2 Oct 2018 - Performance Report: KIS Asia Long Short Fund

The KIS Asia Long Short Fund returned +0.08% in August, taking annualised performance since inception in October 2009 to +12.99% versus the ASX200 Accumulation Index's +7.90%. This return has been achieved with an annualised volatility of only 5.17% versus the Index's 11.48%. The Fund's Sharpe and Sortino ratios, 1.88 and 4.26 respectively, by contrast with the Index's Sharpe of 0.48 and Sortino of 0.62, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst focusing heavily on protecting investors' capital from the market's downside. This is also supported by the Fund's down-capture ratio since inception of -95.13%, indicating that the Fund, on average, has risen when the market has fallen.

On the winning side, the Fund's long position in TPG Telecom generated a return of 74bp in August. KIS have previously written about their positive outlook on TPG, however, KIS believe that, with regards to TPG's intended merger with Vodafone Hutchison Australia, the market has quickly priced in significant synergies and not assigned any meaningful probability that the ACCC may block the deal. As a result, KIS have closed their long position.

Key detractors in August included Marley Spoon-CDI (-37bp contribution), China Evergrande Group (-36bp), and Altium Limited (-33bp). KIS noted they are comfortable with their position in Marley Spoon-CDI, have reduced their short exposure in China Evergrande Group and have closed their short position in Altium Limited.