NEWS
24 Mar 2016 - Fund Review: Totus Alpha Fund February 2016
TOTUS ALPHA FUND
Attached is our most recently updated Fund Review on the Totus Alpha Fund.
We would like to highlight the following aspects of the Fund;
- Totus Capital is a Sydney based long short fund manager established in 2012 by Ben McGarry which aims to place equal emphasis on performance and capital preservation. The Fund invests mainly in Australia, but also in other developed economies, with a primary exposure to equity markets.
- The Totus Alpha Fund's investment strategy is to identify structural themes, and then seek to drive performance by investing in securities that have concentrated exposure to those themes. Single stock short positions are used to generate alpha, frequently in under researched parts of the market such as the small and mid-cap space. Index derivatives are used to hedge the portfolio's market risk.
- McGarry qualified as a Chartered Accountant with PWC in 1999 and has 15 years market experience, commencing his career covering European building materials and construction sectors at Morgan Stanley in London. Previous experience included analytical roles at Ausbil, a Sydney based $10bn+ long-only manager, and sell side emerging companies experience at UBS. McGarry's emerging company research with UBS included exposure to a range of sectors including energy, materials, industrials, tech, financials, retail and telecommunications.
- The Fund has delivered an annalised return of 27.32% since inception in March 2012 as compared to 7.77% for the ASX 200 Accumulation Index. The standard deviation has been higher than the Index at 15.34% as compared to 12.32% and the Sharpe ratio is 1.49.
Totus Alpha Fund AFM Fund Review February 2016 (pdf format)
24 Mar 2016 - Bennelong Twenty20 Australian Equities Fund
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| Fund Overview | The Fund is managed as one portfolio but comprises and combines two separately managed exposures: 1. An investment in the top 20 stocks of the markets, which the Fund achieves by taking an indexed position in the S&P/ASX 20 Index; and 2. An investment in the stocks beyond the S&P/ASX 20 Index. This exposure is managed on an active basis using a fundamental core approach. The Fund may also invest in securities expected to be listed on the ASX, securities listed or expected to be listed on other exchanges where such securities relate to ASX-listed securities.Derivative instruments may be used to replicate underlying positions and hedge market and company specific risks. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Accumulation Index. The Fund typically holds between 40-55 stocks and thus is considered to be highly concentrated. This means that investors should expect to see high short-term volatility. The Fund seeks to achieve growth over the long-term, therefore the minimum suggested investment timeframe is 5 years. |
| Manager Comments | For February, the Fund's performance struggled against the strength of the Resource sector, a sector in which the Fund has an underweight stance. Also the Fund had an overweight position in IPH, an intellectual property professional services firm, which performed poorly. IPH was the largest detractor for the month. The Fund benefited from its stock picking in the Healthcare sector and Consumer Discretionary sectors. Click below to read the latest Fund Report. |
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23 Mar 2016 - Fund Review: APN Asian REIT Fund February 2016
APN Asian REIT Fund
Attached is our most recently updated Fund Review on the APN Asian REIT Fund.
We would like to highlight the following aspects of the Fund;
- APN is an ASX-listed fund manager specialising in property investment, with an investment team of six. Established in 1996, APN now has FUM of $A2.1bn including four REIT (Real Estate Investment Trust) funds.
- The APN Asian REIT Fund (Fund) is a property securities fund that invests in a quality portfolio of Asian REITs, listed on the securities exchanges of the Asian Region, with the ability to hold some cash and fixed interest investments.
- The Fund aims to deliver a competitive yield with lower risk than the market. The underlying stocks are selected based on a highly disciplined investment approach that focuses on the fundamentals and number of valuation approaches. The universe can include new IPO's, other corporate actions take place and / or corporate governance improvements at country or REIT level bring new stocks into focus.
- The Fund provides access to a wide spread of property-based revenue streams that are specifically analysed, selected and weighted with the aim of delivering strong and sustainable income returns. The Fund is an unhedged product.
- APN's Asian REIT Fund invests in a portfolio of 25-40 listed Asian REITs with a core philosophy of investing in properties with a sustainable rental income streams.
- The Fund has delivered an annalised return of 17.42% p.a., since inception in July 2011 with standard deviation of 9.52% p.a. The Sharpe and Sortino ratios are 1.44 and 2.70 respectively.
APN Asian REIT Fund AFM Fund Review February 2016 (pdf format)
23 Mar 2016 - Pengana Absolute Return Asia Pacific Fund
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| Fund Overview | The Fund will usually hold 40 to 80 positions and will be well diversified across the various event strategies. In keeping with the absolute return focus the Manager will eliminate market risk where appropriate by hedging market and foreign currency risks. Since inception the Fund has averaged a net equity market exposure of ~10%. Sizing of an investment position will depend on the expected risk adjusted returns while taking account the liquidity and volatility of the stock. In addition, the maximum potential loss on any one position should be greater than 0.5% of the NAV and the position should not exceed 30% participation of stressed volume assuming a $200m NAV. Other criteria considered are ability to hedge and the availability of pair candidates as well as the average bid-ask size. For M&A strategies average long position is 3 to 5.5% and average short position 2 to 5%. |
| Manager Comments | The Fund has a very low correlation and systematic risk (beta) to the FTSE Asia Pacific Total Return Index of 0.06 and 0.02 respectively. For February, the positive performance of the Fund was mostly attributed to the M&A sub-strategy. By region, the investments in Hong Kong/China region resulted the biggest contribution for the month. Australia and Japan were the largest detractors. At month-end, the Fund's gross exposure was at 228.2% and net at 10.1%. Click below to read the latest Fund Manager's Report. |
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22 Mar 2016 - NWQ Fiduciary Fund
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| Fund Overview | The Fund aims to produce returns, after management fees and expenses of between 8% to 11% p.a. over rolling five-year periods. Furthermore, the Fund aims to achieve these returns with volatility that is a fraction of the Australian equity market, in order to smooth returns for investors. |
| Manager Comments | Fund returns were negative for February against a volatile global backdrop and an unsustainable rotation to low quality stocks at the expense of high quality stocks. The Fund's Beta managers, utilizing a range of long/short equity strategies, attributed -0.98% to returns for the month. Alpha managers also contributed negatively to performance, posting attribution of -1.47%. The view of NWQ remains that there exists further potential for destructive equity and bond market in the coming months and therefore the portfolio is overweight to the Alpha or market neutral strategies. Click below to read the latest Fund's Report. |
| More Information |
22 Mar 2016 - Fund Review: Meme Australian Share Fund February 2016
Meme Australian Share Fund
Attached is our most recently updated Fund Review on the Meme Australian Share Fund.
We would like to highlight the following aspects of the Fund;
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The Meme Capital Management is a Perth-based boutique Fund Manager, established in 2012 and manages the Meme Australian Share Fund.
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The Fund specializes in technical and quantitative strategies to identify investment opportunities expected to provide both positive price appreciation and relative price out-performance over the medium to long term.
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The Fund's objective is to outperform the S&P/ASX All Ordinaries Accumulation Index over rolling three year periods, through investing in ASX listed securities outside the S&P/ASX 20. The Fund only takes long positions and does not use derivatives.
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Over the past 12 months, the Fund has returned a positive 7.84%, versus the Index's negative 13.73% return.
21 Mar 2016 - Fund Review: Bennelong Kardinia Absolute Return Fund February 2016
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 an nine year track record.
- The Fund has significantly outperformed the ASX200 Accumulation Index since its inception in May 2006 and also has significantly lower risk KPI's. The Fund has an annualised return of 11.91% p.a. with a volatility of 7.36%, compared to the ASX200 Accumulation's return of 3.74% p.a. with volatility of 14.27%.
- 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.
21 Mar 2016 - Affluence Investment Fund
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| Fund Overview | The Fund does not invest directly into any asset class, rather, it invests in investment managers which satisfy Affluence Funds Management's investment criteria; its investment philosophy is based on a formula developed by CEO/Portfolio Manager Daryl Wilson since the start of his career in 1999. The Fund targets total returns of at least 5% above inflation over rolling 3 year periods with volatility of returns less than 50% of the ASX200 Index. The Fund also aims to provide investors with a distribution yield of at least 5% p.a. Finally, the Fund aims to outperform the Australian stock market (S&P/ASX 200 Accumulation Index) by at least 5% in any year in which that index delivers a negative return. To ensure appropriate diversity of managers and limit the potential for conflicts of interest, no more than 20% of the Fund will be invested with any one manager. Affluence seeks to achieve the Funds' investment objective by choosing attractively priced investments overseen by quality managers. The Fund uses a number of processes to identify potential investments including quantitative screens for investments which meet historical performance, volatility and other criteria. They also use a number of external researchers and information sources to assist in this process. |
| Manager Comments | For February the Fund saw an unusually wide variation in results from the underlying managers The best performing investments were in the resources space, while the worst results were from the long-short managers, who were negatively affected. At the end of the month, the Fund held investments in 15 unlisted funds, which represented 65% of the total portfolio. It also held 16 investments in listed investment companies and other listed securities, representing 14% of the portfolio. The balance of 21% was held in cash, which Affluence is ready to deploy if and when an opportunity arises. Click below to read the latest Fund Manager's report. |
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21 Mar 2016 - APN AREIT Fund
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| Fund Overview | The senior management of APN FM all have significant experience in their fields. They include CEO Real Estate Securities, Michael Doble who has 25 years'experience having held various senior roles specialising in real estate valuation, consultancy and funds management. Immediately prior to joining APN in 2003 he was Head of Property at ANZ Funds Management. He is a fellow of the Australian Property Institute and FINSIA as well as holding a Bachelor of Business (Property). The Fund aims to deliver a competitive yield with lower risk than the market. The underlying stocks are selected based on a highly disciplined investment approach that focuses on the fundamentals and number of valuation approaches. The Fund provides access to a wide spread of property-based revenue streams that are specifically analysed, selected and weighted with the aim of delivering strong and sustainable income returns. The Fund is suited to medium to long term investors seeking a relatively high monthly income and some capital growth over the long term. |
| Manager Comments | In February, the Fund had 97% allocation in AREITs assets and rest in cash. Majority of the underlying property sector allocation was in the Retail sector at 64%, followed by Office sector at 19%. The Top 5 stocks holdings made up 56% of the Fund's portfolio. These stocks were Scentre Group, Vicinity Centres, Stockland, Charter Hall Retail REIT and Westfield Group. Click below to read the complete Fund Manager's Report. |
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19 Mar 2016 - Hedge Clippings
Fed backs off next rate rise
With negative interest rates ruling in many parts of Europe it is probably no surprise to many Fed watchers that the next rise has been kicked further down the track. And as much as the Fed would like the economy to be performing sufficiently well to warrant a further 0.25% rise from historically low levels, the reality is that it is not much more than tepid economic recovery at best. So the "no" decision probably came as no great surprise.
Equity markets liked the news however, but no doubt rallied broadly on a relative yield basis. One has to wonder however, with more debt out in the market than there was pre GFC, what is going to happen come roll-over time if rates ever get back up towards even mid-single digits? No doubt the Fed is hoping there will be sufficient strength in the economy to sustain debt servicing levels, but the way it's looking the world seems well and truly locked in to a low inflation-low growth-low rates scenario for some time to come.
So in spite of the stability of that 3 way "low" scenario, volatility is likely to continue as central banks simply don't have any levers left to pull if they need to.
Meanwhile our attention was drawn to a headline in today's Financial Times titled "Hedge fund closures back to crisis highs" as some of the biggest names in the industry returned funds to their investors after suffering losses. The difference is that this time around the closures are voluntary, not forced on the managers by liquidity mis-matches and (panic) redemptions, and much of the returned capital will be re-allocated into other funds. Certainly some of the largest global funds, with many billions invested (often the manager's own capital) have had disappointing returns, but returning investor's capital because the manager sees that the time is not right for their strategy is a long cry from the chaos of 2008.
Performance updates and reviews received this over the past week included the following PERFORMANCE UPDATES:
Against a backdrop of further volatility in commodities and general de-risking in February the ASX200 Accumulation Index fell 1.76% to take 12 month performance to -13.73% . The S&P500 fell 0.13% for the month and -6.19% over 12 months. With a sharp "beta" rally towards the end of the month some funds found the going tough. Meanwhile:
Clarity Multi Strategy Fund rose 6.04%, outperforming the AFM Global Equity Index which fell 1.45%, by 7.49%. Over the past 12 months the fund has returned 26.79%.
Bennelong Kardinia Absolute Return Fund fell 1.78% in February taking 12 month performance to 0.59%, outperforming the index by over 14%. Since inception in 2006 the Fund has an annualised return of 11.91% p.a. with Standard Deviation of 7.36% for a Sharpe ratio of 1.02.
Meme Australian Share Fund returned -1.71% for February bringing the Fund's 24-months performance to 36.16%.
The Pengana Global Small Companies Fund returned -0.33% for the month of February, compared to a -0.44% return for the MSCI AC World SMID Cap Index.
The Paragon Fund returned -5.20% for February, brining the Fund's annual return since inception to 14.73% p.a. and a Sharpe ratio of 1.05
Signature Quantitative Fund fell -2.50% in February to take latest 24-month return to 12.47%.
The APN Asian REIT Fund rose 6.53% for February. Since inception the Fund has an annualised return of 17.42% p.a.
Totus Alpha Fund returned -11.27% for the month of February. The Fund has returned +31.26% over the past 12 months.
FUND REVIEWS released this week: Optimal Australia Absolute Trust; Bennelong Long Short Equity Fund; Morphic Global Opportunities Fund;
And on that note, have a great week-end.
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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