NEWS
Performance Report: Touchstone Index Unaware Fund
4 Jan 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +3.09% in November, outperforming the ASX200 Accumulation Index by +1.45%.
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4 Jan 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 | 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: 4D Global Infrastructure Fund
3 Jan 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +2.18% in November, outperforming it benchmark (OECD G7 Inflation Index +5.5%) by +1.44%.
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3 Jan 2018 - Performance Report: 4D Global Infrastructure Fund
By: Australian Fund Monitors
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| Fund Overview | The fund will be managed as a single portfolio of listed global infrastructure securities including regulated utilities in gas, electricity and water, transport infrastructure such as airports, ports, road and rail as well as communication assets such as the towers and satellite sectors. The portfolio is intended to have exposure to both developed and emerging market opportunities, with country risk assessed internally before any investment is considered. The maximum absolute position of an individual stock is 7% of the fund. |
| Manager Comments | Top performers in November included US Tower operator SBA Communications (+15.7%) and Spanish airport operator AENA (+10.3%). The weakest performer was again UK satellite operator Immarsat, down 18.1% as the market becomes increasingly concerned about Immarsat's guidance and the execution of its maritime strategy. The Manager believes the sell-off has been overdone and expect the long-term investment fundamentals to remain intact and differentiate it from the broader satellite sector. The Manager's outlook for global listed infrastructure over the medium term remains positive. They note there has been a significant underinvestment in infrastructure around the world over the past 30 years and that public sector fiscal and debt constraints will limit governments' ability to respond, resulting in an increasing need for private sector capital as part of the funding solution. |
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Performance Report: MHOR Australian Small Cap Fund
2 Jan 2018 - Australian Fund Monitors
The MHOR Australian Small Cap Fund returned +4.04% in November, outperforming the ASX200 Accumulation Index by +2.4% and taking 12-month performance to +22.80%.
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2 Jan 2018 - Performance Report: MHOR Australian Small Cap Fund
By: Australian Fund Monitors
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| Fund Overview | MHOR looks for investment that exhibit the following set of characteristics: -Opportunity - to take advantage of growth and positive alignment with industry themes and trends. -Quality business - competitively advantaged product or service offering. -Financial flexibility - appropriately resourced to capture its opportunity. -Management - with the vision and capability to bring it all together. -Fundamentally undervalued. MHOR also considers labour standards, environmental, social and ethical considerations when making investment decisions but only to the extent that these factors impact the assessment of risk or return. The minimum suggested investment timeframe is 3-5 years. |
| Manager Comments | The largest positive contributors in November were SpeedCast International (SDA), Orocobre (ORE) and Spirit Telecom (ST1). MHOR noted that SDA rose in response to higher oil prices and an upbeat presentation delivered by management at a broker conference. MHOR still think SDA shares are cheap, with an improving outlook and balance sheet likely to drive further re-rating. MHOR also noted the growing market acceptance of EV as the next global megatrend continues to drive up battery minerals stocks, such as ORE. MHOR entered November with 33 stocks and 13.5% cash, exiting with 33 stocks and 13.1% cash. The key detractor from November's performance was TopBetta (TBH) which slid after the September Quarterly report revealed their higher than anticipated costs to support the very strong turnover growth. After recently meeting with management, MHOR are further convinced on this position and see very near term positive catalysts for the stock price. |
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Performance Report: Qato Capital Market Neutral Fund
1 Jan 2018 - Australian Fund Monitors
The Qato Capital Market Neutral Fund contracted -2.55% in November, with the continued rally in the ASX-100 hindering Qato's short book as it finished up +1.40%.
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1 Jan 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 | The Fund was heavily exposed to the Real Estate sector which ended up +4.74% in November, with long positions in Stockland (+3.98%), Charter Hall (+8.79%), Investa Office Fund (+7.14%), Dexus (+6.04), Lendlease (-1.91%), and GPT (+6.29%), whilst having just one short position - Westfield Retail Trust (+7.85%). In the IT sector, the fund's short in Link Market Services (+3.4%) countered most of Computershare's return (+5.71%). Qato's short in Santos offset most of the gains in the Fund's long position in Origin Energy, however, Qato successfully selected the only energy company that fell during the month - Oil Search (-4.88%). Other positive and negative contributors included a long in James Hardie (+8.06%), short Graincorp (-4.91%), short TPG Telecomm (+10.19%), short Dulux (+9.42%) and long ALS (-12.66%). |
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Performance Report: Bennelong Kardinia Absolute Return Fund
1 Jan 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund returned +0.35% in November. Since Inception in May 2006, the Fund has returned +10.84% per annum and outperformed the ASX200 Accumulation Index by +5.15%.
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1 Jan 2018 - Performance Report: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. Detailed analysis of company valuations using financial statements and forecasts, particularly focusing on free cash flow, is conducted. Technical analysis is used to validate the Manager's fundamental research and valuations and to manage market timing. A significant portion of the Fund's overall performance can be attributed to the attention and importance given to the macro economic outlook and the ability and willingness to adjust the Fund's market risk. |
| Manager Comments | Positive contributors included New Century Zinc (+21bp contribution), Mineral Resources (+19bp), REA Group (+15bp), Boral (+14bp) and Janus Henderson (+13bp). Negative contributors included ALS Limited (-20bp), Aristocrat Leisure (-18bp), RCR Tomlinson (-16bp), Alumina (-14bp) and BWX (-12bp). Net equity market exposure (including derivatives) was increased from 65.5% to 72.3% (79.5% long and 7.2% short) as Bennelong increased the Fund's position size in CSL and added 10 new stocks including Commonwealth Bank, Star Entertainment, Netwealth and Santos. |
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Performance Report: Pengana Global Small Companies Fund
29 Dec 2017 - Australian Fund Monitors
The Pengana Global Small Companies Fund rose +2.85% in November, taking annualised performance since inception in April 2015 to +12.06% with a volatility of 8.75%.
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29 Dec 2017 - Performance Report: Pengana Global Small Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed by Founder & CIO Leah Zell, and Portfolio Managers Jon Moog and David Li. The Lizard investment team have over 50 years combined investment experience in global small cap investing. Leah Zell has over 30 years of experience and is a recognized expert in international investing in the international small-cap category. The Fund's investment team uses a value-oriented investment approach to small and mid-cap global equities that seeks to identify and invest in quality businesses that create significant value but are mispriced, overlooked or out-of-favour. The investment manager believes that unique opportunities exist due to limited available research, corporate actions or unfavourable investor perception. The portfolio construction process aims to develop portfolios that incorporate the best investment ideas from the investment manager's research while allowing for liquidity constraints and perceived risk. The Fund's investment manager will not typically hedge currency exposures, however during periods of currency extremes, some currency hedging may be employed. Derivatives may be used to achieve long or short exposures, reduce risk and reduce transaction costs. Derivatives will not be used for the purposes of leverage and the Fund's net exposure will never be short. |
| Manager Comments | The largest contributor in November was Motorpoint, a UK auto dealer. PRA also contributed meaningfully this month after some earlier challenges. The Fund added one new holding during the month, a Canadian software business. Pengana noted the company has been an excellent allocator of capital over the last 20 years and that they expect the value creation to continue for an extended period. Pengana noted the Fund's underperformance relative to its benchmark (MSCI All Country World SMID Cap Index unhedged in AUD) was primarily due to the Fund's relatively underweight position in the US. However, the Fund's stocks in the US and the UK outperformed the benchmark, demonstrating strong stock selection. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
29 Dec 2017 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund fell -0.50% in November. Since inception in January 2009 the Fund has returned +18.92% per annum.
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29 Dec 2017 - 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 | At the end of November, the Fund's weighting were increased in the Consumer Staples, Health Care and Materials sectors and were decreased in the Discretionary, Industrials and Financials sectors. The Fund currently holds 21 stocks. The Fund's investment philosophy is to selectively invest in high quality companies with strong growth outlooks and underestimated earnings momentum prospects, this is highlighted by the Fund's portfolio characteristics as shown in the latest report. |
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Performance Report: Glenmore Australian Equities Fund
28 Dec 2017 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +3.81% in November, outperforming the ASX200 Accumulation Index by +2.17% and taking performance since inception in June 2017 to +24%.
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28 Dec 2017 - 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 | Positive contributors in November included Appen (+32.2%), Moelis Australia (+9.8%) and Mastermyne Group (+8.5%). The Fund also participated in the IPO of Propel Funeral Partners (PFP) during the month. PFP is the second largest provider of death care services in Australia and New Zealand. Detractors for the month were Pacific Current Group (-3.6%) and Integrated Research (-3.9%). Glenmore noted the Fund had partially reduced its position in Integrated Research given the stock price appreciation prior to November, however, they believe the earnings profile for the business remains very strong with EPS growth of approximately 20% forecast in the next 3 years. |
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Performance Report: Cyan C3G Fund
27 Dec 2017 - Australian Fund Monitors
The Cyan C3G Fund returned +2.4% in November, taking annualised performance since inception in July 2014 to +28.25%.
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27 Dec 2017 - Performance Report: Cyan C3G Fund
By: Australian Fund Monitors
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | Positive contributors in November included Experience Co (+19%), Moelis (+10%) and Spirit Telecom (+30%). Negative contributors included Bluesky Alternatives (-9%), Kelly Partners (-6%), PSC Insurance (-4%), Axsesstoday (-2%). Cyan noted none of these retracements were due to company specific news, they view it as short-term profit taking and remain very optimistic about the medium term outlook of each business. Cyan noted the small cap market remains relatively buoyant and their outlook for the companies they hold is positive. Some of the Fund's larger holdings Cyan expect to generate meaningful returns into 2018 include Axsesstoday, Kelly Partners, Experience Co, Motorcycle Holdings, PSC Insurance and Bluesky Alternatives. Cyan hope to complement these with some new positions taken recently in both the IPO and secondary markets. The Fund continues to hold a significant cash balance which Cyan will look to carefully deploy as opportunities arise. |
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Fund Review: Bennelong Kardinia Absolute Return Fund November 2017
26 Dec 2017 - Australian Fund Monitors
Latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available.
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26 Dec 2017 - Fund Review: Bennelong Kardinia Absolute Return Fund November 2017
By: Australian Fund Monitors
AFM Fund Review - November 2017 (pdf format)
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.
- The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies with over ten-year track record.
- The Fund has significantly outperformed the ASX200 Accumulation Index since its inception in May 2006 and also has significantly lower risk KPIs. The Fund has an annualised return of 10.84% p.a. with a volatility of 7.00%, compared to the ASX200 Accumulation's return of 5.69% p.a. with a volatility of 13.62%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Mark Burgess and Kristiaan Rehder have significant market experience, while Bennelong Funds Management provide infrastructure, operational, compliance and distribution capabilities.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - November 2017 (pdf format)
