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| Fund Overview | The Fund invests in a portfolio of underlying managed funds which focus on investing in ASX listed companies. The Fund will not directly invest in equity markets or derivatives, but the underlying funds may use short selling or invest in derivatives to improve performance or reduce risk. The underlying managers and funds are selected only from funds managed in Australia. This reduces the risk of currency fluctuations, facilitates due diligence and ensures that each underlying fund manager is licensed by the Australian Securities Investments Commission (ASIC). A combination of quantitative performance analysis and qualitative operational due diligence is used to create a portfolio generally consisting of five to ten 'best of breed' funds. AFM's research has shown that selecting a relatively small group of funds results in better risk adjusted performance than that of a larger, more diversified group. Significant research from Australia and overseas shows that the performance of boutique funds, (particularly those where the principals remain actively involved in the day to day investment decisions) and smaller managers can provide more attractive returns than larger or more established managers. As a result the Fund may invest in funds managed by boutique fund managers where the principals invest alongside outside investors, creating an attractive alignment of interests. In addition the Fund may also invest in funds managed by early stage managers with less than three years history, but only where the principals concerned have a demonstrated track record of prior performance in a similar role, and where AFM has been able to conduct thorough due diligence on the management company and its operations. The underlying funds are monitored each month by AFM Prism Asset Management and AFM to ensure each fund's strategy and risk limits remain appropriate for current market conditions. The returns of each underlying fund are also analysed to ensure the original basis for inclusion in the portfolio remains relevant, and to allow new or additional funds to be added to enhance overall performance. |
| Manager Comments | The Prism Active Equity Fund returned 2.00% in February, compared to the S&P/ASX 200 Accumulation Index which rose 4.97% and was the Fund's best single month performance. As noted the Fund under-performed in a very strong equity market after out-performing (-0.96%) the weak market (-3.03%) in January. This outcome a result of the Fund's conservative philosophy which emphasizes capital protection. With the equity market now trading at fair to expensive valuations and some earnings growth expected in FY 2014 and 2015, equities are likely to be volatile with capital appreciation likely to be sector specific. In this environment funds with strong stock picking skills and sound risk management are likely to record out-performance. |
| More Information | » View detailed profile of this fund |
