NEWS
Performance Report: AIM Global High Conviction Fund
6 Jan 2021 - Australian Fund Monitors
The AIM Global High Conviction Fund rose +5.44% in November, taking 12-month performance to +14.57% vs AFM's Global Equity Index's +6.02%. Since inception in July 2015, the Fund has returned +4.82% p.a. with an annualised volatility of 11.37%.
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6 Jan 2021 - Performance Report: AIM Global High Conviction Fund
By: Australian Fund Monitors
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| Fund Overview | The strategy is long-only, with a mandate to be between 90% - 100% invested. The Fund also employs a construction framework that ensures there is a sensible mix of exposures within the limited number of businesses in the portfolio. These limits are: - Maximum individual position size 7.5% - Minimum individual position size 2.5% - Maximum sector exposure 30% The Fund targets a cash allocation of between 0-10% but can have as much as 20% of the portfolio in cash in the event of an unprecedented global shock. Liquidity is extremely important. The Fund will typically look to invest in businesses within a market cap range of US$7.5billion all the way up to the largest companies in the world with market capitalisations in excess of $200b. Occasionally, we may find a business that exhibits the traits of a quality investment, but it is much earlier in its business cycle. The Fund can invest in these businesses, but they must clear a much higher bar for inclusion. Individually, these future compounders cannot comprise more than 4% of the fund, these businesses cannot collectively exceed 10% of the fund. |
| Manager Comments | AIM believe November was a month that can be split into three distinct narratives: pre-US election (up to the 3rd), post-US election but pre-vaccine (from the 3rd to the 6th), and post-vaccine (from the 9th onwards). AIM's view is that the US election result is a reasonably constructive outcome for investors. They expect the Biden administration to take a more consensus-and-coalition-building approach to foreign policy, while some of the Democrats' more unorthodox economic policies are unlikely to attain Congressional approval given their narrow lead in the House of Representatives. AIM noted the current market narrative is to rotate to businesses that can benefit from the reflation of re-opening trades. They expect several of the businesses in the portfolio to benefit materially from a reopening; Coca-Cola and Heineken were both hit incredibly hard by the lockdown as a meaningful component of their sales are made in restaurants, pubs and sporting venues. As a result, these two businesses, along with LVMH, Mastercard and Berkshire Hathaway, were among the best performers in November. Businesses such as Microsoft and Amazon were less active. |
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Performance Report: Bennelong Australian Equities Fund
5 Jan 2021 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +6.81% in November, taking 12-month performance to +17.71% vs the ASX200 Accumulation Index's -1.98%. Since inception in February 2009, the Fund has returned +14.49% p.a. vs the Index's 9.96%.
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5 Jan 2021 - Performance Report: Bennelong Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Bennelong Australian Equities Fund seeks quality investment opportunities which are under-appreciated and have the potential to deliver positive earnings. The investment process combines bottom-up fundamental analysis with proprietary investment tools that are used to build and maintain high quality portfolios that are risk aware. The investment team manages an extensive company/industry contact program which helps identify and verify various investment opportunities. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to the ASX-listed securities. The Fund typically holds between 25-60 stocks with a maximum net targeted position of an individual stock of 6%. |
| Manager Comments | The Fund's Sharpe and Sortino ratios (since inception), 0.83 and 1.16 respectively, by contrast with the Index's Sharpe of 0.58 and Sortino of 0.73, highlight its capacity to achieve superior risk-adjusted returns while avoiding the market's downside volatility. The Fund's up-capture ratio (since inception) of 139.4% indicates that, on average, the Fund has significantly outperformed during the market's positive months. As at the end of November, the portfolio's weightings had been increased in the Discretionary, Communication and Industrials sectors, and decreased in the Health Care, IT, Materials and Financials sectors. Relative to the ASX300, the portfolio was significantly more heavily weighted towards the Discretionary sector (Fund weight: 41.6%, Benchmark weight: 7.8%) and significantly underweight the Financials sector (Fund weight: 8.4%, Benchmark weight: 26.3%). |
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Performance Report: Laureola Investment Fund
4 Jan 2021 - Australian Fund Monitors
The Laureola Investment Fund rose +0.15% in November, taking performance since inception to +16.42% p.a. with an annualised volatility of 5.63%. By contrast, the S&P500 Accumulation Index has returned +13.69% p.a. with an annualised...
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4 Jan 2021 - Performance Report: Laureola Investment Fund
By: Australian Fund Monitors
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| Fund Overview | The investment strategy of The Laureola Investment Fund is dynamic and flexible, designed to take advantage of the frequent but temporary pricing anomalies of an asset class that is not yet fully understood by the majority of participants. Laureola Advisors applies 'best practices' common in the management of traditional assets, particularly the use of independent, in-house, proprietary research. |
| Manager Comments | The Fund's returns in November were helped by the maturity of a small policy and a resale at a price higher than the NAV value - again confirming the conservative valuation. Laureola noted the Fund's flat return for the month illustrates that the Fund is being managed and value properly, and that the manager has resisted the temptation to boost valuations artificially. Laureola are confident the Fund can achieve 8% - 12% annually as the portfolio is well diversified with 187 policies, several of which are expected to mature in the coming months. |
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Performance Report: The Airlie Australian Share Fund
4 Jan 2021 - Australian Fund Monitors
The Airlie Australian Share Fund rose +10.22% in November, taking 12-month performance to +4.67% vs the ASX200 Accumulation Index's -1.98%. Since inception in June 2018, the Fund has returned +8.95% p.a. vs the Index's +7.19%. These...
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4 Jan 2021 - Performance Report: The Airlie Australian Share Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is long-only with a bottom-up focus. It has a concentrated portfolio of 15-35 stocks (target 25). Maximum cash holding of 10% with an aim to be fully invested. Airlie employs a prudent investment approach that identifies companies based on their financial strength, attractive durable business characteristics and the quality of their management teams. Airlie invests in these companies when their view of their fair value exceeds the prevailing market price. It is jointly managed by Matt Williams and Emma Fisher. Matt has over 25 years' investment experience and formerly held the role of Head of Equities and Portfolio Manager at Perpetual Investments. Emma has over 8 years' investment experience and has previously worked as an investment analyst within the Australian equities team at Fidelity International and, prior to that, at Nomura Securities. |
| Manager Comments | At month-end, the portfolio's top positions included Aurizon Holdings, BHP Group, CBA, CSL, Macquarie Group, Mineral Resources, Origin Energy, Pacific Current Group, Wesfarmers and Westpac Banking Corporation. By sector, the portfolio was most heavily weighted towards the Financials and Consumer Discretionary sectors. |
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Performance Report: Bennelong Emerging Companies Fund
4 Jan 2021 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +6.87% in November, taking 12-month performance to +8.54% vs the ASX200 Accumulation Index's -1.98%. Since inception in November 2017, the Fund has returned +28.85% p.a. vs the Index's +7.31%.
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4 Jan 2021 - Performance Report: Bennelong Emerging Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may invest in securities expected to be listed on the ASX within 12 months. The Fund may also invest in securities listed, or expected to be listed, on other exchanged where such securities relate to ASX-listed securities |
| Manager Comments | True to the Fund's investment style, Bennelong continue to seek to invest in high quality companies that they believe have solid growth prospects over the foreseeable future. They noted that, despite the inevitable ups and downs of the market in the short term, they believe the portfolio's investments are all incrementally building value which they expect will ultimately underpin decent returns over the long-term. The portfolio remains reasonably diversified across sector and risk-return drivers. Bennelong believe it is currently well positioned for attractive returns over the long-term, regardless of the market's short-term activity. |
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Performance Report: Delft Partners Global High Conviction
4 Jan 2021 - Australian Fund Monitors
The Delft Partners Global High Conviction Strategy rose +8.69% in November, outperforming AFM's Global Equity Index by +1.17% and taking performance since inception in August 2011 to +14.93% p.a. with an annualised volatility of 11.84%.
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4 Jan 2021 - Performance Report: Delft Partners Global High Conviction
By: Australian Fund Monitors
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| Fund Overview | The quantitative model is proprietary and designed in-house. The critical elements are Valuation, Momentum, and Quality (VMQ) and every stock in the global universe is scored and ranked. Verification of the quant model scores is then cross checked by fundamental analysis in which a company's Accounting policies, Governance, and Strategic positioning is evaluated. The manager believes strategy is suited to investors seeking returns from investing in global companies, diversification away from Australia and a risk aware approach to global investing. It should be noted that this is a strategy in an IMA format and is not offered as a fund. An IMA solution can be a more cost and tax effective solution, for clients who wish to own fewer stocks in a long only strategy. |
| Manager Comments | The Strategy has achieved an average positive monthly return since inception of +3.28% vs the Index's +3.01%. The Strategy's Sharpe and Sortino ratios for performance since inception are 1.07 and 1.95 respectively. With respect to the Index's 10 best and worst months since the Strategy's inception, the Strategy has outperformed in 9 out of 10 of the Index's best months and 7 out of 10 of the Index's worst months. This highlights the Strategy's capacity to outperform in both rising and falling markets. |
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Performance Report: Montgomery Small Companies Fund
18 Dec 2020 - Australian Fund Monitors
The Montgomery Small Companies Fund rose +6.12% in November, taking 12-month performance to +21.11% vs the ASX200 Accumulation Index's -1.98%. Since inception in October 2019, the Fund has returned +18.06% p.a. vs the Index's +0.75%.
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18 Dec 2020 - Performance Report: Montgomery Small Companies Fund
By: Australian Fund Monitors
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| Fund Overview | Montgomery Lucent, a joint venture between Lucent Capital Partners and Montgomery Investment Management, is the investment manager of the Fund. Lucent Capital Partners is owned by its founders Gary Rollo and Dominic Rose. Gary and Dominic have worked together for three years as at February 2020 and have a combined three decades of portfolio management and equities research experience. The manager is able to invest up to 10% of the portfolio in pre-IPO opportunities. They search for companies likely to benefit from secular trends, industry change and with substantial competitive advantages. Cash typically ranges around 10%. |
| Manager Comments | The largest positive contributors for November included Corporate Travel Management, NRW Holdings and Webjet. Montgomery noted the arrival of better than expected vaccine news drove a strong surge in COVID-19 impacted stocks, such as CTD and WEB in the travel sector, supporting an earnings recovery scenario as travel barriers are removed and demand returns over the foreseeable future. The largest detractors included Adairs, Marley Spoon and Bapcor. All three had been COVID-19 winners and as such became sources of profits over the month as the market rotated towards economic reopening stories. |
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Performance Report: Insync Global Capital Aware Fund
18 Dec 2020 - Australian Fund Monitors
The Insync Global Capital Aware Fund rose +2.62% in November, taking 12-month performance to +19.06% vs AFM's Global Equity Index's +6.02%. Since inception in October 2009, the Fund has returned +12.04% p.a. with an annualised volatility of 9.90%.
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18 Dec 2020 - Performance Report: Insync Global Capital Aware 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 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 Fund's capacity to protect investors' capital in falling and volatile markets is highlighted by the following statistics (since inception): Sortino ratio of 1.80 vs the Index's 1.36, maximum drawdown of -10.98% vs the Index's -13.59%, and down-capture ratio of 61.7%. 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: NWQ Fiduciary Fund
18 Dec 2020 - Australian Fund Monitors
The NWQ Fiduciary Fund has returned +6.16% with a volatility of 9.97% over the past 12 months vs the ASX200 Accumulation Index's return of -1.98% with a volatility of 27.34%. Since inception in May 2013, the Fund has returned +5.61% p.a....
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18 Dec 2020 - Performance Report: NWQ Fiduciary Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund aims to produce returns after management fees and expenses of RBA Cash Rate + 4.0-5.0% p.a. over rolling five-year periods. Furthermore, the Fund aims to achieve these returns with volatility that is a fraction of the Australian equity market, in order to smooth returns for investors. |
| Manager Comments | The Fund's capacity protect investors' capital in falling and volatile markets is highlighted by the following statistics (since inception): Sortino ratio of 1.03 vs the Index's 0.54, maximum drawdown of -8.77% vs the Index's -26.75%, and down-capture ratio of 13.25%. The Fund's underlying managers prioritise fundamentals and generally invest in cash generative businesses that have a runway for sustainably growing earnings (and short businesses with the opposite characteristics). NWQ noted this approach has the potential to generate sustainable long-term returns but can be susceptible to short-term rotations away from high-quality or growth businesses and into low-quality or deep value businesses, as occurred in November. NWQ added that these rotations are typically temporary (lasting between 1-3 months) and are generally followed by periods of strong performance for the Fund, as was seen in 2013 and 2017. |
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Performance Report: Paragon Australian Long Short Fund
18 Dec 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +1.16% in November, taking 12-month performance to +16.59% vs the ASX200 Accumulation Index's -1.98%. Since inception in March 2013, the Fund has returned +10.82% p.a. vs the Index's +7.62%.
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18 Dec 2020 - 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 in November included Pilbara, Chalice and PolyNovo, offset by declines in the Fund's gold and technology holdings. Paragon noted market rotations are hard to time and in any case are temporary in nature. Their outlook remains constructive. Copper hit 7yr highs and Brent Oil rose +27% during the month, both of which were great tailwinds for Paragon's base metals and oil stock picks. The Fund ended the month with 32 long positions and 5 short positions. |
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