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| Fund Overview | The Fund consists of a concentrated long/short portfolio typically comprising 30 to 40 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. There is a slight bias to large cap stocks in 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 10 to 15% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. |
| Manager Comments | Global equity markets rallied strongly in July with the MSCI World Index up 5.2%. In the US, the Q2 reporting season began well and economic data continued to improve. Despite deteriorating domestic economic news and signs of slowing Chinese growth, the S&P/ASX 300 Accumulation Index rose 5.3%. The Bennelong Kardinia Absolute Return Fund rose 1.3% in July with limited Resources and small cap exposure contributing to a relatively disappointing month. CSL, EBOS, QBE Insurance and BHP Billiton performed strongly, whilst McMillan Shakespeare, Share Price Index futures contracts (hedging long positions) and Treasury Wine Estates were significant detractors from performance. Net equity market exposure (including derivatives) was progressively increased through the month to 50.8% (58.5% long and 7.7% short). |
| More Information | » View detailed profile of this fund |
