NEWS
11 Sep 2014 - Optimal Australia Absolute Trust
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| 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 recorded a Sharpe ratio of 2.14 (Index 1.40) and Sortino ratio of 4.80 (Index 2.79) and had 92% positive months over the last 12 months. Up and Down Capture ratios are 0.26 and -0.12. The Fund increased its net short exposure to equities through the month, driven less by fear of an imminent market correction than a sense that the relative-value argument for equities is getting very long in the tooth; while at current prices, we continue to find more stocks we want to short than own. The key challenge remains the cost of hedge protection. Our stock shorts were a net detraction from our performance, as these included a fair representation from the defensive/yield category. One effect of financial repression and the corresponding over-reach for yield and coupon income been to shift many of these stocks even further away from defensible wider valuation metrics. Our short index futures position was similarly ineffective this month, as the discount to the cash market narrowed sharply due to the ex-dividend effect. |
| More Information | » View detailed profile of this fund |
10 Sep 2014 - Bennelong Kardinia Absolute Return Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| 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 domestic reporting season saw earnings generally in line with expectations. Dividend growth exceeded earnings growth as companies increased payout ratios. Net equity market exposure (including derivatives) averaged around 55% during the month, but was reduced to 36% at month end (65.2% long and 29.1% short) in anticipation of some seasonal weakness in September. |
| More Information | » View detailed profile of this fund |
9 Sep 2014 - Microequities Deep Value Microcap Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The objective of the Fund is to identify undervalued Microcap companies, invest in them and, through a medium to long term commitment, attempt to deliver superior investment returns. The Fund invests primarily in ASX listed Microcap companies, which at the time of initial investment are generally below a market capitalisation of A$250 million. The Fund may also invest in companies with a higher market capitalisation, but these will be limited to no more than 20% of the assets of the Fund. At times the Fund may invest in pre-IPO securities that are due to be listed on the ASX within 3-6 months, and have lodged a prospectus with ASIC. These investments will also be limited to no more than 10% of the assets of the Fund. The Fund will be limited to investing no more than 20% of the Fund's assets in any one security or company. The Fund will make investments with a medium to long term time horizon of between 3-5+ years. The Fund will not speculate in derivatives. It will be permitted to hold other securities that are directly associated with a particular investment such as options granted with a specific company issue etc. The Fund will not engage in short selling or stock lending. The Fund will not hold financial debt of any kind. |
| Manager Comments | The has recorded very high Sharpe and Sortino ratios of 2.93 (Index 1.40) and 13.88 (Index 2.79) respectively. The Up and Down Capture ratios are 0.83 and -1.20 with the Fund recording up months in all 3 months the market was negative over the preceding 12 months to August. Whilst the peak of the capex cycle in the resource sector is a structural change in the economy, the slowdown in retail activity is but a temporary one. Household consumption is in fact facing the preconditions for almost booming conditions; household debt has been growing at a very slow 2% rate per annum since the GFC. However thanks to a booming property market and a stronger equity market driving growth in household assets, Australian households' net debt position has been solidified. |
| More Information | » View detailed profile of this fund |
8 Sep 2014 - Monash Absolute Investment Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | 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 | The Sharpe and Sortino ratio since inception is 2.00 and 7.37 over the last 12 months. Fund exposures were net 88% and gross 99% at month-end. The Fund returned 2.3% after fees. August is a reporting month for the Australian market, so it is always interesting. We had a good reporting season and suffered no negative surprises. The portfolio also benefited from exposure to a placement and two IPOs. |
| More Information | » View detailed profile of this fund |
8 Sep 2014 - ARRIA Round Table - Brisbane
AARIA ROUND TABLE 2014
Tuesday 9 September 2014 in Brisbane
We operate in the area of "real returns" and are eager to help our network of IFA's that operate outside the traditional static buy and hold methodology. This has led me to meeting the Association of Real Return Investment Advisers (ARRIA).
The Group has been established as a not-for-profit entity run by advisers for advisers. ARRIA is an initiative based on feedback and insights from advisers regarding the challenges that they face in using Real Return investment strategies, which they believe are able to deliver tangible solutions to meet their client's objectives.
ARRIA is hosting a round table discussion on Tuesday 9 September, from 12pm to 4.30pm, in Brisbane and offers a valuable opportunity to meet with likeminded advisers. The agenda for the round table is as follows:
Round Table 1: Agenda
- What are the implications of developing Real Return outcomes for PI and the regulators?
- Panel discussion - which alternative "strategies" work when?
- Panel discussion - what are the new investment opportunities, "access" methods (e.g. LICs), strategies, asset classes and investment flavours?
- Tool time
- Open Forum
Click here to register for the Round Table event, or if you would like more information please contact:
Philip Reid | General Manager
Association of Real Return Investment Advisers Limited (ARRIA)
ABN 82 99 168 267 623
GPO Box 5025, Sydney NSW 2001
T 0411-828 097 E info@arria.com.au
The next Round Table event to be held in Brisbane will be on Tuesday 9 December 2014.
As an association ARRIA aims to:
- assist in setting and maintaining a higher level of professional standards for all Real Return Investment Advisers and all relevant Stakeholders in the real return investment industry.
- create an environment where all Real Return Investment Advisers and all relevant Stakeholders can network in appropriate forums to advance the exchange of information, best-practice and compliance issues;
- create an environment where all Real Return Investment Advisers and all relevant Stakeholders can leverage industry resources;
- assist with the gathering and dissemination of resources in order to help facilitate:
- the collation and provision of information of interest or relevance;
- the development and / or access of appropriate tools;
- access to and sourcing of relevant and appropriate expertise;
- liaise and co-ordinate communications with government, regulatory bodies, other relevant industry associations and general service providers in the real return investment industry;
- whether undertaken with or without other participants; to promote, organise, conduct and/or participate in meetings, lectures, seminars, study groups, conferences, education, training and counselling courses for the purposes of increasing and advancing the knowledge and understanding of all facets and issues affecting or related to Real Return Investment Advisers and all relevant Stakeholders in the real return investment industry;
The operations of ARRIA are overseen by a Board, under the direction of the associations' corporate constitution and guidance of the directors. Both Directors and the Board are elected by the members on a rotation policy.
ARRIA Round Table (pdf format)
5 Sep 2014 - Hedge Clippings
Hedge Clippings has endured a challenging (or should that be frustrating) week. As usual the first frustration came out of the ongoing two-step being danced in Canberra, where the government proudly announced it had delivered on at least one election promise, that of repealing the mining tax.
Of course it can only do anything at present with the approval of Clive Palmer and his PUP colleagues in the Senate, and in this case it seemed as if the trade off was the deferral for 7 years of any increase in the Superannuation Guarantee Levy or SGL. At the present time the SGL is 9.5% of every employees' wages or salary, and is levied as a tax on the employer, not the employee.
While there are plenty of arguments as to the rights and wrongs of the SGL and how it is levied, who should pay, and the cost of superannuation tax benefits to the federal budget, it is hard to argue about the logic of a system designed to cover the retirement benefits of all workers, given that one of the major expenditure items in the Federal budget is the cost of the aged pension.
It is also widely accepted by most (although possibly not the Federal Treasurer) that even after 40 years of the SGL at 9.5%, the retirement benefit for most employees will be insufficient to cover their income needs in retirement, particularly given ever extending life expectancies. Figures published in an article on news.com.au today indicate the average 50 year old male currently earning $79,700 can expect to receive an income of $27,600 when he turns 70 in 20 years' time.
Hardly enough one would have thought, and therefore any encouragement (whether it be using carrot or stick) should be applauded rather than the current government's policy of deferring or reducing even this meagre ration.
Maybe one of the reasons that Treasurer Hockey doesn't seem to think this is important is that the same article indicates that when he leaves Federal Parliament he will be in line for a pension of at least $270,000 a year.
Who says the age of entitlement is over? None other than the Treasurer of course!
The other challenge or frustration this week was altogether different, and altogether more enjoyable, having attended yet another Bob Dylan concert (my fifth or sixth from memory, but the ones I was at in the late 60's are for some strange reason rather vague). Bob is one of my favourite artists, sadly not one of the world's greatest communicators. Having said that, this was one of his best performances I had seen, with his rendition of his classic "Blowin' in the Wind" for his final number perfect for current times, just as it was way back in 1963.
Specific results received this week include the following PERFORMANCE UPDATES:
The Auscap Long Short Australian Equities Fund returned 2.95% during July and 43.54% for the prior twelve months with a volatility of 6.30%.
Returning 24.47% for the year ended July 2014, the Avenir Value Fund returned -1.12% during July.
Pengana Absolute Return Asia Pacific Australian Fund returned 1.18% during July and 8.03% for last 12 months with a volatility of 2.88%.
With a volatility of 8.95% the Nanuk Global Alpha Fund returned -1.26% in July and 17.01% for the prior 12 months.
The Supervised High Yield Fund returned 0.77% during July and 7.17% over the previous 12 months with a very low volatility of 0.72.
AFM are now accredited by the Financial Planning Association of Australia to issue CPD points for FUND REVIEWS.
This week's updated reviews include:
Aurora Fortitude Absolute Return Fund
Read the most recent Fund Review for any of our research clients, and then answer 5 straightforward questions, these are presented in multiple choice format. An 80% or more success score will provide 0.5 CPD points, with a certificate provided as proof of completion. There is no charge for this service.
Tuesday 9 September in Brisbane , from 12pm to 4.30pm - ARRIA is hosting a further round table discussion, providing a valuable opportunity to meet with like-minded advisers. Free to Financial Advisors.
Tuesday 16 September in Sydney AIMA Australia's Hedge Fund Forum - and event by the Industry for the industry featuring quality Australian and international speakers.
15-17 October Grace Hotel, Sydney - Investment Performance Measurement, Attribution & Risk Management Forum will have leading experts sharing up-to-date, cutting edge ideas and insight on frontiers of recent developments in performance measurement.
21-22 October in Sydney Post-Retirement Australia 2014 conference. Comprehensive two day forum for high profile cross industry participants to provide updates, insights and ongoing discussion into the key issues central to achieving optimal financial outcomes.
Friday 24 October in Sydney Financial and Media Markets Charity Regatta Day out of Middle Harbour Yacht Club. Promises to be a fantastic day.
5-6 November, Grace Hotel, Sydney. Alternative Investments Conference - Investigating the rise of non-traditional high yield and low risk investment products, strategies and allocation in an era of prolonged volatility and low returns.
This week's Now For Something Completely Different and in keeping with our musical theme... I imagine it would be surprising to be shopping for groceries and find yourself in what might appear to be a scene from an opera, or Shopera as some might say. Well, I thought it was from an opera, but it's not. If anyone else is interested, the history of the song is here.
Best wishes for a happy and healthy weekend,
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 on Monday at 2:15 pm 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.
5 Sep 2014 - Supervised High Yield Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The fund will invest in all forms of marketable floating and fixed income debt securities, such as asset backed debt securities, residential mortgage backed securities, corporate debt, regional and sovereign debt securities, debt/equity hybrid securities, equities and currencies. All these investments will be either listed or traded in a market where prices can be independently verified. The fund may also invest in interest rate swaps, options over authorised investments and exchange traded futures contracts. All these will be either listed or traded in a market where they can be independently valued. |
| Manager Comments | The Fund's Annual Report is on the AFM website under the Profile. |
| More Information | » View detailed profile of this fund |
4 Sep 2014 - Nanuk Global Alpha Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | In 2013 Nanuk started to expand the focus of the fund away from just energy and include other industries related to the overarching theme of environmental sustainability, specifically water, waste, recycling, pollution control and agriculture. Nanuk is now investing across a universe in excess of 600 stocks and an aggregate market capitalisation over US$2 trillion. This was a logical move because, while the industries themselves are different, their characteristics and long term drivers are very similar. Nanuk has identified a large, diverse global universe of companies positively exposed to these shifts. Nanuk combines deep fundamental research into these companies with detailed analysis of technological development, policy direction and related economics within each of the relevant sectors to identify profitable trends and opportunities suitable for inclusion in the Fund. Nanuk's principal strategy is to invest, long and short, in securities that are mis-priced on an absolute or relative basis. The Fund aims to achieve long term capital appreciation while reducing volatility of returns and risk of capital loss through appropriate hedging and risk management strategies. |
| Manager Comments | At month-end the Fund was 54% long, 52% short for a gross exposure of 104% and net exposure of 2%. The Fund finished the month down 1.3%. Positive contributions from short positions in a number of expensive European and US stocks and long positions in fuel cell and solar inverter manufacturers were offset by losses on some of the Fund's LED solid state lighting and solar positions which continue to show high levels of volatility. Thus far 2014 has been a challenging year for the Fund, with a number of our key ideas failing to deliver positive returns despite our continued conviction in the underlying investment theses and evidence supporting them. |
| More Information | » View detailed profile of this fund |
3 Sep 2014 - Charity Regatta
2014 Financial and Media Markets Charity Regatta
Sydney - Friday 24 October 2014
The Hedge Fund Association, is pleased to be a supporting the ASX Thomson Reuters Charity Foundation 2014 Financial and Media Markets Charity Regatta, out of Middle Harbour Yacht Club, New South Wales. It will be a fantastic day, with lots of fun to be had by all. Full details of the Regatta can be found here.
The Foundation organises an annual charity sailing regatta. Up to 60 class one, two and three yachts are expected to take part. There is also a 150 person VIP spectator boat to follow the race with guests enjoying a superb lunch. A prize giving reception, BBQ and beach party is held at Middle Harbour Yacht Club after the race.
We would like to encourage yacht owners to donate the use of their yacht, with skipper and one or two experienced crew for the day. The Charity Foundation will source a ?sponsor and guest crew? for each yacht which will contribute towards the fundraising. Sponsors in cash and in kind are also needed for the BBQ, Sailing Shirts, Caps, BBQ, Beach Band, Drinks and Signage.
Program of the Day - 10am registration for 1pm race start
Enquiries regarding the Regatta can be directed to David Brocklehurst.
To enquire further about HFA membership please contact Adriana Kostov, Australian Regional Director, HFA
2014 Charity Regatta (pdf format)
3 Sep 2014 - Fund Review: Aurora Fortitude Absolute Return Fund July 2014
- The Aurora Fortitude Absolute Return Fund (AFARF) has a 8 year track record investing in ASX listed equities. A Market Neutral overlay is used across a multi strategy approach which allows for flexible asset allocation to maximise returns and minimise risk under a variety of market conditions and cycles.CIO John Corr has over 20 years financial market experience with a strong focus on risk.
- Significant use of low risk "long" derivatives and option overlays has provided positive returns with low volatility during periods of market dislocation. Risk statistics are impressive and shows the Funds risk philosophy; over 88% of monthly performances have been positive with no losing months in 2008, the Fund's largest drawdown is -2.09% and the Sharpe ratio 1.16.
- ASX listed Aurora Funds Limited was established on the merger of three existing fund management businesses, managing approx. $230m on behalf of more than 2,500 retail and wholesale investors.
Sean Webster
Research and Database Manager
Australian Fund Monitors
AFARF Fund Review July 2014 (pdf format)
