NEWS
Performance Report: Bennelong Kardinia Absolute Return Fund
16 Apr 2021 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund has returned +8.75% p.a. with an annualised volatility of 7.61% since inception in May 2006. By contrast, the ASX200 Accumulation Index has returned +6.19% p.a. with an annualised volatility of...
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16 Apr 2021 - Performance Report: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| 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 | The Fund's capacity to significantly outperform in falling and volatile markets is highlighted by the following statistics (since inception): Sortino ratio of 1.24 vs the Index's 0.27, maximum drawdown of -11.71% vs the Index's -47.19%, and down-capture ratio of 48.66%. The Fund's down-capture ratio indicates that, on average, the Fund has fallen less than half as much as the market during the market's negative months. The Fund returned -0.36% in March. Positive contributors included Cyprium Metals, NAB, Bluescope Steel, Graincorp and Pentanet. Detractors included Zip Co, Fortescue, Proteomics and Nickel Mines. The Short Book also detracted from performance. Kardinia kept their net market exposure relatively steady at 68.4% (87.1% long and 18.7% short) with new positions including Cyprium and Webjet offset by reduced positions in some resource holdings and the sale of Independence Group. They maintain a bias towards stocks that benefit from a re-opening of economies scenario, with Banks, Resources and Technology the largest sector weights. |
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Fund Review: Bennelong Long Short Equity Fund March 2021
16 Apr 2021 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available. The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index...
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16 Apr 2021 - Fund Review: Bennelong Long Short Equity Fund March 2021
By: Australian Fund Monitors
AFM Fund Review - March 2021 (pdf format)
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index, with over 19-years' track record and an annualised returns of 14.10%.
- The consistent returns across the investment history highlight the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 0.83 and 1.31 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - March 2021 (pdf format)
Performance Report: Bennelong Long Short Equity Fund
15 Apr 2021 - Australian Fund Monitors
The Bennelong Long Short Equity Fund has returned +14.10% p.a. with an annualised volatility of 12.76% since inception in February 2002. By contrast, the ASX200 Accumulation Index has returned +8.10% p.a. with an annualised volatility of...
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15 Apr 2021 - Performance Report: Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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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's Sharpe and Sortino ratios (since inception) of 0.83 and 1.31 respectively, by contrast with the Index's Sharpe of 0.39 and Sortino of 0.43, highlight its capacity to achieve superior risk-adjusted returns while avoiding the market's downside volatility. The Fund's significant outperformance in falling markets is demonstrated by the following statistics (since inception): worst month of -10.11% vs the Index's -20.65%, maximum drawdown of -23.77% vs the Index's -47.19%, and down-capture ratio of -162%. The Fund's down-capture ratio indicates that, on average, it has risen during the market's negative months. Bennelong noted the rotation into leveraged cyclicals which hit the Fund in February continued into the first half of March. The portfolio stabilised in the second half of March, ending the month down -5.95%. Contribution was spread across half a dozen sectors with none standing out. Contribution from the top and bottom pairs was similar in magnitude. |
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Performance Report: Cyan C3G Fund
14 Apr 2021 - Australian Fund Monitors
The Cyan C3G Fund has risen +56.29% over the past 12 months vs the ASX200 Accumulation Index's +37.47%. Since inception in August 2014, the Fund has returned +15.98% p.a. against the Index's +7.25%.
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14 Apr 2021 - Performance Report: Cyan C3G Fund
By: Australian Fund Monitors
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | After a run of positive months, the Fund returned -3.1% in March. Two strong performers during the month included Alcidion and Universal Biosensors, while some of the Fund's longer-term holdings including Swift Media, Readcloud, Mighty Craft and Quickstep retraced more than 10%, and a handful including Raiz, Vita Group and Kip McGrath experienced smaller declines. Cyan noted the majority of these stocks had posted significant gains in recent months, so last month's declines weren't unexpected. Cyan remains positive on the long-term positioning of these companies and stay committed to their investments unless there are significant negative fundamental changes. In the coming months Cyan expect some good news from their already-committed pipeline of IPO and pre-IPO positions in companies such as the Afterpay-backed venture capital company AP Ventures and influencer marketing platform Tribe. The Fund has enjoyed a strong start to April and Cyan are excited about a number of company specific opportunities that should play out in the coming months. |
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Performance Report: DS Capital Growth Fund
13 Apr 2021 - Australian Fund Monitors
The DS Capital Growth Fund rose +1.94% over the March quarter and has risen +54.92% over the past 12 months vs the ASX200 Accumulation Index's +37.47%. Since inception in January 2013, the Fund has returned +15.80% p.a. with an annualised...
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13 Apr 2021 - Performance Report: DS Capital Growth Fund
By: Australian Fund Monitors
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| Fund Overview | The investment team looks for industrial businesses that are simple to understand; they generally avoid large caps, pure mining, biotech and start-ups. They also look for: - Access to management; - Businesses with a competitive edge; - Profitable companies with good margins, organic growth prospects, strong market position and a track record of healthy dividend growth; - Sectors with structural advantage and barriers to entry; - 15% p.a. pre-tax compound return on each holding; and - A history of stable and predictable cash flows that DS Capital can understand and value. |
| Manager Comments | The March quarter featured the February reporting season with most of DS Capital's businesses reporting results in line with their expectations. They noted that the underlying operations of almost all their businesses continued to perform well in an unusual environment. Top contributors included Resimac, Dusk and Kogan. DS Capital's view is that short to medium term economic conditions will largely remain dependent on the continuing impact of Covid-19. They also noted that their investment process has long been focused on identifying businesses offering earnings growth in a variety of environments over the long term. Should the expectation of rates rising sooner than previously expected materialise, then DS Capital believe it is likely that economic conditions are also improving and will be accompanied by stronger earnings growth. In this event, they expect that stronger earnings should provide some insulation against any impact that higher interest rates may have on derating earnings multiples. They continue to monitor inflation and interest rates for evidence of a more significant change. |
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Performance Report: AIM Global High Conviction Fund
12 Apr 2021 - Australian Fund Monitors
The AIM Global High Conviction Fund rose +4.13% in March, taking 12-month performance to +20.43%. Since inception in July 2015, the Fund has returned +4.91% p.a. with an annualised volatility of 11.24%.
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12 Apr 2021 - Performance Report: AIM Global High Conviction Fund
By: Australian Fund Monitors
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| Fund Overview | AIM look for the following characteristics in the businesses they want to own: - Strong competitive advantages that enable consistently high returns on capital throughout an economic cycle, combined with the ability to reinvest surplus capital at high marginal returns. - A proven ability to generate and grow cash flows, rather than accounting based earnings. - A strong balance sheet and sensible capital structure to reduce the risk of failure when the economic cycle ends or an unexpected crisis occurs. - Honest and shareholder-aligned management teams that understand the principles behind value creation and have a proven track record of capital allocation. They look to buy businesses that meet these criteria at attractive valuations, and then intend to hold them for long periods of time. AIM intend to own between 15 and 25 businesses at any given point. They do not seek to generate returns by constantly having to trade in and out of businesses. Instead, they believe the Fund's long-term return will approximate the underlying economics of the businesses they own. They are bottom-up, fundamental investors. They are cognizant of macro-economic conditions and geo-political risks, however, they do not construct the Fund to take advantage of such events. AIM intend for the portfolio to be between 90% and 100% invested in equities. AIM do not engage in shorting, nor do they use leverage to enhance returns. The Fund's investable universe is global, and AIM look for businesses that have a market capitalisation of at least $7.5bn to guarantee sufficient liquidity to investors. |
| Manager Comments | Over the past quarter, the Fund rose +2.82%. Top 5 quarterly contributors included Alphabet, Berkshire Hathaway, Estee Lauder, UnitedHealth and Microsoft. The top 5 detractors were Keyence, Nike, Heineken, and Amazon.com. Over the past month, the Fund sold out of two businesses in full (Salesforce and Novo Nordisk), while also introducing two new businesses (Ninendo and Croda International). AIM noted that, while allowing for the likelihood of unexpected setbacks over the short-term, they believe that the combined fiscal, monetary, and public health policies in place are revealing the path towards a more 'open' and normalised economy in the second half of 2021 and beyond. |
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Performance Report: Surrey Australian Equities Fund
9 Apr 2021 - Australian Fund Monitors
The Surrey Australian Equities Fund has risen +62.84% over the past 12 months vs the ASX200 Accumulation Index's +37.47%. Since inception in June 2018, the Fund has returned +10.56% p.a. with an annualised volatility of 21.86%.
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9 Apr 2021 - Performance Report: Surrey Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Investment Manager follows a defined investment process which is underpinned by detailed bottom up fundamental analysis, overlayed with sectoral and macroeconomic research. This is combined with an extensive company visitation program where we endeavour to meet with company management and with other stakeholders such as suppliers, customers and industry bodies to improve our information set. Surrey Asset Management defines its investment process as Qualitative, Quantitative and Value Latencies (QQV). In essence, the Investment Manager thoroughly researches an investment's qualitative and quantitative characteristics in an attempt to find value latencies not yet reflected in the share price and then clearly defines a roadmap to realisation of those latencies. Developing this roadmap is a key step in the investment process. By articulating a clear pathway as to how and when an investment can realise what the Investment Manager sees as latent value, defines the investment proposition and lessens the impact of cognitive dissonance. This is undertaken with a philosophical underpinning of fact-based investing, transparency, authenticity and accountability. |
| Manager Comments | The Fund returned -0.5% in March. Top contributors during the month included Betmakers and People Infrastructure, while a small position in CleanSpace had an amplified negative impact on total fund returns. Surrey noted that, despite the marginal decline last month, they are pleased with the Fund's performance over the past 12 months and since inception, particularly given that this has come at a time of heightened market nervousness and doubt as to what type of returns all asset classes could deliver. Over the period they remained well invested, ending March with 4.5% in cash. The portfolio is well diversified across 31 individual holdings and by sector and size. By sector, Industrials and IT had the greatest weighting. Top holdings at month-end included Auckland International Airports, Betmakers Group, Pointsbet Holdings, Sealink Travel and Uniti Group. |
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Performance Report: Quay Global Real Estate Fund
31 Mar 2021 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +4.26% in February which, given the sharp increase in bond yields, Quay noted highlights that there is no strong long-term correlation between listed real estate and bond yields. Since inception in...
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31 Mar 2021 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | Underlying constant current stock returns were up +5.3% reflecting the ongoing recovery in real estate values. During the month, the so called 're-open trade' played a meaningful part of in the fund's performance. Strong gains in retail (Brixmor Property, Scentre Group, Wharf REIC) and healthcare (Ventas) underwrote a pretty solid month for investors. At the other end of the spectrum, the main drag on performance were the pandemic 'superstars' including European storage, German residential and data storage. Quay still believe these sectors have very bright long-term prospects and they remain happy holders across their preferred names. |
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Fund Review: Insync Global Capital Aware Fund February 2021
29 Mar 2021 - Australian Fund Monitors
Latest Fund Review on Insync Global Capital Aware Fund is now available. The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend...
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29 Mar 2021 - Fund Review: Insync Global Capital Aware Fund February 2021
By: Australian Fund Monitors
AFM Fund Review - February 2021 (pdf format)
INSYNC GLOBAL CAPITAL AWARE FUND
Attached is our most recently updated Fund Review on the Insync Global Capital Aware Fund.
We would like to highlight the following:
- The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend growth and downside protection.
- Portfolio selection is driven by a core strategy of investing in companies with sustainable growth in dividends, high returns on capital, positive free cash flows and strong balance sheets.
- Emphasis on limiting downside risk is through extensive company research, the ability to hold cash and long protective index put options.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - February 2021 (pdf format)
Performance Report: Equitable Investors Dragonfly Fund
26 Mar 2021 - Australian Fund Monitors
The Equitable Investors Dragonfly Fund rose +24.98% in February, outperforming the ASX200 Total Return Index by +23.98% and taking 12-month performance to +59.82% vs the Index's +6.48%.
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26 Mar 2021 - Performance Report: Equitable Investors Dragonfly Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is an open ended, unlisted unit trust investing predominantly in ASX listed companies. Hybrid, debt & unlisted investments are also considered. The Fund is focused on investing in growing or strategic businesses and generating returns that, to the extent possible, are less dependent on the direction of the broader sharemarket. The Fund may at times change its cash weighting or utilise exchange traded products to manage market risk. Investments will primarily be made in micro-to-mid cap companies listed on the ASX. Larger listed businesses will also be considered for investment but are not expected to meet the manager's investment criteria as regularly as smaller peers. |
| Manager Comments | Key contributors to performance in February included Ellume (unlisted) and Scout Security (SCT). Key detractors included Comms Group (CCG) and Spacetalk (SPA). Equitable Investors noted the Fund's listed investments had a strong month with mostly pleasing half-year financial reports. NAV benefited from a revaluation of the unlisted holding in digital diagnostics company Ellume. Reporting season highlights included a significant turnaround in earnings at iSelect (ISU) and the resumption of dividends at Empired (EPD). More broadly, Equitable Investors counted 1.6 upgrades to consensus EPS expectations for every downgrade during February among stocks in their 'FIT' universe (essentially non-mining companies with market caps less than $5 billion). Equitable Investors' view is that rising interest rates are creating volatility in business valuations reliant on cash flows not forecast (or hoped) to drop through until many years in the future. They expect equities broadly to be choppy in the short-term as this shift in rates plays out. |
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