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Performance Report: L1 Capital Long Short Fund
18 Jan 2021 - Australian Fund Monitors
The L1 Capital Long Short Fund rose +4.16% in December, outperforming the ASX200 Accumulation Index by +3.1% and taking performance over CY20 to +27.98% vs the Index's +1.40%. Since inception in September 2014, the Fund has returned...
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18 Jan 2021 - Performance Report: L1 Capital Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | L1 Capital uses a combination of discretionary and quantitative methods to identify securities with the potential to provide attractive risk-adjusted returns. The discretionary element of the investment process entails regular meetings with company management and other stakeholders as well as frequent reading and analysis of annual reports and other relevant publications and communications. The quantitative element of the investment process makes use of bottom-up research to maintain financial models such as the Discounted Cashflow model (DCF) which is used as a means of assessing the intrinsic value of a given security. Stocks with the best combination of qualitative factors and valuation upside are used as the basis for portfolio construction. The process is iterative and as business trends, industry structure, management quality or valuation changes, stock weights are adjusted accordingly. |
| Manager Comments | L1 Capital noted the Fund's robust returns in 2020 were driven by strong stock picking across a wide range of sectors. Returns were further supported by decisive buying during the crisis in March and positioning the portfolio for vaccine success in November. They believe the vaccine rollout will trigger a rotation into value and cyclical stocks (which lagged the market in 2020) and they expect this to be a major positive tailwind for performance heading into 2021. Key contributors to performance in December included Imdex Limited (long, +26%), Lyft (long, +23%), Teck Resources (long, +10%), Liberty Financial Group (long, +30%), Metcash (long, +17%), and Cenovus Energy (long, +16%). The portfolio ended the month most heavily weighted towards Australia/NZ, followed by Europe, North America and Asia. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
15 Jan 2021 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +1.07% in December, taking performance for CY20 to +9.13% with a volatility of 13.61% vs the ASX200's return of +1.40% with a volatility of 27.24%. Since inception in May 2006, the Fund has...
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15 Jan 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 | Since inception in May 2006, the Fund has returned +8.77% p.a. with an annualised volatility of 7.66%. By contrast, the Index has returned +5.99% p.a. with an annualised volatility of 14.48% over the same period. The Fund's capacity to perform well in falling and volatile markets is highlighted by its Sortino ratio (since inception) of 1.22 vs the Index's 0.25 and down-capture ratio (since inception) of 48.7%. Key contributors for the month included Fenix Resources, Fortescue Metals, Harvest Technology, MACA and Xero. Detractors included Worley, Flight Centre, Ardent Leisure, Qantas and the Fund's short book. Kardinia highlighted in their latest report that a key contributor to the equity market's performance in CY20 has been global central bank monetary policy, including interest rate cuts and quantitative easing by the RBA. They expect this policy support to continue in CY21. |
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Performance Report: Paragon Australian Long Short Fund
14 Jan 2021 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +9.14% in December, outperforming the ASX200 Accumulation Index +7.93% and taking 12-month performance to +26.67% vs the Index's +1.40%. Since inception in March 2013, the Fund has returned...
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14 Jan 2021 - Performance Report: Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market. |
| Manager Comments | Positive contributors for December came from battery minerals (Pilbara), base metals (EM2) and precious metals (WAF & Investigator) holdings. Paragon noted supportive drivers for precious metals remain, with US real rates resuming a downtrend of -1.08%, coupled with US$ breaking 2-yr lows of 89.5c, pushing cycle lows. Gains in gold, silver, copper and Brent Oil collectively represent great tailwinds for the portfolio going into 2021. Paragon believe unprecedented US Fed monetary stimulus and US fiscal stimulus has markets well placed to continue their secular bull run into 2021. As at the end of December, the portfolio was most heavily weighted towards Electric Vehicles, Technology, Base Metals and Gold. |
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Performance Report: Bennelong Long Short Equity Fund
13 Jan 2021 - Australian Fund Monitors
The Bennelong Long Short Equity Fund rose +11.66% over CY20 vs the ASX200 Accumulation Index's +1.40%. Since inception in February 2002, the Fund has returned +15.34% p.a. vs the Index's +7.97%.
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13 Jan 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 returned -3.08% in December as the Australian equity market experienced a rally in cyclicals and laggards. The outperformance of the Fund's long portfolio by some of the cyclicals and laggards in the short portfolio contributed to the Fund's weaker finish for the year. Top pairs for the month included long Xero / short TechnologyOne, and long Mineral Resources / short BHP. Bottom pairs included long BlueScope Steel / short Sims (SGM), and long Woolworths / short Metcash/Treasury Wine. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
8 Jan 2021 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +8.41% in November, taking 12-month performance to +7.43% vs the ASX200 Accumulation Index's -1.98%. Since inception in November 2009, the Fund has returned +10.60% p.a. vs the Index's +7.61%.
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8 Jan 2021 - Performance Report: Bennelong Twenty20 Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed as one portfolio but comprises and combines two separately managed exposures: 1. An investment in the top 20 stocks of the markets, which the Fund achieves by taking an indexed position in the S&P/ASX 20 Index; and 2. An investment in the stocks beyond the S&P/ASX 20 Index. This exposure is managed on an active basis using a fundamental core approach. The Fund may also invest in securities expected to be listed on the ASX, securities listed or expected to be listed on other exchanges where such securities relate to ASX-listed securities.Derivative instruments may be used to replicate underlying positions and hedge market and company specific risks. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Accumulation Index. The Fund typically holds between 40-55 stocks and thus is considered to be highly concentrated. This means that investors should expect to see high short-term volatility. The Fund seeks to achieve growth over the long-term, therefore the minimum suggested investment timeframe is 5 years. |
| Manager Comments | As at the end of November, the portfolio's weightings had been increased in the Discretionary, Energy and Financials sectors, and decreased in the IT, Consumer Staples, Health Care, Industrials, Materials and REIT's sectors. Together with positions in the top 20 stocks, the Fund is selectively invested in a group of high quality growth stocks, providing opportunity for the Fund to outperform over time. The portfolio is significantly overweight the Discretionary sector; Fund Weight: 34.5%, Benchmark Weight: 7.7%. Bennelong believe the Fund is well set up to provide enhanced index returns over the long-term. |
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Performance Report: Ark Global Fund - Class B AUD Unhedged
8 Jan 2021 - Australian Fund Monitors
The Ark Global Fund - Class B AUD (Unhedged) has returned +7.86% p.a. with an annualised volatility of 13.11% since inception in July 2017. The Fund has achieved a negative down-capture ratio (since inception) of -84.36%, highlighting its...
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8 Jan 2021 - Performance Report: Ark Global Fund - Class B AUD Unhedged
By: Australian Fund Monitors
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| Fund Overview | The investment objective of the Fund is to achieve long-term capital appreciation with low correlation to global equity markets through investment in the Underlying Fund. Fund One is a global macro fund that utilises quantitative research including machine learning techniques and fully automated trading algorithms which will aim to generate positive uncorrelated returns relative to any significant equity benchmark. The traded instruments are either major FX pairs or the most liquid exchange traded stock index, bond, and commodity futures across North America, Europe and Asia Pacific. The algorithm backtests over 10 years of tick data and in order to do so effectively requires machine learning to filter noise and identify meaningful signals, which results in statistically significant prediction of price movements. In production this processing is done in real time and the portfolio reacts to asset movements by rebalancing automatically to the desired risk exposure through the market impact optimised execution logic. Risk management layers built into the algorithm have been developed using the experience the team has gained from their decades in highly liquid fast-moving markets in the proprietary High Frequency Trading world. This allows the system to trade autonomously but safely to all trading opportunities and potential system issues, and to alert the team to any behaviour outside of strictly controlled bounds. The Fund is a 'feeder fund' which indirectly gains exposure to the underlying assets by investing all or substantially all of its assets in the Underlying Fund. The Fund may retain a certain amount of cash from the investment in the Fund for the purpose of payment of costs, fees, hedging and expenses. |
| Manager Comments | The best performance assets for the month were: Hang Seng Index (+3.13% of NAV), E-mini S&P 500 (+2.13% of NAV) and Euro Stoxx 50 (+2.06% of NAV). The worst performing assets were: Nikkei 225 (-1.06% of NAV), E-mini Russell (-2.30% of NAV) and Hang Seng China Ent. Index (-3.98% of NAV). |
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Performance Report: Bennelong Concentrated Australian Equities Fund
7 Jan 2021 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +5.80% in November, taking 12-month performance to +11.72% vs the ASX200 Accumulation Index's -1.98%. Since inception in February 2009, the Fund has returned +16.61% p.a. vs the Index's +9.96%.
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7 Jan 2021 - Performance Report: Bennelong Concentrated Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The overriding objective of the Concentrated Australian Equities Fund is to seek investment opportunities which are under-appreciated and have the potential to deliver positive earnings, while satisfying our stringent quality criteria. Bennelong's investment process combines bottom-up fundamental analysis together with proprietary investment tools which are used to build and maintain high quality portfolios that are risk aware. The portfolio typically consists of 20-35 high-conviction stocks from the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to ASX-listed securities. Derivative instruments are mainly used to replicate underlying positions and hedge market and company specific risks. |
| Manager Comments | As at the end of November, the portfolio's weightings had been increased in the Discretionary, Industrials and Energy sectors, and decreased in the Health Care, IT, Materials and Financials sectors. The portfolio was significantly overweight the Discretionary sector (Fund weight: 40.7%, Benchmark weight: 7.7%) and underweight the Financials sector (Fund weight: 6.6%, Benchmark weight: 27.6%). |
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Performance Report: Insync Global Quality Equity Fund
7 Jan 2021 - Australian Fund Monitors
The Insync Global Quality Equity Fund rose +3.73% in November, taking 12-month performance to +14..96% vs AFM's Global Equity Index's +6.02%. Since inception of the strategy in October 2009, the Fund has returned +14.00% p.a. with an...
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7 Jan 2021 - Performance Report: Insync Global Quality Equity Fund
By: Australian Fund Monitors
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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 typically of 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. |
| Manager Comments | The Fund's capacity to protect investors' capital in falling and volatile markets is highlighted by the following statistics (since inception): Sortino ratio of 1.99 vs the Index's 1.36, average negative monthly return of -1.76% vs the Index's -2.09%, and down-capture ratio of 69.24%. Insync noted the Fund's underperformance vs the Index's +7.52% in November was due to the very strong 'risk-on' rally which impacted the Fund's short-term results. The Fund's top holdings at month-end included Dollar General, Nintendo, Qualcomm, Domino's Pizza, PayPal, Facebook, Visa, S&P Global, Nvidia and Microsoft. The portfolio was significantly overweight the IT sector and underweight the Industrials and Financials sectors. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
7 Jan 2021 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +8.21% in November, taking 12-month performance to +4.90% with a volatility of 14.04% vs the ASX200 Accumulation Index's return of -1.98% with a volatility of 27.34%. Since inception in May...
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7 Jan 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 | Key contributors in November included Commonwealth Bank, National Australia Bank, Worley, Flight Centre and Qantas. Detractors included Zip Co, Breville Group, Cleanspace, Tesserent and the Fund's Short Book. Kardinia increased their net market exposure from 30.4% to 73.0% (74.1% long and 1.1% short) with the key changes being the closure of most of their Short Book, increased weightings in 're-opener' stocks such as Flight Centre, Worley and the banks, partially offset by a reduction in 'lockdown' stocks such as Kogan and Redbubble. Kardinia maintain a bias towards stocks that benefit from a re-opening of economies scenario. |
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Performance Report: Prime Value Emerging Opportunities Fund
6 Jan 2021 - Australian Fund Monitors
The Prime Value Emerging Companies Fund rose +9.05% in November, taking 12-month performance to +20.09% vs the ASX200 Accumulation Index's -1.98%. Since inception in October 2015, the Fund has returned +14.64 p.a. vs the Index's +9.50%.
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6 Jan 2021 - Performance Report: Prime Value Emerging Opportunities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is comprised of a concentrated portfolio of securities outside the ASX100. The fund may invest up to 10% in global equities but for this portion typically only invests in New Zealand. Investments are primarily made in ASX listed and other exchange listed Australian securities, however, it may also invest up to 10% in unlisted Australian securities. The Fund is designed for investors seeking medium to long term capital growth who are prepared to accept fluctuations in short term returns. The suggested minimum investment time frame is 3 years. |
| Manager Comments | Key positive contributors for the month included Helloworld Travel, News Corp and Southern Cross Media. Key detractors were Bapcor, Breville Group and Collins Foods. Prime Value's view is that the outlook appears to be positive for equities; an impending global rollout of multiple vaccines with high efficacy, global economic growth likely to rebound strongly in 2021 as economies re-open, and interest rates likely to stay very low for many years - a supportive combination. They remain optimistic on the outlook for the Fund and continue to find many appealing new investments. |
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