NEWS
Performance Report: Bennelong Kardinia Absolute Return Fund
19 Oct 2020 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +1.32% over the September quarter against the ASX200 Accumulation Index's -0.44%. Since inception in May 2006, the Fund has returned +8.31% p.a. with an annualised volatility of 7.46%.
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19 Oct 2020 - 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 | In September, the Fund returned -5.88%. Key contributors included Boral (+37 basis point contribution), Exore Resources (+20bp), Arden Leisure (+18bp), Aristocrat Leisure (+17bp) and West African Resources (+15bp). Detractors included Zip Co (-112bp), Aumina (-31bp), Harvest Technology (-28bp), Commonwealth Bank (-28bp) and Fortescue Metals (-25bp). While some of the Fund's recent strong performers were weaker during September, particularly in the Financials and Consumer Discretionary sectors, Bennelong continue to expect good returns from these stocks over the medium term. Kardinia reduced the Fund's net market exposure from 74.5% to 37.8% (74.9% long and 37.1% short), with the key changes being an increase in the Fund's short position in Share Price Index Futures. They continue to build the Fund's exposure to stocks that benefit from a re-opening scenario. Kardinia believe good progress is being made on potential vaccines and treatments. They expect Governments will increasingly move towards a 'living with the virus' approach as the economic damage from lockdowns becomes apparent. |
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Performance Report: NWQ Fiduciary Fund
16 Oct 2020 - Australian Fund Monitors
The NWQ Fiduciary Fund rose +0.31% in September, outperforming the ASX200 Accumulation Index by +3.97% and taking 12-month performance to +8.77% vs the Index's -10.21%. Since inception in May 2013, the Fund has returned +5.95% with an...
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16 Oct 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 to significantly outperform in falling markets is highlighted by the following statistics (since inception): Sortino ratio of 1.10 vs the Index's 0.39, maximum drawdown of -8.77% vs the Index's -26.75%, and down-capture ratio of 13.25%. The Fund's returns have been produced with a low net exposure to the market, demonstrating that the Fund's returns are largely independent of the direction of the equity market. NWQ believe the Fund's low net market exposure should also serve investors well in the event of a sustained market selloff. NWQ noted that the return dispersion among constituents of the ASX200 has produced a rich opportunity set for the Fund's long/short managers. |
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Performance Report: Bennelong Australian Equities Fund
16 Oct 2020 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +11.51% over the September quarter, outperforming the ASX200 Accumulation Index by +11.95%. Since inception in February 2009, the Fund has returned +13.70% p.a. vs the Index's +9.01%.
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16 Oct 2020 - 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 up-capture ratio of 141.6% and Sortino ratio of 1.07 vs the Index's 0.63 highlights its capacity to significantly outperform in rising markets while avoiding the market's downside volatility. The Fund returned -1.84% in September, outperforming the Index by +1.82%. As at the end of the month, the Fund's weightings had been increased in the Discretionary, Industrials and Financials sectors, and decreased in the Health Care, IT, Materials, REIT's, Communication and Consumer Staples sectors. |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
15 Oct 2020 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund rose +4.09% in September, outperforming the ASX200 Accumulation Index by +7.75% and ending the September quarter up +9.79% vs the Index's -0.44%. Since inception in July 2013, the Fund has returned...
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15 Oct 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Harvest Lane Asset Management employs a conservative, highly selective and opportunistic approach. Using their extensive knowledge in the area of corporate actions, the Fund's managers assess each opportunity based on a thoughtful, diligent and disciplined process and invest where they believe an opportunity exists to generate above average investment returns relative to the risk incurred. Investment decisions are made without speculating on market direction, with rigid risk controls enforced to minimise the risk of large losses of investor capital. The Fund invests in securities that are predominantly listed on the ASX and occasionally in those listed in other developed markets. Equity swaps and other derivatives may be used at times to reduce risk. The fund typically holds high levels of cash in the absence of sufficiently attractive opportunities to deploy investor capital in accordance with its objectives. |
| Manager Comments | Harvest Lane noted August's lull in corporate activity didn't last long, with positive performance carried through into September. They believe September's performance best exemplifies what can go right with the strategy: numerous positions within the portfolio received higher offers, many of which occurred in positions for which Harvest Lane had a full size holding. Their view is that the market continues to throw risk arbitrage in the too hard basket, guided by sentiment rather than proper assessment, and substantial discount to terms persist in market (particularly so in scrip based transactions). Harvest Lane's outlook is still positive as compelling returns remain on offer. There are several positions carried through into October very close to completion that still trade at a meaningful discount and they expect these to provide a solid platform to continue the recent momentum. |
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Performance Report: Datt Capital Absolute Return Fund
14 Oct 2020 - Australian Fund Monitors
The Datt Capital Absolute Return Fund has returned +36.17% over the past 12 months, outperforming the ASX200 Accumulation Index by +46.38% with up-capture and down-capture ratios of 228.1% and 63.2% respectively, highlighting significant...
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14 Oct 2020 - Performance Report: Datt Capital Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Our investment objectives are: 1) To minimise the risk of permanent capital loss 2) Generate a net return of 10% through the economic cycle An unconstrained, concentrated approach focused on superior risk-adjusted returns. The investment strategy: - targets long-term capital growth in a prudent manner, with an emphasis on capital preservation and low volatility in returns - aims to outperform in markets where equities are down - diversifies investments across asset classes and duration to reduce risk while maintaining relatively concentrated exposure to attractive investment opportunities - is an application of the Manager's investment process, that has no institutional constraints and is completely benchmark unaware |
| Manager Comments | The Fund returned -2.05% in September, outperforming the Index by +1.61%. During the month Datt Capital further trimmed the Fund's exposure to the markets in anticipation of an increase in volatility leading into the US election. Datt noted they are tracking a number of attractive new opportunities and intend on taking advantage of any volatility by increasing the portfolio's exposure at the opportune time. Datt Capital expect a range of upcoming catalysts on the horizon for their core holdings to provide good upside should they be realised, despite the Fund's large cash holding. The Fund ended the month with 23% of the portfolio in CRE debt, 52% in equities and 25% in cash. |
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Fund Review: Bennelong Long Short Equity Fund September 2020
13 Oct 2020 - 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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13 Oct 2020 - Fund Review: Bennelong Long Short Equity Fund September 2020
By: Australian Fund Monitors
AFM Fund Review - September 2020 (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 16-years' track record and an annualised returns of 15.98%.
- 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 0.97 and 1.63 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - September 2020 (pdf format)
Performance Report: Paragon Australian Long Short Fund
12 Oct 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund has risen +22.47% over the past 12 months, outperforming the ASX200 Accumulation Index by +32.68%. Since inception in March 2013, the Fund has returned +11.99% p.a. vs the Index's annualised return of +6.15%.
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12 Oct 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 | The Fund returned -7.4% in what Paragon described as a volatile month globally. Despite this, the Fund delivered +15.23% for the quarter vs the Index's -0.44%. Portfolio protection/hedges fell, with both gold and treasuries down -4.2% and -3.0% respectively. Positive contributors for the Fund were Chalice and West African which were more than offset by declines across the Fund's gold, silver and technology holdings. Paragon view the pullback in gold as merely a correction after a strong run. The Fund ended the month with 27 long positions, 5 short positions and a net exposure of 123%. |
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Performance Report: Bennelong Long Short Equity Fund
9 Oct 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund has risen +36.89% over the past 12 months against the ASX200 Accumulation Index's -10.21%. Since inception in February 2002, the Fund has returned +15.98% p.a. vs the Index's annualised return of +7.34%.
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9 Oct 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 Bennelong Long Short Equity Fund has risen +36.89% over the past 12 months against the ASX200 Accumulation Index's -10.21%. Since inception in February 2002, the Fund has returned +15.98% p.a. vs the Index's annualised return of +7.34%. The Fund's capacity to outperform in falling markets is highlighted by the following statistics (since inception): Sortino ratio of 1.63 vs the Index's 0.35, maximum drawdown of -17.73% 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. The Fund returned -3.26% in September, outperforming the Index by +0.4%. Half of the Fund's pairs made a positive contribution. The top and bottom three pairs made a similar offsetting contribution, with the net contribution slightly negative. Bennelong noted the negative return was a result of a broad spread across 15 negative pairs. It was also spread across sectors with no one sector standing out. The top and bottom pairs for the month were long Netwealth (NWL) / short IOOF (IFL) and long PointsBet (PBH) / short SkyCity (SKC). In their latest report, Bennelong discuss the sell-off in equity markets in September. They highlight that the declines were not isolated to those markets that have risen most since the March lows (namely the US and China), with markets like the UK and France, which have struggled to recover, falling further on fears of a resurgence in COVID-19 infections. They also provide their thoughts on why Australia isn't outperforming given the virus is under control, as well as Australia's relatively strong fiscal position. This is discussed in more detail in the report. |
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Performance Report: Touchstone Index Unaware Fund
2 Oct 2020 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +3.36% in August, outperforming the ASX200 Accumulation Index by +0.53% and taking annualised performance since inception in April 2016 to +6.90% with an annualised volatility of 15.77%.
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2 Oct 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 August, the Fund held 19 stocks with a median position size of 4.7%. The portfolio's holdings had an average forward-year price/earnings of 21.9, forward-year tangible ROE of 14.8% and forward-year dividend yield of 2.6%. The Fund ended the month with a cash weighting of 6.1%, up from 5.5% as at the end of July. |
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Performance Report: Delft Partners Global High Conviction
1 Oct 2020 - Australian Fund Monitors
The Delft Partners Global High Conviction Strategy rose +1.74% in August, taking annualised performance since inception in July 2011 to +14.22% with an annualised volatility of 11.74%.
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1 Oct 2020 - 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 of +3.23% vs the Index's +2.94%. The Fund's Sharpe and Sortino ratios for performance since inception are 1.02 and 1.82 respectively. With respect to the Index's 10 best and worst months since the Strategy's inception, the Strategy has outperform in 7 out of 10 of the Index's worst months and 9 out of 10 of the Index's best months. This highlighted the Strategy's capacity to perform well in both rising and falling markets. |
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