Optimal Australia Absolute Trust

19 Aug 2015 - Australian Fund Monitors

Optimal Australia Absolute Trust reported a net return of +0.31 in July.

19 Aug 2015 - Optimal Australia Absolute Trust

By: Australian Fund Monitors

Report Date	14 August 2015
Manager	Optimal Fund Management Australia
Fund Name	Optimal Australia Absolute Trust
Strategy	Equity Long/Short
Latest Return Date	July 2015
Latest Return	0.30%
Latest 6 Months	4.13%
Latest 12 Months	0.06%
Latest 24 Months	6.44%
Annualised Since Inception	8.76%
Inception Date	15 September 2008
FUM (millions)	AU$100
Fund Overview	The investment objective of the Fund is to seek to achieve above average returns in absolute terms, through investing in listed securities in Australia and New Zealand, subject to the overarching requirement of capital preservation. Investments will predominantly be in equity securities but may include fixed interest instruments, money market instruments, derivatives and foreign exchange contracts. 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	Optimal Australia Absolute Trust reported a net return of +0.31 in July. The Fund's annualised return since inception was 8.76% p.a. (Index 6.10% p.a.), which has been achieved with a notably low volatility of 3.69% p.a. (Index 14.34% p.a). The Fund's long positions rose broadly in-line with the market - key performers included a number of financials (AMP, NAB, SUN and WFD) and general industrial. However the short positions were the largest detractors in such a strong market, which proved expensive as a means of heding portfolio risk. The Fund gross exposure was 121.1% and net exposure 2.1%. Click below to read the latest Fund Manager's commentary on the Fund and market outlook.
More Information	Fund Profile Manager's Report AFM Research Reports

Bennelong Kardinia Absolute Return Fund

18 Aug 2015 - Australian Fund Monitors

The Bennelong Kardinia Absolute Return Fund rose 2.2% in July, to bring the annualised performance since inception to 12.84% (ASX200 Accumulation Index 5.37%).

18 Aug 2015 - Bennelong Kardinia Absolute Return Fund

By: Australian Fund Monitors

Report Date	14 August 2015
Manager	Kardinia Capital, a Bennelong Funds Management boutique
Fund Name	Bennelong Kardinia Absolute Return Fund
Strategy	Equity Long/Short
Latest Return Date	July 2015
Latest Return	2.20%
Latest 6 Months	3.67%
Latest 12 Months	9.57%
Latest 24 Months	17.27%
Annualised Since Inception	12.84%
Inception Date	01 May 2006
FUM (millions)	AU$221.8
Fund Overview	The Fund consists of a concentrated long/short portfolio typically comprising 20 to 50 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. On average since inception the Fund's exposure has averaged 40% net long. There is a slight bias to large cap stocks on the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. 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	The Bennelong Kardinia Absolute Return Fund rose 2.2% in July, to bring the annualised performance since inception to 12.84% (ASX200 Accumulation Index 5.37%). The Fund has achieved this return with lower volatility (7.29%) than the Index (14.18%) to give notable Sharpe and Sortino ratio 1.13 (Index 0.11) and 2.16 (Index 0.06) respectively. The Fund's net equity market exposure (including derivatives) of the Fund was progressively increased post the Greek resolution and Chinese support measures to 55.7% (87.1% long and 31.4% short). Westpac, Ramsay Health Care, CSL and Aristocrat were the largest positive contributors, whilst Share Price Futures (hedging long exposures), Costa, Isentia and BHP Billiton were the largest detractors. Click below to read the June 2015 Fund Report.
More Information	Fund Profile Manager's Report AFM Research Reports

Fund Review: Monash Absolute Investment Fund July 2015

17 Aug 2015 - Australian Fund Monitors

Read the latest Fund Review with statistics since inception on Monash Absolute Investment Fund.

Allard Investment Fund

17 Aug 2015 - Australian Fund Monitors

The Allard Investment Fund's (AIF), net of all fees, increased 2.70% during the month of July 2015 (MSCI Asia Pacific ex Japan A$ +0.3%).

17 Aug 2015 - Allard Investment Fund

By: Australian Fund Monitors

Report Date	10 August 2015
Manager	Allard Partners Australia Pty Limited
Fund Name	Allard Investment Fund
Strategy	Equity Long
Latest Return Date	July 2015
Latest Return	2.70%
Latest 6 Months	2.73%
Latest 12 Months	19.85%
Latest 24 Months	29.23%
Annualised Since Inception	9.81%
Inception Date	01 July 2003
FUM (millions)	AU$134
Fund Overview	Allard Partners is an absolute return, long only security investor with a single mission to provide its clients with a net compound rate of return on their capital of 15% per annum over the long term. With offices in Hong Kong, India and Australia, Allard invests in quoted companies in the Asia Pacific region. Allard's investment approach has remained consistent throughout their history. That is to invest prudently but proactively in well-managed businesses that achieve superior returns on capital in industries with long-term growth potential. The Manager uses both broad top-down guidance and detailed bottom-up analysis to identify suitable markets, industries and companies. As long only investors, a critical factor in their performance has been their preparedness to hold cash when they cannot find companies that meet their criteria or are at a sufficient discount to their valuations.
Manager Comments	The Allard Investment Fund's (AIF), net of all fees, increased 2.70% during the month of July 2015 (MSCI Asia Pacific ex Japan A$ +0.3%), to bring the Fund's latest 12 month performance to 19.85% with a volatility of 7.88%. For the month of July, the Fund's portfolio was invested 77.7% in equities and 22.3% in cash and fixed income. The Fund continues to have most exposed to the Financial Services industry at 18.2%, Conglomerates at 10.7% and Telco's at 10.1%. The portfolio's geographic exposure was in Hong Kong / China at 43.2%, Singapore 10.7% and Korea 9.4%. The top 5 holdings had 39.7% concentration of the portfolio and 17.5% in the next 5 holdings. Click below to review the latest Fund Manager's Report.
More Information	Fund Profile Manager's Report

Hedge Clippings

15 Aug 2015 - Australian Fund Monitors

Known knowns, and surprising surprises

15 Aug 2015 - Hedge Clippings

By: Australian Fund Monitors

Known knowns, and surprising surprises

Maybe it was just the team at Hedge Clippings that weren't expecting it, but we should know that surprises that are unexpected are more damaging than those that are. I'm sure there's a lack of logic in there somewhere because surprises that are expected can't be a surprise, as am sure some of our readers will pick up on.

What we are getting at is this: Greece wasn't really a surprise as many investors were fully aware of the problems for four or five years. So when the potential of Grexit finally came to the crunch, although there were some market wobbles, most investors had come to terms with reality.

Ditto, we expect, with interest rate rises in the US. Although we have yet to see an actual rise to occur, it would be difficult for any investor to say they weren't aware of what is going to happen, even if that doesn't mean to say there won't be a significant market reaction when the inevitable happens.

The China situation is a little different. Firstly there had been differing views on the Chinese economy, with some participants following the line that the Chinese economy would stay "stronger for longer", whilst others were talking about the inevitability of a slowdown. Secondly, until very recently Chinese economic data wasn't as transparent as many would have liked, so no one really knew.

What shouldn't take investors by surprise is the determination of the Chinese authorities to retain tight controls, be they on the economy, markets, the currency, or if it comes that any other aspect of life in China. Their attempts to control the markets by limiting investors' ability to sell stocks for example, were ham fisted at best, but did show they meant business, and in the short-term at least appear to have been reasonably successful.

What did take investors by surprise was their devaluation of the Yuan this week, not once, not twice, but three days in a row, and counting. And what markets hate most is either an absence of information, or being surprised by it when it occurs.

Specific results received this week include the following PERFORMANCE UPDATES:

The Monash Absolute Investment Fund rose 6.6% in July, comfortably beating the ASX200 Accumulation Index by 2.2%, with a low beta (0.61).

Bennelong Long Short Equity Fund performance was a strong +8.85% in rebounded share market (ASX200 Accumulation Index 4.40%).

The Paragon Fund returned +4.30% for the month of July 2015. Since inception the Fund has a cumulative return of +55.96% vs. the ASX200 Accumulation Index +23.48%.

Morphic Global Opportunities Fund rose 5.13% in July to bring annual performance since inception to 27.84% p.a.

Fund In Focus: Morphic's Global Opportunities Fund. Click here to watch their joint CIO Chad Slater discuss the Fund's performance and his outlook for glaobal markets.

FUND REVIEWS released this week: Supervised High Yield Fund

UPCOMING EVENTS:

20 - 21 August 2015 - The 2nd Superannuation Fund Investment Operations Forum 2015 is a two day forum providing invaluable technological, regulatory compliant and best practice insights into improving back and middle office efficiency to drive member loyalty, bottom line profitability and a competitive edge

26 - 28 August 2015 - The 15th Annual Wraps, Platforms & Masterfunds Conference will provide solutions for succeeding in a distribution world of endless possibilities, showcasing strategies to help business achieve the biggest bite of market share, use innovation to overcome problems and support opportunities. A ustralian Fund Monitors is pleased to offer a discount of $300 to all investors and advisors using coupon code promoFM on registration.

17 September 2015 - The 14th Annual Hedge Fund Rock and Australian Hedge Fund Awards 2015 as the industry lets its hair down with some drinks, music and great videos. All proceeds go to Redkite helping childern with cancer and their families.

A couple of suggestions for And Now for Something Completely Different recieved this week were "interesting" to say the least, but probably would not have been appreciated by all our subscribers. Thank you anyway - I tried the cider, but am still looking for the watch.

As much as we don't like to replay old clips, this one is special, partly as it was the first one we ever used, and partly because it is still such great value. Enjoy!

On that note, have a good week-end.

Regards,

Chris
CEO, AUSTRALIAN FUND MONITORS

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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.

Morphic Global Opportunities Fund

14 Aug 2015 - Australian Fund Monitors

Morphic Global Opportunities Fund rose 5.13% in July as its benchmark (MSCI AC World Total Return in Australian Dollars) rose 5.57%, resulting in under-performance of 0.44%.

The Paragon Fund

13 Aug 2015 - Australian Fund Monitors

The Paragon Fund returned +4.30% after fees for the month of July 2015. Since inception the Fund has a cumulative return of +55.96% after fees vs. the ASX200 Accumulation Index +23.48%.

13 Aug 2015 - The Paragon Fund

By: Australian Fund Monitors

Report Date	10 August 2015
Manager	Paragon Funds Management
Fund Name	The Paragon Fund
Strategy	Equity Long/Short
Latest Return Date	July 2015
Latest Return	4.30%
Latest 6 Months	9.87%
Latest 12 Months	5.63%
Latest 24 Months	51.65%
Annualised Since Inception	20.19%
Inception Date	28 February 2013
FUM (millions)	AU$31.1
Fund Overview	The Paragon Fund is a concentrated long/short Australian equities product that is fundamentally driven with a focus on the industrial and resource sectors. Paragon's own research process and active portfolio management is overlaid with risk management and an overarching focus on capital preservation. Paragon believes that markets are not always efficient, exhibiting a common tendency to price securities well outside of their intrinsic value over the medium term. This market characteristic provides the opportunity for Paragon, an active manager with a flexible mandate, to generate superior investment returns over the longer term. Paragon believes that it is critical to understand both the companies and the industries in which they operate, in order to fully comprehend each investment opportunity. Accordingly, a fundamental approach to company research is taken. Assessing the potential downside is also paramount in framing the risk/reward trade-off for potential investments.
Manager Comments	The Paragon Fund returned +4.30% after fees for the month of July 2015. Since inception the Fund has a cumulative return of +55.96% after fees vs. the ASX200 Accumulation Index +23.48%. The Fund has a notable Sharpe and Sortino ratios of 1.45 (Index 0.60) and 3.20 (Index 0.87) respectively. Key positive contributors for July included Yowie Group, Henderson Group, Orora, Mayne Pharma and Senetas. The portfolio had the most net exposure in Industrials at 52.7%, followed by Financials at 21.90%. At the end of the month the Fund had 30 long positions and 15 short positions. Click below to read the latest Fund Manager's commentary.
More Information	Fund Profile Manager's Report

Bennelong Long Short Equity Fund

12 Aug 2015 - Australian Fund Monitors

The Bennelong Long Short Equity Fund's July performance was a strong +8.85% in rebounded share market (ASX200 Accumulation Index 4.40%).

12 Aug 2015 - Bennelong Long Short Equity Fund

By: Australian Fund Monitors

Report Date	06 August 2015
Manager	Bennelong Long Short Equity Management, a Bennelong Funds Management boutique
Fund Name	Bennelong Long Short Equity Fund
Strategy	Equity Market Neutral
Latest Return Date	July 2015
Latest Return	8.85%
Latest 6 Months	16.07%
Latest 12 Months	14.73%
Latest 24 Months	17.86%
Annualised Since Inception	17.97%
Inception Date	01 January 2003
FUM (millions)	AU$240
Fund Overview	Bennelong Long Short Equity Management applies a qualitative stock selection process to construct a diversified portfolio of paired securities based on relative value. The Bennelong Long Short Equity Management strategy invests primarily in the S&P/ASX 100 and is dollar neutral at cost. 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.
Manager Comments	The Bennelong Long Short Equity Fund's July performance was a strong +8.85% in a rebounded share market (ASX200 Accumulation Index 4.40%). Long term performance since inception in January 2003, remains sound with annual returns of 17.97% p.a. (Index 8.33% p.a.) and a volatility of 11.93% (Index 12.88%). Performance were spread across a broad range of pairs with 19 out of 30 pairs making a positive contribution. Within those 19 pairs, returns were quite evenly spread. Healthcare was the strongest sector with two of the shorts, Primary Healthcare and Sonic Healthcare, both guiding profits lower. Click below to read the Fund Manager's complete commentary and future market outlook.
More Information	Fund Profile Manager's Report AFM Research Reports

Fund Review: Supervised High Yield Fund June 2015

11 Aug 2015 - Australian Fund Monitors

Fund review on Supervised High Yield Fund, a fixed income fund, is now available.

11 Aug 2015 - Fund Review: Supervised High Yield Fund June 2015

By: Australian Fund Monitors

SUPERVISED HIGH YIELD FUND

Attached is AFM's updated Fund Review on the Supervised High Yield Fund.

We would like to highlight the following aspects of the Fund:

The Supervised High Yield Fund (SHYF) has a 6 year track record investing in fixed interest investments. The Investment strategy aims to deliver returns with zero correlation to equity markets by investing in debt securities with minimal default probability and offering a premium return above the risk free rate.
The Fund is managed by Philip Carden whose experience in debt and capital markets spans 33 years, including time with JB Were's Capel Court Securities and Macquarie Bank, where he was the Executive Director responsible for the Debt Markets Division.
SHYF is an Alternative Income fund which invests in Global and Australian debt markets, with all foreign currency receivables hedged back to Australian dollars.
The Fund utilises a top down analysis of the economic environment and market to screen and identify debt market opportunities which it believes offer low risk with high yield. The next stage is the development of a risk matrix and investment strategy, following which detailed research is undertaken on specific investment opportunities which meet the pre-defined criteria established in the investment strategy.
Prior to approving an investment for the Fund each potential investment is subject to two stress tests. The first of these is for credit and default risk, in which the investment is stress-tested to ensure that in a worst case economic environment it can repay 100% of its principal and interest obligations case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided The second test examines market risk. In this case Carden looks at the worst case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided.

Australian Fund Monitors

ATTACHED FILES

Supervised High Yield AFM Performance Report June 2015 (pdf format)

Monash Absolute Investment Fund

10 Aug 2015 - Australian Fund Monitors

Monash Absolute Investment Fund rose 6.6% in July, comfortably beating the ASX200 Accumulation Index by 2.2%, with a lower beta (0.61).

10 Aug 2015 - Monash Absolute Investment Fund

By: Australian Fund Monitors

Report Date	05 August 2015
Manager	Monash Investors Pty Limited
Fund Name	Monash Absolute Investment Fund
Strategy	Equity Long/Short
Latest Return Date	July 2015
Latest Return	6.60%
Latest 6 Months	7.54%
Latest 12 Months	5.39%
Latest 24 Months	26.55%
Annualised Since Inception	16.08%
Inception Date	30 May 2012
FUM (millions)	AU$28
Fund Overview	The Monash Absolute Investment Fund is a long/short equity fund, with a home bias to investing in Australia. It invests in shares as a source of specific opportunity, not to go up and down with the market. The fund seeks to identify opportunities in the share market to make positive returns (long and short) irrespective of market conditions. It is style agnostic, as compelling investment opportunities exist across all investment styles from time to time. The Fund places a high priority on capital preservation, and has an absolute return focus in accepting market risk. The Manager's experience across value, growth and discounted cash flow styles allows them to use a comprehensive approach to investment decisions that applies all three. They also have the patience to seek out only compelling opportunities, rather than settling for relative value. The portfolio is somewhat concentrated, looking to diversify across industries and themes, rather than by trying to stay near an index. The portfolio may at times have a large amount of cash or other protection. However once investments are made turnover may be relatively high in order to lock in gains and avoid losses.
Manager Comments	Monash Absolute Investment Fund rose 6.6% in July, comfortably beating the ASX200 Accumulation Index by 2.2%, with a lower beta (0.61). The Fund's performance since inception was 16.08% p.a. with annual volatility of 8.36%, bringing the Sharpe ratio and Sortino ratio to 1.52 and 3.53 respectively. The portfolio had 83% net exposure and 95% gross exposure. The month's result was mainly driven by the reassessing of some of their smaller company exposures following positive news, but contributions to the return came from across the whole portfolio. Some of the strong positive contributors were 1-Page, Catapult, Impedimed and Yowie. Click below to read the July Performance Report.
More Information	Fund Profile Manager's Report AFM Research Reports

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19 Aug 2015 - Optimal Australia Absolute Trust

18 Aug 2015 - Bennelong Kardinia Absolute Return Fund

17 Aug 2015 - Fund Review: Monash Absolute Investment Fund July 2015

MONASH ABSOLUTE INVESTMENT FUND

17 Aug 2015 - Allard Investment Fund

15 Aug 2015 - Hedge Clippings

14 Aug 2015 - Morphic Global Opportunities Fund

13 Aug 2015 - The Paragon Fund

12 Aug 2015 - Bennelong Long Short Equity Fund

11 Aug 2015 - Fund Review: Supervised High Yield Fund June 2015

10 Aug 2015 - Monash Absolute Investment Fund

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