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| Fund Overview | In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. The Bennelong Market Neutral Fund, with same strategy and liquidity is available for retail investors as a Listed Investment Company (LIC) on the ASX. |
| Manager Comments | The Fund returned -2.95% in November. Bennelong noted a reversal in momentum in the market over the past couple of months has been presenting headwinds for some of the Fund's pairs. The bottom pairs in November were all very positive in the preceding year. Bennelong believe, to some extent, their performance reflects the market chasing laggards in the midst of a booming market. The Energy and Bank sectors experienced the greatest momentum reversal, however this didn't significantly influence the portfolio which had a modest positive return from its Energy pairs and a modest negative return from its one Bank pair. The tech sector was a laggard during the month, however the Fund's one Tech pair, XRO/TNE, was the top contributor. REH/BLD, FBU was amongst the weakest pairs. |
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