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| Fund Overview | Whilst the Fund's primary strategy is focused on long/short equities, the ability to retain discretionary powers to allocate across a number of other investment strategies is reserved. These strategies may include, but not be limited to: convertible bond investments, portfolio hedging, equity related arbitrage, special situations (e.g. merger arbitrage, rights offerings, participation in international public offerings and placements, etc.). The Fund's geographic focus is Asia excluding Japan, but including Australia). The Fund may invest outside of this region to the extent that: 1. The investment decision is driven from the Asian region or; 2. The exposure is intended to mitigate risk or enhance return from factors external to the Asian region. |
| Manager Comments | In November, key contributors included a long position in LiveHire (+37bp contribution), Rio Tinto (+31bp) and a short position in Coca-Cola Amatil (+31bp). The main detractor during the month was a long position in CYBC PLC (-84bp). KIS noted there were no other lines with losses greater than 30bp. In their latest report KIS highlight that 89% of assets were negative YTD, the worst result since 1901 (the beginning of the data series). They also briefly discussed the turnaround in global markets as central banks shift from policies of quantitative easing to quantitative tightening, pointing to coordinated falls in residential property markets in London, New York, Toronto, Sydney, and Melbourne, as well as slumping equity and credit markets. KIS Capital say that, especially in this environment, their ability to short is highly valuable. They noted that over the year their short positions have allowed them to deliver a positive return. Their suggestion to investors is, if you have direct equities in your portfolio, consider whether these companies will need access to credit markets or equity markets to fund their businesses. They also warn investors to be wary of asset owners (especially those who balance long term assets with short term liabilities) and high PE/PEG ratio stocks. KIS believe cash will be king by 2020 and thus believe investors should have some readily available. |
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