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| Fund Overview | The manager follows a disciplined, process-driven, and thematic strategy focused on five core investment strategies: 1) Growth stocks that are really value stocks; 2) Traditional deep value; 3) The life sciences; 4) Miners and drillers expanding production into supply deficits; 5) Global special situations; The manager uses a macro overlay to manage exposure, hedging in three ways: 1) Direct shorts 2) Upside exposure to the VIX index 3) Index optionality |
| Manager Comments | Stanmore Coal fell after an approx. $240m takeover bid failed, which was Frazis' preferred outcome. Frazis exited Samsung above their purchase price which, they noted, was a way of correcting the Fund's underperformance over the past few months caused by their exposure to the global smartphone sector. The Fund has maintained a 4% holding in Apple and approximately a 3% holding in Sunny Optical. In addition, their top energy pick, Lundin Petroleum, has recovered its losses despite the dramatic fall in crude oil. Frazis believe any further upside in crude, while risky for the global economy, should significantly benefit the Fund. As at the end of Jan 2019, Frazis' Australian stocks had significantly outperformed their global investments and are now some of the Fund's largest positions; Afterpay at 7%, Stanmore Coal at 6% and Cooper Energy at 6%. The Fund has also maintained exposure to Chinese tech stocks which Frazis expect to benefit from the stimulus as it makes its way through the economy. They pointed out the stimulus in 2016 reversed falls in PMIs (which have given plenty of false signals over the past decade) and led to a bull market in global stocks. While off their lows, the Fund's US-listed Chinese stocks remain significantly below their 2018 highs, unlike US stocks which have largely recovered. |
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