Last week's hope for a clear mandate for the new government in both houses has not come to pass, but it's still too early to tell if incoming PM Tony Abbott will be able to cobble together a working relationship with the rag tag group of independents in the Senate. Anyway, enough of politics. I'm just thankful the electioneering is over for the moment.
This was Hedge Fund Week in Australia, with a range of events and the inevitable post event socialising testing my stamina. AIMA Australia put on an excellent and well attended "by the industry, for the industry" one day seminar in Sydney on Tuesday, which had it not clashed with a commercially sponsored event in Melbourne targeting the same audience would have made it standing room only.
One senior AIMA committee member admitted that they even surprised themselves with the professionalism of the day's proceedings. Certainly the quality of the speakers and panelists, with AIMA Australia's Chairman Paul Chadwick's armchair chat with Sir Michael Hintze from CQS a standout, kept the audience's attention through to the end of the day.
Also on stage was ASIC's deputy commissioner Greg Tanzer who delivered the outcome of ASIC's review of the potential systemic risk of the largest local hedge funds to Australia's financial markets. In what would have been a disappointment to some of the gloom merchants in the media who love to love hating hedge funds, ASIC's findings were that they posed no or little risk. Amongst ASIC's findings were that out of the total funds surveyed, the largest 12, each with greater than $500 million in FUM and representing 42% of the total, held just 0.4% of the ASX All Ords' market capitalisation.
However that's not to suggest that there's no risk, just that they pose no systemic risk to the system in the way that LTCM or Amaranth did in the past.
Last night saw the annual Australian Hedge Fund Awards supporting the Cure Our Kids Foundation. Congratulations to all the finalists, to the evenual winner Chris Black from the Laminar Credit Opportunities Fund, and to John Corr who took out the well deserved "Contribution to the Industry" Award.
EVENTS
An upcoming event that may be of interest for Superannuation member administration and investment operation service providers is the Superannuation Fund Back Office conference coming up on 21-22 October. Visit the International Business Review Conferences website for more details.
The Asset Allocation Conference is also coming up from 30th October to 1 November 2013 at the Grace hotel in Sydney. Details are here.
Specific results received this week include the following PERFORMANCE and NEWS UPDATES:
Bennelong Kardinia Absolute Return Fund returned 0.96% over August with a net equity market exposure of 24.7% (49.2% long and 24.4% short). The Fund's since inception (May 2006) return is 14.11% pa (ASX Accumulation Index 4.18% pa) with a standard deviation of 7.89% pa (Index 14.86%).
The Optimal Australia Absolute Trust returned 0.14% for August with a net risk exposure of 9.2% and gross risk exposure of 61.2%. The Fund is characterised by low risk with a Sortino Ratio of 5.39 (ASX Accumulation Index 0.06) and high reward-to-risk with a Sharpe Ratio of 1.81 (Index 0.12). All data is since the Fund inception in September 2008.
Morphic Global Opportunities Fund returned -1.57% over August with net leverage of 88%. The Fund's lower risk is evidenced by a downside deviation of 1.87% (ASX 200 Accum 5.70%). The Sortino ratio of 14.88% as compared to 3.37% (Index) and the Sharpe ratio of 3.10 compared to 1.87 (Index) demonstrate the Fund's strong risk-adjusted returns.
The Aurora Fortitude Absolute Return Fund returned 0.18% for August bringing the Fund's percentage of positive months to 87% since March 2005. Sentiment towards China appears to have turned with the materials index posting a solid 3.7% gain for the month. US Macro data continued to impress, however September does bring a large number of Macro risks to the table including the Tapering debate; Fed Chairman continuity; US Debt Ceiling; German Elections and ongoing tensions in Syria.
Pengana Australian Equities Fund returned 2.27% for August with a cash holding of 26% at month-end. The largest positive contributors to the month's performance were McMillan Shakespeare (validating the Fund's decision to acquire additional shares during the strong reaction to the proposed regulatory change), Seven West Media, Resmed, Woolworths and Ainsworth Gaming.
Updated AFM Fund Reviews were also completed on the following funds this week:
The Bennelong Long Short Equity 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 a ten year track record and annualised net returns of over 20%. Since inception in January 2002 the Fund has had positive annual returns each year, including an 11.95% return in 2008 and 20.6% in 2011, both of which were negative years for the ASX200. 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.
For something completely different - things you need to know when you are in leadership.
On that note, enjoy the week-end!
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
