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| FUM (millions) | |
| Fund Overview | The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. Detailed analysis of company valuations using financial statements and forecasts, particularly focusing on free cash flow, is conducted. Technical analysis is used to validate the Manager's fundamental research and valuations and to manage market timing. A significant portion of the Fund's overall performance can be attributed to the attention and importance given to the macro economic outlook and the ability and willingness to adjust the Fund's market risk. |
| Manager Comments | In September, the Fund returned -5.88%. Key contributors included Boral (+37 basis point contribution), Exore Resources (+20bp), Arden Leisure (+18bp), Aristocrat Leisure (+17bp) and West African Resources (+15bp). Detractors included Zip Co (-112bp), Aumina (-31bp), Harvest Technology (-28bp), Commonwealth Bank (-28bp) and Fortescue Metals (-25bp). While some of the Fund's recent strong performers were weaker during September, particularly in the Financials and Consumer Discretionary sectors, Bennelong continue to expect good returns from these stocks over the medium term. Kardinia reduced the Fund's net market exposure from 74.5% to 37.8% (74.9% long and 37.1% short), with the key changes being an increase in the Fund's short position in Share Price Index Futures. They continue to build the Fund's exposure to stocks that benefit from a re-opening scenario. Kardinia believe good progress is being made on potential vaccines and treatments. They expect Governments will increasingly move towards a 'living with the virus' approach as the economic damage from lockdowns becomes apparent. |
| More Information |
