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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio of typically 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
| Manager Comments | The Insync Global Capital Aware Fund rose +1.96% in March, outperforming AFM's Global Equity Index by 0.73% and taking annualised performance since inception in October 2009 to +10.07%. The Fund's average negative return since inception of -1.67% versus the Index's -2.00%, maximum drawdown since inception of -10.98% versus the Index's -13.59% and down-capture ratio of 58.61% collectively highlight the Fund's successful put-protection strategy, the purpose of which is to serve as a buffer against sharp and deep falls in portfolio price. Positive contributors in March included Accenture, Intuit, Visa, Amadeus IT and Tencent. Negative contributors were RELX, Boston Scientific, Wirecard AG, Twenty-First Century Fox - B and Biogen Idec. No currency hedging continues across both the Global Capital Aware Fund and the Global Quality Equity Fund as Insync consider the main risks to the Australian dollar to be on the downside. Insync reduced the level of index put protection cover in January after one of the most significant falls in equity markets in December. This is in line with their rules-based process driven approach to managing downside risk. They noted that as the VIX levels have now fallen significantly, combined with the sharp bounce back in equity markets, they are gradually increasing the level of cover which currently sits at approximately 20% of the portfolio. |
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