Bennelong Long Short Equity Fund

15 Jul 2015 - Australian Fund Monitors

The Bennelong Long Short Equity Fund performed strongly in June with a return of +4.86%, it's best
monthly result since May 2013.

15 Jul 2015 - Bennelong Long Short Equity Fund

By: Australian Fund Monitors

Report Date	08 July 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	June 2015
Latest Return	4.86%
Latest 6 Months	9.47%
Latest 12 Months	8.60%
Latest 24 Months	12.09%
Annualised Since Inception	17.35%
Inception Date	01 January 2003
FUM (millions)	AU$279.5
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 performed strongly in June with a return of +4.86%, it's best monthly result since May 2013. In comparison the ASX200 Total ReturnIndex decreased by -5.30%. Long term performance since inception in January 2003, remains sound with annual returns of 17.35% p.a. (Index 8.04% p.a.) and a volatility of 11.79% (Index 12.82%). Performance was broad-based with 20 pairs generating a profit versus 10 negative pairs. Short positions were key to performance during the month with each of the top three pairs driven by the short side. Two specific names thatworked well on the short side were Nine Entertainment Co (-27.9%) and Flight Centre (-26.7%) as both companies issued material profit warnings during the month. 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: Monash Absolute Investment Fund June 2015

14 Jul 2015 - Australian Fund Monitors

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

The Paragon Fund

14 Jul 2015 - Australian Fund Monitors

The Paragon Fund returned -3.80% versus the ASX 200 Total Return Index's -5.30%, for the month of June 2015. The Fund's annual return since inception has been 18.82% p.a. versus the Index's 7.46% p.a.

14 Jul 2015 - The Paragon Fund

By: Australian Fund Monitors

Report Date	08 July 2015
Manager	Paragon Funds Management
Fund Name	The Paragon Fund
Strategy	Equity Long/Short
Latest Return Date	June 2015
Latest Return	-3.80%
Latest 6 Months	8.74%
Latest 12 Months	13.88%
Latest 24 Months	48.06%
Annualised Since Inception	18.82%
Inception Date	28 February 2013
FUM (millions)	AU$29.4
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 -3.80% versus the ASX 200 Total Return Index's -5.30%, for the month of June 2015. The Fund's annual return since inception has been 18.82% p.a. versus the Index's 7.46% p.a. This annual return has been achieved with slightly higher volatility (11.21%) compared to the Benchmark's 10.98%. The Fund has a notable Sharpe and Sortino ratios of 1.59 and 3.85 respectively. Key positive contributors for June included Yowie, Adairs, Senetas, St. Barbara and short positions in Wesfarmers and Origin. These were offset by the Fund's net positive equity exposure, and holdings in Orocobre, IOOF, and Fortescue (FMG sold for a small overall gain). At the end of the month the Fund had 28 long positions and 15 short positions. Click below to read the latest Fund Manager's commentary.
More Information	Fund Profile Manager's Report

Allard Investment Fund

13 Jul 2015 - Australian Fund Monitors

The Allard Investment Fund's (AIF), net of all fees, decreased 3.1% during the month of June 2015 (Index -5.30%).

13 Jul 2015 - Allard Investment Fund

By: Australian Fund Monitors

Report Date	08 July 2015
Manager	Allard Partners Australia Pty Limited
Fund Name	Allard Investment Fund
Strategy	Equity Long
Latest Return Date	June 2015
Latest Return	-3.10%
Latest 6 Months	5.53%
Latest 12 Months	21.95%
Latest 24 Months	27.09%
Annualised Since Inception	9.63%
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, decreased 3.0% during the month of June 2015. to bring the Fund's last twelve month performance to 21.95% with a volatility of 6.08. In comparison, the ASX200 Accumulation returned 5.68% with a volatility of 12.0%. The Fund portfolio was invested 76.5% in equities and 23.5% in cash and fixed income. The Fund continues to be most exposed to Financial Services at 18.30%, Conglomerates at 11.30% and Telco's at 10.60%. The geographic breakdown was Hong Kong / China at 42.50%, Singapore 11.20% and Korea 9.60%. The top 5 holdings had 39.9% concentration of the portfolio and 17.0% in the next 5 holdings. Click below to review the latest Fund Manager's Report.
More Information	Fund Profile Manager's Report

Hedge Clippings

11 Jul 2015 - Australian Fund Monitors

Chinese authorities treading a dangerous path

11 Jul 2015 - Hedge Clippings

By: Australian Fund Monitors

Chinese authorities treading a dangerous path

The news that the China Securities Regulatory Commission was prohibiting investors who own more than 5% of a publicly traded company from selling shares for six months is likely to do more to damage their market than save it. The ban will include foreign investors who hold shares that trade on the Shanghai and Shenzhen exchanges, and comes after Chinese equities lost more than 25% of their value since mid-June.

If anyone can pull off what the Chinese authorities are trying to do, they can, but we doubt they'll succeed. They might be able to control their own citizens from selling shares in smaller caps, or freezing parcels of 5% or more of a publicly listed companies for six months, but the longer term damage to their reputation, and the confidence of traders, investors, and market participants at home and abroad, will be difficult to overcome.

What the Chinese authorities are doing is freezing liquidity, and in this regard it seems they haven't learned from the lessons of 2008 when central banks, governments, and regulators around the world tried to ban short selling, close markets, and in a word, panic. And if governments and the authorities panic, that's exactly what investors are likely to do as well.

Rudyard Kipling put it quite clearly: "If you can keep your head when all around you are losing theirs and blaming it on you" but it seems the Chinese authorities didn't listen, or haven't read Kipling.

By stopping investors selling smaller stocks, they're going to be forced to sell larger ones, and possibly the better ones, to cover their liquidity requirements, margin calls, their need for cash, or just to stuff under the mattress. While western authorities have probably learned from their mistakes of 2008 and might not make the same ones again in a panic, they also succeeded in restricting longer term liquidity through regulations on banks and other market participants in an effort to avoid another too big to fail scenario.

China threatens to make the Greek tragedy just a pimple by comparison. Whatever eventuates in Greece has largely been anticipated by most savvy investors over the past few years, and if a three year moratorium is agreed to it will probably only extend the agony further. There seems no way that the Greek economy, about the same size as that of the State of New South Wales, is ever going to be able to repay the levels of debt.

And so on to fund performance in June.

It was obviously a rocky ride on global markets in June, initially in response to Greece, but more recently as a result of China's problems. The ASX 200 Accumulation Index fell by 5.3%, and July has seen a continuation of the volatility since. Over the 12 months to the end of June the ASX200 rose only 1.17%, or 5.68% on an accumulation basis. By comparison and based on the 25% of fund returns received to date, equity-based hedge funds fell by only 1.41% in June, an outperformance of almost 4%, with 87% of those outperforming the ASX 200 Accumulation Index. Over the past 12 months equity-based funds have returned 11.57%, double the return of the accumulation index.

In addition to the performance updates below, results of note include Kentgrove Capital, (+4.1%) Totus Alpha Fund, (+6.3% (e)) QATO (+1.89%) Bennelong Long Short (+4.86%).

Specific results received this week include the following PERFORMANCE UPDATES:

The Optimal Australia Absolute Trust reported a net return of -1.10% in June, in a very weak equity market, with the ASX200 Total Return Index down by 5.30%. For the June quarter, the Trust returned a net +2.9%, against a 6.5% fall in the market

Monash Absolute Investment Fund fell 1.9% in June in a weak Australian equity market, but still taking the Fund's annualised return since inception to 14.11% p.a.

FUND REVIEWS released this week: Totus Alpha Fund; Insync Global Titans Fund; 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 codepromoFMon registration.

15 September 2015 -The AIMA Australia Hedge Fund Forum 2015 is the annual non-profit hedge fund conference organised by the industry for the industry.

And finally best wishes for a happy and healthy week-end ahead,

Chris
CEO, AUSTRALIAN FUND MONITORS

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Optimal Australia Absolute Trust

10 Jul 2015 - Australian Fund Monitors

Optimal Australia Absolute Trust reported a net return of -1.1% in June, in a very weak market, with the ASX200 Accumulation Index down 5.30%.

10 Jul 2015 - Optimal Australia Absolute Trust

By: Australian Fund Monitors

Report Date	06 July 2015
Manager	Optimal Fund Management Australia
Fund Name	Optimal Australia Absolute Trust
Strategy	Equity Long/Short
Latest Return Date	June 2015
Latest Return	-1.10%
Latest 6 Months	1.87%
Latest 12 Months	0.79%
Latest 24 Months	6.50%
Annualised Since Inception	8.82%
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 -1.1% in June, in a very weak market, with the ASX200 Accumulation Index down 5.30%. The Fund's annualised return since inception was 8.82% p.a. (Index 5.51% p.a.), which has been achieved with a notably low volatility of 3.67% p.a. (Index 14.34% p.a). The Fund has been running unusually low net market exposure in recent months, and added risk into initial market weakness in June. The Fund's short positions did well, with attribution of +3.3% (on average short exposure of 25% of NAV). However the long positions negatively contributed -4.5% (on average long exposure of 67%. A bias towards low valuations and strong balance sheet quality within the long stocks made little difference in such a weak market. 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

Fund Review: Supervised High Yield Fund May 2015

9 Jul 2015 - Australian Fund Monitors

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

9 Jul 2015 - Fund Review: Supervised High Yield Fund May 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 May 2015 (pdf format)

Monash Absolute Investment Fund

8 Jul 2015 - Australian Fund Monitors

Monash Absolute Investment Fund fell 1.9% in June, and the Australian equity market was very weak; the top 100 was down over 5% and the small cap index down over 8%.

8 Jul 2015 - Monash Absolute Investment Fund

By: Australian Fund Monitors

Report Date	06 July 2015
Manager	Monash Investors Pty Limited
Fund Name	Monash Absolute Investment Fund
Strategy	Equity Long/Short
Latest Return Date	June 2015
Latest Return	-1.90%
Latest 6 Months	2.40%
Latest 12 Months	1.89%
Latest 24 Months	25.33%
Annualised Since Inception	14.11%
Inception Date	30 May 2012
FUM (millions)	AU$27
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 fell 1.9% in June, and the Australian equity market was very weak; the top 100 was down over 5% and the small cap index down over 8%. Over the last quarter the market has been poor, falling more than 7% across the board, while the Fund has lost only 2.36%. The Fund's performance since inception was 14.11% p.a. with annual volatility of 7.79%, bringing the Sharpe ratio and Sortino ratio to 1.54 and 3.12 respectively. The Fund continues to have a low Beta and therefore less volatile than the market. The portfolio had 71% net exposure and 82% gross exposure. Click the link below to the rest of the Fund Manager's Report.
More Information	Fund Profile Manager's Report AFM Research Reports

Fund Review: Insync Global Titans Fund May 2015

7 Jul 2015 - Australian Fund Monitors

Latest Fund Review on Insync Global Titans Fund is now available.

Fund Review: Totus Alpha Fund May 2015

6 Jul 2015 - Australian Fund Monitors

May Fund Review with key statistics for Totus Alpha Fund now available.

6 Jul 2015 - Fund Review: Totus Alpha Fund May 2015

By: Australian Fund Monitors

TOTUS ALPHA FUND

Attached is our most recently updated Fund Review on the Totus Alpha Fund.

CPD Points are now available for all AFM Fund Reviews. Read the review and answer 5 questions to earn half a point toward your continuing professional development.

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 14 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 23.31% since inception in March 2012 as compared to 14.43% for the ASX 200 Accumulation Index. The standard deviation has been higher than the Index at 13.39% as compared to 11.05% and the Sharpe ratio is 1.44.

Sean Webster

Research and Database Manager
Australian Fund Monitors

ATTACHED FILES

Totus Alpha Fund AFM Fund Review May 2015 (pdf format)

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15 Jul 2015 - Bennelong Long Short Equity Fund

14 Jul 2015 - Fund Review: Monash Absolute Investment Fund June 2015

MONASH ABSOLUTE INVESTMENT FUND

14 Jul 2015 - The Paragon Fund

13 Jul 2015 - Allard Investment Fund

11 Jul 2015 - Hedge Clippings

10 Jul 2015 - Optimal Australia Absolute Trust

9 Jul 2015 - Fund Review: Supervised High Yield Fund May 2015

8 Jul 2015 - Monash Absolute Investment Fund

7 Jul 2015 - Fund Review: Insync Global Titans Fund May 2015

6 Jul 2015 - Fund Review: Totus Alpha Fund May 2015

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