NEWS
19 Jun 2015 - Cor Capital Fund
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| Fund Overview | The Cor Capital Fund is a Multi- Asset Fund which combines a pre-determined strategic asset allocation with active but systemised rebalancing to generate returns and manage volatility whilst maintaining transparency and liquidity. The Fund strategy is not reliant on accurate market predictions, forecasts or timing for success. Returns are generated in a number of ways; 1) by maintaining sufficiently large positions in a diverse group of asset classes, 2) via the 'volatility harvesting' consequences of active rebalancing, and 3) from the offsetting behaviour of certain asset classes under specific conditions. The combined portfolio is expected to exhibit relatively low volatility and low turnover. In the interests of avoiding complexity, maintaining liquidity, and minimising reliance on third parties, the Fund strategy does not employ gearing, derivatives or short-selling. |
| Manager Comments | The equities (+2.0%) and gold (+3.0%) components of the portfolio were the major performance contributors for May. The ASX200 Accum Index was up only 0.40% with the difference resulting from the Fund's less concentrated equity portfolio. |
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18 Jun 2015 - 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 | The Fund had a gross exposure of 99.0% and net exposure of 7.2%. The stock selection during the month was solid, with positive attribution on both the Fund's long (+2.0%) and short (+0.3%) positions. The short position in the banks did its work, and a number of the longs in materials also did well, including ALS, Alumina, Sims Group, and PanAust. Click below to read the latest Fund Manager's commentary on the Fund and market outlook. |
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18 Jun 2015 - The Paragon Fund
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| Fund Overview | 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 | Key drivers of the Paragon Fund's performance for May included solid returns from Macquarie, Henderson Group, Orocobre, Nanosonics and Reward Minerals. Short positions in REA Group and 1-Page also contributed. At the end of the month the fund had 33 long positions and 14 short positions Click below to read the latest Fund Manager's commentary. |
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17 Jun 2015 - Fund Review: Bennelong Long Short Equity Fund May 2015
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large cap stocks from the ASX/S&P100 Index, with over twelve year track record and annualised returns of 17.05%.
- The consistent returns across the investment history indicates the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 1.03 (Index 0.36) and 1.71 (Index 0.40) respectively.
outperformance of 0.88%.
17 Jun 2015 - Morphic Global Opportunities Fund
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| Manager Comments | The biggest contribution to performance was from the exposure to the US health service sector, represented by HCA Holdings and Anthem. The second biggest winner came from the US bank exposure as banks there rallied on the back of a steeper yield curve, improving their margins. The main detractors from the month's performance was mainly due to the pullback in the Chinese market and stocks relating to that position. The Fund has over 50.2% of their equity exposure in North American and 33.0% in the Financial Sector. The Fund closed May fully invested, with the continuing overweight to China, along with lesser overweights to India and Japan, funded from underweight positions in the US and Europe and the rest of the emerging markets. Click below to read the Fund Manager's monthly report and their June outlook of the market. |
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0.41% in May, to bring the Fund's annual performance since inception to 13.01% compared to the ASX200 Accumulation benchmark's 5.60%.
16 Jun 2015 - 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 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 Fund's net equity market exposure, including derivatives increased to 41.2% (74.3% long and 33.1% short). Long positions in James Hardie, Amcorand Sirius were the largest positive contributors. A long position in Resmed and a short position in Share Price Index Futures (hedging long exposures) were the largest detractors. Click below to read the May 2015 Fund Report. |
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16 Jun 2015 - Fund Review: Monash Absolute Investment Fund May 2015
MONASH ABSOLUTE INVESTMENT FUND
- The Fund is a research driven, active equity long/short strategy investing in listed ASX companies.
- 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.
Monash Absolute Investment Fund Review May 2015 (pdf format)
15 Jun 2015 - Allard Investment Fund
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| Manager Comments | The Fund portfolio was invested 75.5% in equities and 24.5% in cash and fixed income. There has been little change since the prior month, in terms of the industry and geographic breakdown of the portfolio. The Fund continues to be most exposed to Financial Services at 17.30%, Conglomerates at 10.80% and Telco's at 10.70%. The geographic breakdown was Hong Kong / China at 43.00%, Singapore 10.80% and Korea 9.70%. The top 5 holdings had 40.10% concentration of the portfolio and 17.20% in the next 5 holdings. Click below to review the latest Fund Manager's Report. |
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12 Jun 2015 - Hedge Clippings
That's not a bubble, This is a bubble! Or is it?
Hedge Clippings spent an interesting and informative morning this week at Money Management's Asset Allocation event. Apart from moderating a series of discussions covering retirement income amongst financial and wealth advisors, we were treated to a keynote presentation from Stephen van Eyk.
Stephen opened his address by stating that in preparing his presentation he had determined that he would try to put a positive view on his outlook for our collective financial outlook, but that having sifted through all the data and looked at the evidence, this would unfortunately not be possible. No matter which way one looked at it, Australia's low economic growth wasn't responding to interest rates of 2%, and weren't likely to, providing a headache for both the government and the RBA.
The event was wrapped up with a panel discussion entitled "What is the New Bubble", consisting of five leading fund managers, namely Alva Devoy from Fidelity, Tim Samway from Hyperion, Dr Phil Hofflin from Lazard, Anton Tagliaferro from IML, and Matthew Drennan from IOOF. Some interesting ideas, comments and statistics emerged with the usual varying degrees of optimism and pessimism, some of which I managed to recall after the event. Of course given the RBA's comments earlier in the week regarding Sydney house prices, and some typically insensitive, albeit obvious comments from the Treasurer, the discusion leaned towards a real estate bubble.
Anton noted that he did not expect a crash, as they only occurred when not expected, although he also noted the concentration risk within equity markets, and that in his opinion QE had resulted in one of the greatest examples of wealth transfer (from tax payers to financial markets) in history. His expectation was that low growth is set to continue.
Alva Devoy noted that we should get used to current conditions as the "new normal" and it was likely to be 10 years before interest rates returned to the old normal, and that as a result monetary policy would continue to support stretched equity valuations.
Phil Hofflin wondered if we were heading down the Japanese path of long term low growth in spite of central bank stimulation, and turning to the housing market warned of the 65/65 ratio: 65% of bank assets in Australia are in housing, which in turn is on a PE multiple of 65 times, and that the total value of Australia's housing market, if it does correct, is many times larger that the equity market.
Finally Matthew Drennan cautioned that traditional safe havens may not turn out to be so safe. All in all while some of the panel were more cautious than others, along with Stephen van Eyk, none were overly optimistic either.
Specific results received this week include the following PERFORMANCE UPDATES:
Monash Absolute Investment Fund returned -0.40% in May, taking annualised performance since inception in May 2012 to 15.35%.
The Bennelong Long Short Equity Fund performance in May was down 1.91% taking annualised performance since inception in January 2003 to 17.05%.
Allard Investment Fund returned 1.0% during May, with annualised performance since July 2003 of 9.99%.
FUND REVIEWS released this week: Insync Global Titans Fund; Monash Absolute Investment Fund
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. Australian Fund Monitors is pleased to offer a discount of $300 to all investors and advisors using coupon code promoFM on 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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12 Jun 2015 - 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. |
| Manager Comments | The short positions were more the driver of the Fund's under-performance than the long positions. A review of the key contributing loss-making shorts, has the Fund Manager confident it was not due to fundamental factors, more the noise associated short-term monthly measurement. The Fund activity for the month of May was modest with weightings revised for few pairs, with a new pair within the Financials sectors - long National Australia Bank / short Bendigo Bank. Click below to read the Fund Manager's complete commentary and future market outlook. |
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