protection. Insync's investment strategy is driven by fundamentals combined with active risk management with the aim of to investing in high quality, large cap global companies at attractive prices. Insync looks for companies that can consistently pay rising dividends and earn high returns on invested capital. Their aims to provide investors with long term capital growth and some income. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
6 Jul 2018 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +8.09% in May, outperforming the ASX200 Accumulation Index by +7.0% and taking annualised performance since inception in Feb 2009 to +18.95%.
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6 Jul 2018 - Performance Report: Bennelong Concentrated Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The overriding objective of the Concentrated Australian Equities Fund is to seek investment opportunities which are under-appreciated and have the potential to deliver positive earnings, while satisfying our stringent quality criteria. Bennelong's investment process combines bottom-up fundamental analysis together with proprietary investment tools which are used to build and maintain high quality portfolios that are risk aware. The portfolio typically consists of 20-35 high-conviction stocks from the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to ASX-listed securities. Derivative instruments are mainly used to replicate underlying positions and hedge market and company specific risks. |
| Manager Comments | As at the end of May, the portfolio's weightings had been increased in the Health Care, Industrials and Materials sectors, and decreased in the Discretionary, Consumer Staples and Financials sectors. The Fund aims to invest in a concentrated portfolio of high quality companies with strong growth outlooks and underestimated earnings momentum and prospects. By comparison with the Fund's benchmark (ASX300 Accumulation Index), the portfolio's characteristics show that its holdings, on average, have a higher Return on Equity and lower debt/equity (Premium Quality), higher sales growth and higher EPS growth (Superior Growth), as well as higher price/earnings and lower dividend yield (Reasonable Valuation). |
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Performance Report: Touchstone Index Unaware Fund
5 Jul 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund returned -0.96% in May. Since inception in April 2016, the Fund has returned +12.19% per annum.
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5 Jul 2018 - Performance Report: Touchstone Index Unaware Fund
By: Australian Fund Monitors
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| Fund Overview | The portfolio is constructed using Touchstone's Quality-At-a-Reasonable-Price ('QARP') investment process. QARP is a fundamental bottom-up process, however, it also incorporates a top-down risk management framework designed to successfully manage the portfolio during varying market conditions and economic cycles. The Touchstone Fund is concentrated, typically holding between 15-20 stocks. No individual stock will ever make up more than 10% of the portfolio at any one time. The Investment Manager may temporarily exceed the exposure limits of the Fund occasionally, particularly during periods of market volatility, to allow for holdings in excess of this 10% limit where the increase in value of the underlying security is due to market movement. The Fund may also hold between 0-50% of the portfolio in cash. The Fund has a high level of associated risk, therefore, the minimum suggested investment time-frame is 5 years. |
| Manager Comments | At the end of the month the Fund held 21 stocks with an median position size of 4.6%. Overall, the portfolio's holdings had an average price/earnings of 15.1, EPS growth of 16.2%, tangible ROE of 23.2% and dividend yield of 5.0%. The Touchstone Index Unaware Fund primarily selects stocks from the S&P/ASX 300 Index and typically holds 10-30 stocks. It seeks to invest in reasonably priced, good quality companies with a significant share of expected returns coming from sustainable dividends. |
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Performance Report: Qato Capital Market Neutral Fund
4 Jul 2018 - Australian Fund Monitors
The Qato Capital Market Neutral Fund returned -2.81% in May, with the result driven predominantly by Qato's long book.
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4 Jul 2018 - Performance Report: Qato Capital Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund seeks to preserve capital and maximise absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks by generally holding up to 50 S&P/ASX-100 positions (up to 25 long positions & 25 short positions). Historically, the strategy has been uncorrelated to traditional asset classes with a negative beta to equity markets. Qato Capital's process is entirely systematic - stock selection and risk management are all employed in a rules based approach. Positions in Qato's long-portfolio and short-portfolio are rotated monthly dependent upon their Q-Score ranking. The strategy employs no financial leverage/gearing to purchase securities, no derivatives and no financial products to imitate leverage. |
| Manager Comments | At the sector level, Qato had a short bias to the Real Estate sector which rallied +3.13% for the month, hindering performance considerably. Qato held short positions in REITs, with an average performance of that subset of +6.03% for May, with only Westfield producing a negative return (-3.62%). Qato also noted that Telstra (short) provided a favourable 3Q trading update in May, announcing EBITDA would be at the bottom end of its already revised guidance range. Qato expect Telstra to reduce its dividend considerably as a means of stabilising its cash flows. |
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Performance Report: Quay Global Real Estate Fund
3 Jul 2018 - Australian Fund Monitors
The Quay Global Real Estate Fund returned +1.7% in May, taking annualised performance since inception in July 2014 to +13.82%.
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3 Jul 2018 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | The largest contributors to performance in May included Educations Realty Trust (US student accommodation) and Stag Industrial (US Industrial). LEG Immobilien (German Housing) was one of the few detractors, having given up some recent gains. As the take-over of Pure Industrial REIT was completed Quay reinvested the proceeds across their preferred names and introduced a small position in data storage REIT - Coresite Realty Corp. Global real estate delivered +1.3% total return supported by strong gains in the UK, Canada and the US. On a relative basis the Fund benefited by avoiding weaker geographies such as Japan and France. Quay noted they continue to expect the next move by the RBA to be down with a general trend toward a zero interest rate policy (ZIRP) over the medium term, and, as house prices continue to cool across the country, that expectation may soon become the new consensus. |
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