NEWS
17 Jan 2023 - Glenmore Asset Management - Market Commentary
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Market Commentary - November Glenmore Asset Management December 2022 Equity markets globally were stronger in November. In the US, the S&P 500 was up +5.4%, the Nasdaq rose +4.4%, whilst in the UK, the FTSE 100 increased +6.7%, boosted by its heavy mining weighting. On the ASX, the All Ordinaries Accumulation Index rose +6.4%. Utilities were the best performing sector, boosted by the takeover bid for index heavyweight Origin Energy, which was up +41% in the month. Materials was the next best sector, driven by investor optimism around China loosening its covid lockdown measures. Telco's, financials and technology all underperformed in the month. Bond yields declined in November as investors started to become more positive that the pace of interest rate hikes from central banks will moderate along with some signs that inflation has potentially peaked. In the US, the 10 year bond yield fell -30 basis points (bp) to close at 3.74%, whilst in Australia, the 10 year rate fell -23bp to 3.53%. During the month, the RBA increased interest rates by 25bp for the seventh month in a row, taking the official cash rate to 2.85%. The A$/US$ rallied in the month, up +6.0% to close at US$0.68. Commodity prices were broadly higher. Nickel rose +23%, whilst copper, aluminium and lead also rose between +6-8%. Thermal coal rebounded +11.4% after an -18% decline in October. Also of note, iron ore was up +25.6% after falling for seven months in a row. Brent crude oil fell -10.0%. Funds operated by this manager: |
16 Jan 2023 - New Funds on Fundmonitors.com
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New Funds on FundMonitors.com |
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Below are some of the funds we've recently added to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research, platform availability, and news & insights. |
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Emit Capital Climate Finance Equity Fund |
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16 Jan 2023 - The Investment Outlook 2023
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The Investment Outlook 2023 abrdn December 2022 As we look back on 2022, to describe the year as eventful seems an absurd understatement. So many events have dominated the news, each individually significant, and in aggregate almost overwhelming in consequence, both politically and economically. Here's a reminder of just a few of those events:
Climate crisis uncertaintyYet all these things will be relatively short-lived in their impact (and manageable) when compared to the existential threat that continues to grow relatively unabated from our failure to make progress on constraining global warming to the agreed target of 1.5°C. COP 27, the climate change conference held this year in Egypt, largely failed to expand on commitments made a year earlier with regards to phasing out fossil fuels, despite all the strong statements made around the necessity to do so. The one major step forward was the agreement of a deal that has been sought for over 30 years to launch a fund for 'loss and damage' to support those nations most exposed to the consequences of climate change. But details and financial funding have not been agreed. We can already observe more extreme weather events - notably the recent floods in Pakistan - which have devastating effects on impacted economies and contribute to the risk of a steady but dramatically expanded flow of migrants to other countries. Don't give upBut, as the old saying goes, where there are challenges, there are also opportunities. Here's where we see them:
Reasons to be optimisticIt's easy to be overwhelmed by all the uncertainty. That said, we've also seen steady progress in many places that may offer an antidote to the gloom:
2023 may well be a pivotal year for markets amid the economic challenges that remain. While these are clearly important, we mustn't take our eyes off potentially existential long-term issues. Author: Sir Douglas Flint, Chairman of abrdn |
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Funds operated by this manager: Aberdeen Standard Actively Hedged International Equities Fund, Aberdeen Standard Asian Opportunities Fund, Aberdeen Standard Australian Small Companies Fund, Aberdeen Standard Emerging Opportunities Fund, Aberdeen Standard Ex-20 Australian Equities Fund (Class A), Aberdeen Standard Focused Sustainable Australian Equity Fund, Aberdeen Standard Fully Hedged International Equities Fund, Aberdeen Standard Global Absolute Return Strategies Fund, Aberdeen Standard Global Corporate Bond Fund, Aberdeen Standard International Equity Fund , Aberdeen Standard Life Absolute Return Global Bond Strategies Fund, Aberdeen Standard Multi Asset Real Return Fund, Aberdeen Standard Multi-Asset Income Fund |
22 Dec 2022 - Hedge Clippings |22 December 2022
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Hedge Clippings | Friday, 22 December 2022 For our final Hedge Clippings of the year, we thought we'd look back 12 months for some inspiration, namely from the last edition of 2021, when we noted that the "certainty of uncertainty persists, along with the realisation that COVID will be with us for some time." One year on, and COVID's certainly still with us, although like many things, it seems we're learning to live with it. Elsewhere our prediction of more uncertainty proved 100% correct, with the war in Ukraine sparking inflation, and in turn unexpected rate rises, and thus the inevitable collapse of the era of easy money, and with it the tech boom. We haven't heard a report of Charlie Munger's response to the rout in Bitcoin and the crypto-sphere, but we're sure it would actually be predictable. In hindsight (easy-peasy) Scomo's demise was obvious, although the Teals' success caught most (even themselves) by surprise. We're not sure if Albo's victory caught anyone by surprise, but his smooth transition and avoidance of political potholes was welcome. Maybe the uncertainties in that regard are waiting in next May's (real) budget. Less predictable in 2022 was Elon Musk's acquisition of Twitter (surely a thought bubble?) followed by his equally unpredictable self-firing, the seeming disintegration of the government in the UK, the boredom of Netflix's $100m Ginge and Whinge show, China's COVID lockdown, and the fact that the ASX was one of the better performing (albeit negative) global markets. Looking forward to 2023: The R word is likely to dominate as recession either looms (or deepens depending on location) as inflation stays stronger for longer, and interest rates follow suit - even if the pace of rate rises eases, they're unlikely to start falling until 2024. Sadly there seems no quick end in sight to the war in Ukraine unless Russian mothers tire of seeing their sons return injured - or worse as the case may be. Penny Wong has started the reconciliation process with China, and once a suitable period has passed to allow sufficient face-saving (or should that be a sufficient period to allow suitable face-saving?) we suspect normality will resume, whatever normality means. Lachlan Murdoch is intent on continuing to rescue the reputation of his, and we presume the Murdoch family's, name from the "serious harm" inflicted by Crikey, which of course leads us to the Trump saga. Will it ever end? No doubt the lawyers hope not. More immediately, Hedge Clippings is looking forward to a short break and recharging the batteries before starting all over again next year. We'll be back in the latter half of January. Meanwhile, from all the team at FundMonitors.com we would like to take this opportunity to wish you and your loved ones a Happy Christmas, and a Healthy and Prosperous New Year! |
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News & Insights New Funds on FundMonitors.com Trip Insights: United States | 4D Infrastructure Investment Perspectives: The yield curve, recessions and soft landings | Quay Global Investors November 2022 Performance News Insync Global Capital Aware Fund Bennelong Long Short Equity Fund Glenmore Australian Equities Fund Bennelong Kardinia Absolute Return Fund Digital Asset Fund (Digital Opportunities Class) |
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22 Dec 2022 - Performance Report: Equitable Investors Dragonfly Fund
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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 | Equitable Investors noted the workload in 2022 included driving existing investments to ensure they have capital and appropriate cost structures, pushing for organisational changes, and corporate or strategic transactions - as well as sorting out which capital-needy companies are real opportunities under Equitable's 'Recap' theme. They remain fully committed and continue to look at ways to work harder and smarter to achieve the returns they seek in time. Equitable expect to continue to keep their noses to the grindstone in early CY2023 as they position the Fund to capitalise on the opportunities a torrid 2022 has created. They added that their 'FIT' universe of micro-to-midcap industrials is down a third in 2022 and there is currently a huge spread in median earnings multiples between small and large stocks. |
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22 Dec 2022 - Performance Report: Digital Asset Fund (Digital Opportunities Class)
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| Fund Overview | The Fund offers a choice of three investment classes, each of which adopts a different investment strategy: - The Digital Opportunities Class identifies and trades low risk arbitrage opportunities between different exchanges and a number of digital assets; - The Digital Index Class tracks the performance of a basket of digital assets; - The Bitcoin Index Class tracks the performance of Bitcoin. Digital Opportunities Class: This class appeals to investors seeking an active exposure to the digital asset markets with no directional bias. The Digital Opportunities Class employs a high frequency inspired Market Neutral strategy trading 24/7 which uses a systematic approach designed to offer uncorrelated returns to the underlying highly volatile cryptocurrency markets. The strategy systematically exploits low-risk arbitrage opportunities across the most liquid and active digital asset markets on the most respected exchanges. When appropriate the Fund may obtain leverage, including through borrowing cash, securities and other instruments, and entering into derivative transactions and repurchase agreements. DAFM has a currency hedging policy in place for the Units in the Fund. Units in the Fund will be hedged against exposure to assets denominated in US dollars through a trading account with spot, forwards and options as directed by DAFM. |
| Manager Comments | The Digital Asset Fund (Digital Opportunities Class) has a track record of 1 year and 7 months and therefore comparison over all market conditions and against its peers is limited. However, the fund has outperformed the S&P Cryptocurrency Broad Digital Market benchmark since inception in May 2021, providing investors with an annualised return of 32.49% compared with the benchmark's return of -49.25% over the same period. Over the past 12 months, the fund's largest drawdown was -1.96% vs the index's -64.92%, and since inception in May 2021 the fund's largest drawdown was -1.96% vs the index's maximum drawdown over the same period of -71.98%. The fund's maximum drawdown began in November 2022 and has so far lasted , reaching its lowest point during November 2022. During this period, the index's maximum drawdown was -71.61%. The Manager has delivered these returns with 50.39% less volatility than the benchmark, contributing to a Sharpe ratio for performance over the past 12 months of 1.02 and for performance since inception of 1.38. The fund has provided positive monthly returns 100% of the time in rising markets and 91% of the time during periods of market decline, contributing to an up-capture ratio since inception of 5% and a down-capture ratio of -43%. |
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22 Dec 2022 - Performance Report: Bennelong Kardinia Absolute Return Fund
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| Fund Overview | There is a slight bias to large cap stocks on the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. 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. |
| Manager Comments | The Bennelong Kardinia Absolute Return Fund has a track record of 16 years and 7 months and has outperformed the ASX 200 Total Return benchmark since inception in May 2006, providing investors with an annualised return of 7.89% compared with the benchmark's return of 6.44% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 2 occasions in the 16 years and 7 months since its inception. Over the past 12 months, the fund's largest drawdown was -10.52% vs the index's -11.9%, and since inception in May 2006 the fund's largest drawdown was -11.71% vs the index's maximum drawdown over the same period of -47.19%. The fund's maximum drawdown began in June 2018 and lasted 2 years and 6 months, reaching its lowest point during December 2018. The fund had completely recovered its losses by December 2020. During this period, the index's maximum drawdown was -26.75%. The Manager has delivered these returns with 6.76% less volatility than the benchmark, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.67 since inception. The fund has provided positive monthly returns 87% of the time in rising markets and 33% of the time during periods of market decline, contributing to an up-capture ratio since inception of 14% and a down-capture ratio of 53%. |
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22 Dec 2022 - Investment Perspectives: The yield curve, recessions and soft landings
22 Dec 2022 - Why the cloud investment opportunity will outlast an economic downturn
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Why the cloud investment opportunity will outlast an economic downturn Magellan Asset Management November 2022 |
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The global shift to cloud computing is a seismic and transformational trend that we have backed for several years at Magellan. For the hyperscale public cloud vendors outside China - Amazon, Microsoft, and Google (the Magellan Global Fund holds all three companies) - it has created unprecedented market opportunity. These vendors have consistently generated strong double-digit revenue growth at scale and continue to do so to this day. Yet in the most recent two financial quarters, hyperscale cloud revenue has faced decelerating growth as enterprise customers reign in spend amid the uncertain macroeconomic backdrop. Has the story come to an end?
The trend this year is apparent. Excluding the impact of currency movements, hyperscale cloud revenue grew in aggregate 42% year-over-year in Q1. In Q2, the growth rate fell to 38%, and in the most recent Q3, the growth fell further to 34%. The two largest vendors, Amazon and Microsoft, expect this deceleration to continue, which means we should expect the growth rate to decline even more in Q4. On top of that, margins are falling, with both companies dealing with rising energy costs in their data centres while continuing to maintain their pace of double-digit operating expense growth. All of this may seem dire but let us unpack it further. We start by recognising that the deceleration this year appears more severe because it is being compared to several quarters of strong growth in 2021 due to cloud demand created by the pandemic responses. To try to adjust for this by looking at this year's quarterly growth rates on a 2-year annualised basis, we see a steadier growth trend, albeit one that is still slowing - from 40% in Q1, to 39% in Q2, to 38% in Q3. (The fact that we are seeing this type of growth on an aggregate US$160 billion in annualised revenue is staggering on its own). These decreases are more marginal and subject to noise, but there is broader evidence that IT spend is generally tightening. The unfavourability of these recent IT spending trends are, we believe, cyclical not structural. Market uncertainty has compelled enterprise customers to become more prudent or selective about their IT investments. Some customers are in industries facing challenges of their own such as supply chain issues, inflation, or labour shortages. We also expect some spend was driven by the period of excessive cheap, available money and this spend will not return. And as their customers seek to tighten their belts, hyperscale cloud vendors are taking it a step further and in fact helping customers to improve the efficiency of their spend (e.g., through lower priced options). In other words, the cloud vendors are effectively contributing to their own growth headwinds. Why do this? It is about driving trusted partnerships with customers for long term growth, rather than short-sightedly focusing on maximising growth today. This makes sense if one believes, as we do, that cloud has a significant multi-year growth runway ahead. In fact, the ability for customers to proactively dial up and down cloud spend according to their needs - rather than being burdened with the large, fixed costs of an on-premises data centre when times are tough - is one of the fundamental value propositions of the cloud, and the current environment reinforces this validity. Put another way, hyperscale cloud is doing exactly what it was meant to do. The effect of rising energy costs on the hyperscale cloud vendors has been negative but comparably modest so far. Amazon cited a 200bps impact to AWS margins in aggregate over two years, and for Microsoft we expect an impact of less than 100bps to its cloud margins this financial year, unless costs rise significantly higher. The cloud vendors are absorbing these higher costs in the near term, but we believe they possess the pricing power to share rising costs with customers over the longer term. An underappreciated point is that the energy efficiency of hyperscale data centres is far superior to what customers can achieve on their own, which is further demonstrating to these customers the advantages of being in the cloud. Cloud computing is proving its value to customers as much in this environment as it ever has, and we can see this when we delve beyond the quarterly headlines. It is why we continue to view this investment opportunity as compelling on the longer time horizon. It is an attractive, enduring, and multi-year opportunity that will deliver robust growth and attractive margins on the other side of the economic cycle we find ourselves in today. Author: Adrian Lu, Investment Analyst Sources: Company filings and Magellan estimates |
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Funds operated by this manager: Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged), MFG Core Infrastructure Fund Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 ('Magellan') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should read and consider any relevant offer documentation applicable to any investment product or service and consider obtaining professional investment advice tailored to your specific circumstances before making any investment decision. A copy of the relevant PDS relating to a Magellan financial product or service may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any strategy, the amount or timing of any return from it, that asset allocations will be met, that it will be able to be implemented and its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan. |
21 Dec 2022 - Performance Report: Insync Global Quality Equity Fund
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| Fund Overview | Insync invests in a concentrated portfolio of high quality companies that possess long 'runways' of future growth benefitting from Megatrends. Megatrends are multiyear structural and disruptive changes that transform the way we live our daily lives and result from a convergence of different underlying trends including innovation, politics, demographics, social attitudes and lifestyles. They provide important tailwinds to individual stocks and sectors, that reside within them. Insync believe this delivers exponential earnings growth ahead of market expectations. Insync screens the universe of 40,000 listed global companies to just 150 that it views as superior. This includes profitability, balance sheet performance, shareholder focus and valuations. 20-40 companies are then chosen for the portfolio. These reflect the best outcomes from further analysis using a proprietary DCF valuation, implied growth modelling, and free cash flow yield; alongside management, competitor, and industry scrutiny. The Fund may hold some cash (maximum of 5%), derivatives, currency contracts for hedging purposes, and American and/or Global Depository Receipts. It is however, for all intents and purposes, a 'long-only' fund, remaining fully invested irrespective of market cycles. |
| Manager Comments | The Insync Global Quality Equity Fund has a track record of 13 years and 2 months and has outperformed the Global Equity benchmark since inception in October 2009, providing investors with an annualised return of 11.8% compared with the benchmark's return of 10.68% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 13 years and 2 months since its inception. Over the past 12 months, the fund's largest drawdown was -28.54% vs the index's -15.77%, and since inception in October 2009 the fund's largest drawdown was -28.54% vs the index's maximum drawdown over the same period of -15.77%. The fund's maximum drawdown began in January 2022 and has so far lasted 10 months, reaching its lowest point during September 2022. The Manager has delivered these returns with 1.6% more volatility than the benchmark, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.82 since inception. The fund has provided positive monthly returns 82% of the time in rising markets and 19% of the time during periods of market decline, contributing to an up-capture ratio since inception of 86% and a down-capture ratio of 89%. |
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