NEWS
Performance Report: DS Capital Growth Fund
14 Dec 2020 - Australian Fund Monitors
The DS Capital Growth Fund rose +6.19% in November, taking 12-month performance to +15.70% vs the ASX200 Accumulation Index's -1.98%. Since inception in January 2013, the Fund has returned +15.64% p.a. with an annualised volatility of 11.47%.
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14 Dec 2020 - 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 Fund's Sharpe and Sortino ratios (since inception), 1.19 and 1.75 respectively, by contrast with the Index's Sharpe of 0.56 and Sortino of 0.66, highlight its capacity to produce superior risk-adjusted returns while avoiding the market's downside volatility. The Fund's up-capture and down-capture ratios for performance over the past 12 months, 117.8% and 72.9% respectively, indicate that, on average, the Fund has outperformed in both the market's positive and negative months. The Fund's ability to significantly outperform in falling markets is further supported by its down-capture ratio (since inception) of 45%. |
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Performance Report: Cyan C3G Fund
11 Dec 2020 - Australian Fund Monitors
The Cyan C3G Fund rose +12.20% in November, outperforming the ASX200 Accumulation Index by +1.99% and taking annualised performance since inception in August 2014 to +16.47% vs the Index's +6.74%.
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11 Dec 2020 - 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 | The Fund's holdings performed very well across the board in November. Top contributors included Readcloud (RCL), Raiz (RZI), Alcidion (ALC) and Quickstep (QHL). In Cyan's view, the most significant recent event has been the RBA's decision to cut interest rates to 0.1%. They believe the lowered interest rate makes asset classes other than term deposits and money market securities increasingly attractive. They noted that, while some pockets of the market have struggled, market optimism remains intact as evidenced by the recent 60% premium on the largest IPO of the year - Nuix. |
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Fund Review: Bennelong Kardinia Absolute Return Fund November 2020
9 Dec 2020 - Australian Fund Monitors
The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund, which has been in operation for more than 10 years, has a long-biased, research driven, active equity long/short strategy and invests in...
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9 Dec 2020 - Fund Review: Bennelong Kardinia Absolute Return Fund November 2020
By: Australian Fund Monitors
AFM Fund Review - November 2020 (pdf format)
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.
- The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies.
- The Fund has significantly outperformed the ASX200 Accumulation Index since its inception in May 2006 and also has significantly lower risk KPIs. The Fund has an annualised return of 8.74% p.a. with a volatility of 7.68%, compared to the ASX200 Accumulation's return of 5.94% p.a. with a volatility of 14.52%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Kristiaan Rehder and Stuart Larke have significant market experience, while Bennelong Funds Management provide infrastructure, operational, compliance and distribution capabilities.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - November 2020 (pdf format)
Performance Report: Bennelong Long Short Equity Fund
8 Dec 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund has risen +17.93% over the past 12 months with a volatility of 13.34% vs the ASX200 Accumulation Index's return of -1.98% with a volatility of 27.34%. Since inception in February 2002, the Fund has...
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8 Dec 2020 - 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 -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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Performance Report: Surrey Australian Equities Fund
4 Dec 2020 - Australian Fund Monitors
The Surrey Australian Equities Fund rose +11.36% in November, outperforming the ASX200 Accumulation Index by +1.15% and taking 12-month performance to +17.12% vs the Index's -1.98%. Since inception in June 2018, the Fund has returned...
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4 Dec 2020 - 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 | Surrey made numerous adjustments to the portfolio during the month, including adding to their larger holdings such as Auckland International Airport and Mineral Resources while introducing new names into the Fund such as AP Aegers. They discuss some of their changes in further detail in their latest report. The Fund ended November with 31 individual holdings and 2% in cash. Surrey noted the portfolio overall continues to be positioned for positive risk adjusted returns over the long-term. Surrey remain positive on the outlook driven by COVID-19 recovery, fiscal and monetary stimulus, low inflation, refreshed balance sheets, re-energised management teams and continued low government bond yields. |
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Performance Report: Ark Global Fund - Class B AUD Unhedged
3 Dec 2020 - Australian Fund Monitors
The Ark Global Fund - Class B AUD Unhedged rose +3.88% in October, outperforming AFM's Global Equity Index by +4.45% and taking annualised performance since inception in July 2017 to +9.21% p.a. with an annualised volatility of 13.07%.
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3 Dec 2020 - 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 performing assets for the month were: Nikkei 225 (+1.33% of NAV), Silver (+1.20% of NAV) and 10 Yr Japanese Govt Bond (+1.18% of NAV). The worst performing assets included: Gold (-1.23% of NAV), 10 Yr Canadian Govt Bond (-1.48% of NAV) and Euro Stoxx (-2.13% of NAV). |
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Performance Report: Touchstone Index Unaware Fund
3 Dec 2020 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +1.81% in October, taking annualised performance since inception in April 2016 to +6.38% with an annualised volatility of 15.58%.
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3 Dec 2020 - Performance Report: Touchstone Index Unaware Fund
By: Australian Fund Monitors
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| Fund Overview | The portfolio is constructed using Touchstone's Quality-At-a-Reasonable-Price ('QARP') investment process. QARP is a fundamental bottom-up process, however, it also incorporates a top-down risk management framework designed to successfully manage the portfolio during varying market conditions and economic cycles. The Touchstone Fund is concentrated, typically holding between 15-20 stocks. No individual stock will ever make up more than 10% of the portfolio at any one time. The Investment Manager may temporarily exceed the exposure limits of the Fund occasionally, particularly during periods of market volatility, to allow for holdings in excess of this 10% limit where the increase in value of the underlying security is due to market movement. The Fund may also hold between 0-50% of the portfolio in cash. The Fund has a high level of associated risk, therefore, the minimum suggested investment time-frame is 5 years. |
| Manager Comments | As at the end of October, the Fund held 20 stocks with a median position size of 5%. The portfolio's holdings had an average forward-year price/earnings of 21.6, forward-year tangible ROE of 9.4% and forward-year dividend yield of 2.6%. The Fund ended the month with a cash weighting of 1.1%, down from 3.2% as at the end of September. |
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Performance Report: The Airlie Australian Share Fund
3 Dec 2020 - Australian Fund Monitors
The Airlie Australian Share Fund rose +1.15% in October, taking annualised performance since inception in June 2018 to +4.96% with an annualised volatility of 17.41%. By contrast, the ASX200 Accumulation Index has returned +3.21% p.a. with...
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3 Dec 2020 - 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, Coles Group, CBA, CSL, Macquarie Group, Mineral Resources, Pacific Current Group, Wesfarmers and Westpac Banking Corporation. The top sectors in the portfolio were Financials (27% of the portfolio), Consumer Discretionary (15%), and Health Care (10%) and Industrials (10%). |
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Performance Report: Laureola Investment Fund
3 Dec 2020 - Australian Fund Monitors
The Laureola Investment Fund rose +0.34% in October, taking 12-month performance to +10.14% with a volatility of 1.95% vs the S&P500 Total Return's +9.71% with a volatility of 22.95%. Since inception in May 2013, the Fund has returned...
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3 Dec 2020 - 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 | Recent maturities have left the Fund with cash to invest. The manager purchased 12 new policies at a total discount of 10% to the fair market value in October. At month-end the Fund held over 180 policies, mostly small face and all on insureds with pre-existing conditions. The majority of the policies were purchased through new sourcing channels as Laureola continues to grow both the quantity and quality of sourcing channels to prepare for the future. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
3 Dec 2020 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund has returned +6.59% over the past 12 months with an annualised volatility of 7.44%. Since inception in December 2010, the Fund has returned +4.70% p.a. with an annualised volatility of 4.28%.
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3 Dec 2020 - Performance Report: Gyrostat Absolute Return Income Equity Fund
By: Australian Fund Monitors
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| Fund Overview | The investment objective is to deliver regular and stable income stream (from ASX20 dividends) in a low interest rate environment with capital security - a 'highly-defensive' asset class. Gyrostat has operated for 38 consecutive quarters within a 'hard' pre-defined risk parameter (no more than 3% capital at risk with the Fund's maximum draw-down 2.2% in any circumstances) always in place, delivering regular income by passing through ASX-20 dividends, and meeting returns guidance based upon market conditions (demonstrating increasing returns with market volatility). The Fund buys and holds ASX-20 and international assets with lowest cost protection always in place with upside. It is a conservative asset allocation. Note that Gyrostat have expanded their international assets within the Fund to include SP500, FANGS, Nikkei, Hang Seng, MSCI China, MSCI Developed and Developing markets. Advances in investment risk management enable cost-effective protection to always be in place for a 'hard' defined risk parameter (say no more than 3% capital at risk). Returns are designed to increase as volatility levels increase, as this provides more opportunities to lower protection costs. Investment Objectives: - Returns: 6% - 8% pa in trending markets, greater than 8% pa in volatile markets, BBSW90 + 3% in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.0% p.a.) from dividends and franking credits - Protection: No quarterly NAV draw-downs exceeding 3% Also includes a 'tail hedge' for gains on large market falls. |
| Manager Comments | The Fund returned -0.44% in October. Gyrostat noted the Australian market and large cap stocks traded in a narrow range during the month with no significant market falls. In their latest report, Gyrostat highlight the Fund's strength in achieving significant outperformance on large market falls and rallies, demonstrating its low correlation to the market. Gyrostat anticipate increasing levels of 'late cycle' market volatility with elevated geopolitical risk, historically high debt levels and elevated valuations. |
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