NEWS
11 Nov 2016 - Bennelong Kardinia Absolute Return Fund
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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 a 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 macroeconomic outlook and the ability and willingness to adjust the Fund's market risk. |
| Manager Comments | Healthscope, Bapcor, Star Entertainment and Skycity Entertainment were the largest detractors from performance, whilst a short position in Scentre Group and longs in Rio Tinto, Whitehaven Coal, and Commonwealth Bank were the most significant positive contributors. Net equity market exposure (including derivatives) was reduced to 34.2% (47.7% long and 13.6% short) Click below to read the latest Fund Report. |
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10 Nov 2016 - Alexander Credit Opportunities Fund
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| Fund Overview | The Fund may also invest in derivatives for hedging purposes. The portfolio of the Fund comprises primarily Investment Grade holding of 75% of the Fund's assets. Benchmark allocations are Australasia 50% to 100%, North America 0% to 50% and Europe 0% to 50%. Currency hedging may take place depending on benefits to the Fund. |
| Manager Comments | Click below to read the latest monthly report. |
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9 Nov 2016 - Optimal Australia Absolute Trust
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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 | For the month of October, REITs and Health Care were the worst performing sectors. This benefited the Fund's performance has it had some short exposure to the Healthcare sector. Also, the Fund was largely unaffected by the headlines in the gaming sector (Crown employees detained in China; Sky City profit warning), and the China-facing growth stocks (Bega/Blackmores). The Fund was negatively affected by continued GBP currency weakness, which impacted two of the Fund's high-conviction longs in Hendersons and Clydesdale Bank. At month-end, the Fund had a gross exposure of 93.9% and net exposure -1.5%. The investment team continues to maintain a defensive posture towards market risk and has positioned the portfolio accordingly. Click below to read the latest Fund monthly report. |
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8 Nov 2016 - Bennelong Long Short Equity Fund
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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. |
| Manager Comments | Performance this month featured a broadly even number of winning versus losing pairs but on balance, gains from the short book didn't quite compensate for losses in the long book. In terms of strongest contributors, the best pair was in healthcare, a short position in Healthscope (a private hospital operator), which fell -28% following a profit downgrade at its Annual General Meeting. Also, two pairs in the financial sectors, particularly the short position in AMP, were strong contributors. Some of the pairs that detracted from performance came from the consumer, energy, and the resources sectors. Click below to read the Fund Manager's commentary and market outlook. |
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5 Nov 2016 - Hedge Clippings
Inertia and indecision to decide the outcome.
The spectre of President Trump is looming larger than ever with investors certainly taking risk off the table - or at least holding fire until the outcome of Tuesday's vote is known, next Wednesday (AEST).
What seemed unthinkable until recently to those outside the Trump camp is now a distinct possibility, but this is going to be difficult to predict and according to the polls, will go down to the wire. There is no doubt that like the recent Brexit vote, it will be the voters who DON'T vote who will decide the outcome of who sits in the White House for the next four years.
As bizarre as this might seem in a country with compulsory voting such as Australia, there is no doubt that Americans, and probably the British, who think a system whereby an upper house candidate can do secret deals and thus, in spite of only achieving a minute vote in percentage terms, hold sway over the government of the day, is equally crazy. Or that the State with the smallest population has the same representation in the Senate as the largest.
And while on politics and Brexit, an interesting dilemma has emerged for British MP's, with the High Court ruling overnight that any decision to invoke Article 50 to leave the EU must be made in Parliament. Should each MP follow the outcome of a national referendum, where less than 40% of the eligible population voted to leave? Or should they abide by the wishes of the voters of their own constituency, who elected them in the first place, the majority of whom may have voted to stay?
Meanwhile to markets: Trump as Commander-in-Chief would undoubtedly un-nerve markets if for no other reason than it will invoke change, uncertainty, and a fear of the unknown. A second President Clinton (back) in the Oval Office will unnerve investors based on higher taxes, and a Democrat who according to many, (including the Russians who have reportedly been behind her hacked email account) has a dubious past.
Hence risk off.
Meanwhile October fund performances have yet to emerge, but with the ASX falling 2.15% over the month for a 12 month return of 6.1% there is likely to be the usual range.
FUND REVIEWS released this week: Insync Global Titans Fund
And on that note, have a great weekend.
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
Connect with me on LinkedIn Twitter Facebook
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Registration to AFM is free and provides general information and performance data on Absolute Return, Hedge Funds, and Alternative Investments. |
Fund Managers and paid Subscribers have access to details on Individual Managers and Funds, with historical results, key performance indicators, latest news and performance reports. |
Prism Select provides self-directed investors and their advisors with factual information, performance data and opportunity to apply for funds online using OLIVIA123 . |
Tune into Sky Business on Foxtel every week at the new time of10:45 am on Friday's for AFM's weekly comment. |
Australian Fund Monitors are helping to raise awareness to support research into prevention and cure for cerebral palsy. For more information visit www.cpresearch.org.au or contact me by email.
31 Oct 2016 - Fund Review: Insync Global Titans Fund September 2016
INSYNC GLOBAL TITANS FUND
Attached is our most recently updated Fund Review on the Insync Global Titans Fund.
We would like to highlight the following:
- The Fund's unit price decreased by 1.75% in September. The performance was driven by positive contributions from the holdings in Paypal, BAT, Diageo, Unilever and Visa Inc. The main negative contributors were Medtronic, Reckitt Benckiser, Mead Johnson Nutrition and Oraclen.
- The Global Titans Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend growth and downside protection.
- Portfolio selection is driven by a core strategy of investing in companies with sustainable growth in dividends, high returns on capital, positive free cash flows and strong balance sheets.
- Emphasis on limiting downside risk is through extensive company research, the ability to hold cash and long protective index put options.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - September 2016 (pdf format)
29 Oct 2016 - Hedge Clippings
Could we be misjudging the US election outcome?
We are less than two weeks away from the US election which will provide both a media frenzy, and likely decide all our futures. Sitting in Australia the feeling is that no one in their right mind would vote for a President Trump, but sitting in Australia we are not voting.
However, what happens if Trump wins? And could Trump be Hilary Clinton's greatest electoral asset, who based on Wikileaks reports might not be a perfect candidate anyway?
Is there the possibility that like Brexit, a combination of non-compulsory voting, voter apathy with conventional politics, and not being close enough to the detail, means that we are not in a good place to judge the outcome? Today's media seems to indicate that the unthinkable might actually happen.
Either way, Hilary Clinton has promised to raise taxes and spend $500 billion on infrastructure. Trump has promised to reduce taxes and spend double that on infrastructure. That will surely change the supply/demand ratio in the bond market, and send interest rates upwards.
In that environment what will happen to equities? The optimists are hoping that increased economic activity will generate sufficient growth to offset the increase in interest rates, while the doomsday merchants believe it's all going to come down to a case of tears before bedtime.
Remembering what happened when interest rates rose unexpectedly in 1987 - before the stock market crashed - even without the buildup of debt we have seen over the past 7 years, suggests caution will be the investor's best friend.
Pengana PanAgora Absolute Return Global Equities Fund rose 1.77% in September. The Fund continues to have a low systematic risk (beta) to the ASX200 and the MSCI World Indices of 0.08 and 0.09 respectively.
APN AREIT Fund returned -3.21% in September. The long term performance since inception remains strong with annual returns of 17.90% p.a.
Totus Alpha Fund returned -5.31% in September. Since inception, the Fund has an annualised return of 24.74% p.a.
Insync Global Titans Fund returned -1.75% in September, compared to the MSCI All Country World ex-Australia Net Total Return Index in $A, which returned -1.20%.
King Tide NZ/Australian Long/Short Equity Fund rose 1.83% in September and +23.77% over the latest 24-months.
FUND REVIEWS released this week: Qato Capital Market Neutral Long/Short Fund; Bennelong Twenty20 Australian Equities Fund;
And on that note, have a great weekend.
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
Connect with me on LinkedIn Twitter Facebook
|
Registration to AFM is free and provides general information and performance data on Absolute Return, Hedge Funds, and Alternative Investments. |
Fund Managers and paid Subscribers have access to details on Individual Managers and Funds, with historical results, key performance indicators, latest news and performance reports. |
Prism Select provides self-directed investors and their advisors with factual information, performance data and opportunity to apply for funds online using OLIVIA123 . |
Tune into Sky Business on Foxtel every week at the new time of10:45 am on Friday's for AFM's weekly comment. |
Australian Fund Monitors are helping to raise awareness to support research into prevention and cure for cerebral palsy. For more information visit www.cpresearch.org.au or contact me by email.
28 Oct 2016 - Insync Global Titans Fund
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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 positive contributors for the month came from the Fund's holdings in Paypal, BAT, Diageo, Unilever and Visa Inc. The main negative contributors were Medtronic, Reckitt Benckiser, Mead Johnson Nutrition and Oracle. The Fund continues to have no foreign currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Over 50% of the fund is currently protected using their put protection strategy. Click below to read the latest Fund Manager Report. |
| More Information |
28 Oct 2016 - King Tide NZ/Australian Long/Short Equity Fund
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| Fund Overview | The Fund seeks to outperform the market with less volatility than the market by allocating capital to a select group of eight to sixteen funds whose investment mandates allow them to use short selling of equities and equity indices, to use derivatives to manage risk, to use leverage and to hold large amounts of cash. In-depth proprietary research is used to select and monitor fund managers with particular emphasis on their ability to manage equity market risk through stock selection, short selling and the use of derivatives and cash. |
| Manager Comments | There were few changes to the Fund's portfolio composition over the month. They redeemed their positions in two funds, Aspiring and Kardinia, both of which had been in the fund since its inception. Two new long/short strategy fund managers were added to the portfolio. Both funds ticked many of the boxes that King Tide look for in a manager such as great track record, simple fundamental bottom-up strategy and low correlation to market returns. Click below to read the latest monthly report. |
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27 Oct 2016 - Fund Review: QATO Capital Market Neutral Long/Short Fund September 2016
QATO Capital Market Neutral Long/Short Fund
Attached is our most recently updated Fund Review on the QATO Capital Market Neutral Long/Short Fund.
We would like to highlight the following aspects of the Fund;
- Qato Capital is a Melbourne-based boutique fund manager backed by single family office, Larkfield Funds Management.
- Qato has a systematic, market-neutral strategy which invests exclusively in S&P/ASX 100 stocks.
- The QATO Capital's Q-score process captures and quantifies six broad fundamental factors, which assess multiple underlying sub-categories. Those companies with the top score (quality companies) are included in the "long" portfolio, those with the lowest score are sold short.
- The Fund seeks to preserve capital and maximises absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks through 30 S&P/ASX-100 positions (15 long & 15 short equally-weighted positions).
- Qato Capital's process is entirely systematic - stock selection and risk management are employed in a rules-based approach. The Fund employs no financial leverage/gearing to purchase securities, no derivatives, and no financial products to imitate leverage.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - September 2016 (pdf format)
