NEWS
23 Nov 2022 - 4D inflation podcast (part 2): The US Inflation Reduction Act
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4D inflation podcast (part 2): The US Inflation Reduction Act 4D Infrastructure November 2022 In part 2, Peter Aquilina (4D's Head of ESG and Senior Investment Analyst) speaks with Dave Whitby (Bennelong Account Director) about how the US' new Inflation Reduction Act is really about transitioning the US to a decarbonised, clean/renewable energy economy.
Speakers: Peter Aquilina, Head of ESG and Senior Investment Analyst |
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Funds operated by this manager: 4D Global Infrastructure Fund, 4D Emerging Markets Infrastructure FundThe content contained in this audio represents the opinions of the speakers. The speakers may hold either long or short positions in securities of various companies discussed in the audio. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely as an avenue for the speakers to express their personal views on investing and for the entertainment of the listener. |
22 Nov 2022 - Performance Report: Bennelong Concentrated Australian Equities Fund
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| Manager Comments | The Bennelong Concentrated Australian Equities Fund has a track record of 13 years and 9 months and has outperformed the ASX 200 Total Return Index since inception in February 2009, providing investors with an annualised return of 13.59% compared with the index's return of 9.53% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 2 occasions in the 13 years and 9 months since its inception. Over the past 12 months, the fund's largest drawdown was -31.81% vs the index's -11.9%, and since inception in February 2009 the fund's largest drawdown was -31.81% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in December 2021 and has so far lasted 10 months, reaching its lowest point during September 2022. During this period, the index's maximum drawdown was -11.9%. The Manager has delivered these returns with 2% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.76 since inception. The fund has provided positive monthly returns 90% of the time in rising markets and 18% of the time during periods of market decline, contributing to an up-capture ratio since inception of 137% and a down-capture ratio of 97%. |
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22 Nov 2022 - Australian Secure Capital Fund - Market Update
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Australian Secure Capital Fund - Market Update October Australian Secure Capital Fund November 2022
National property prices have fallen for the sixth consecutive month, with values declining a further 1.2% in October. Whilst the price correction continues, there is some signs of easing within the capital cities, with the rate of decline slowing following falls of 1.6% (August) and 1.4% (September), reducing to a 1.1% decline in October. Queensland capital cities recorded the most significant monthly change with the Home Value Index recording a 2% reduction. New South Wales, Tasmania and Canberra experienced further declines of 1.3%, 1.1% and 1% respectively. Smaller falls of 0.8% for Victoria and the Northern Territory, with South Australia and Western Australia experiencing the smallest reductions of 0.3% and 0.2% respectively.
Despite the continued reduction in house prices, at the combined capital city level, housing values have fallen just 6.5% following a 25.5% increase through the upswing, with Sydney recording the largest falls of 10.2% since the January peak (after a 27.7% rise), and Melbourne down 6.4% since February (after a 17.3% rise). Interestingly, unit prices have held value better throughout the downturn (down 4.2%), likely driven by surges in rental returns, as well as experiencing smaller growth during the upswing. Supply remains lower than previous years, with the number of newly listed capital city dwellings in October down 25.2% from 2021, and almost 19% below that of the previous five-year average. This lack of supply is likely to contain the price falls to an extent, as there has not been any significant upswing in panicked selling or forced sales. The last weekend of October saw a total of 1,908 auctions take place across the capital cities, well below the 3,546 on the same weekend in 2021. Clearance rates also remain lower than last year, with the weighted average clearance rate across the capital cities at 59.8% (down from 76.8% in 2021) in the last weekend of October. Similar to last month, clearance rates in Adelaide were the highest of the weekend, with a clearance rate of 68.2%, followed by Sydney (62.3%), Melbourne (60.7%), Canberra (59.8%), Brisbane (45.7%) and Perth (38.5%). Whilst it is too early to determine if the worst of the decline phase is over, the RBA's decision to raise the cash rate by a further 0.25% instead of 0.5% for the second straight month, despite the high inflation reading for the September quarter, indicates they do expect inflation to start moderating.
Funds operated by this manager: ASCF High Yield Fund, ASCF Premium Capital Fund, ASCF Select Income Fund |
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21 Nov 2022 - Performance Report: Bennelong Australian Equities Fund
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| Manager Comments | The Bennelong Australian Equities Fund has a track record of 13 years and 9 months and has outperformed the ASX 200 Total Return Index since inception in February 2009, providing investors with an annualised return of 11.95% compared with the index's return of 9.53% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 13 years and 9 months since its inception. Over the past 12 months, the fund's largest drawdown was -30.31% vs the index's -11.9%, and since inception in February 2009 the fund's largest drawdown was -30.31% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in December 2021 and has so far lasted 10 months, reaching its lowest point during September 2022. During this period, the index's maximum drawdown was -11.9%. The Manager has delivered these returns with 1.53% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.68 since inception. The fund has provided positive monthly returns 90% of the time in rising markets and 17% of the time during periods of market decline, contributing to an up-capture ratio since inception of 128% and a down-capture ratio of 99%. |
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21 Nov 2022 - The Rate Debate: Storm clouds continue to gather in global markets
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The Rate Debate - Episode 33 Storm clouds continue to gather in global markets Yarra Capital Management November 2022 The RBA hiked rates for the seventh consecutive month as it seeks to stifle inflation. Global central banks continue aggressive monetary tightening despite early signs of moderating inflation and weaker forward growth indicators. With the consumer bearing the brunt of high inflation and tighter financial conditions, the RBA has backed away from aggressive rate hikes for now. Will other central banks follow, or is this a temporary reprieve? Speakers: |
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Funds operated by this manager: Yarra Australian Equities Fund, Yarra Emerging Leaders Fund, Yarra Enhanced Income Fund, Yarra Income Plus Fund |
18 Nov 2022 - Hedge Clippings |18 November 2022
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Hedge Clippings | Friday, 18 November 2022 As we glide, slide or stagger towards the last few weeks of what will go down as a pretty forgettable year (unless you are Anthony Albanese who continues his dream start as PM) it is worth considering that thanks to a recent rally, the Australian equity market has performed well against its US equivalent. Australian managed funds - although as a whole positive in October - have found it a difficult year as well, with the average equity based fund on the FundMonitors.com data base down 11.31% over 12 months to the end of October, vs. a fall of just 2.01% for the ASX200 total return index. Over the same 12 months (based on 88% of the results to date) only 16% of equity funds managed to outperform the ASX 200, which will no doubt be taken as welcome news by the fans of index or passive funds. However, we believe that misses the point - namely that just as the performance of individual stocks within the index varies, so too will the performance of managed funds. The key, depending on one's strategy or objective, is to select the outperformers. For instance, over 12 months the performance of the Top 10 funds has ranged from 19.8% through to 43.7%, while over 3 years the range has been 17.97% to 44.67% per annum. Over 5 years the number drops, but the best performing fund - Glenmore Australian Equities - returned 19% pa. followed by Regal's Small Companies Fund at 18.25% and with Bennelong's Emerging Companies Fund in third place at 17.41%. Consistency is not always easy to achieve: Of the Top 10 funds over 5 years, only 5 funds were positive over 1, 2, 3 and 4 years as well (Glenmore, Samuel Terry, Regal Amazon, GQC Global, and Australian Eagle's Long Short Fund) which probably underlines how difficult 2022 has been, particularly in the small cap space. Added to the variability of returns has been the rise - and fall - of crypto funds, which took out 3 of the Top 10 spots over 2 and 3 years, but to the surprise of no one, take out 5 places among the 10 worst performing funds over 1 year. When it comes to investing in managed funds, success is a combination of careful research and diversification. |
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Magellan Global Strategy Update | Magellan Asset Management Drawdowns and small stocks for God-like performance | Equitable Investors October 2022 Performance News Bennelong Australian Equities Fund Delft Partners Global High Conviction Strategy Insync Global Capital Aware Fund |
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18 Nov 2022 - Get ready for a glass shortage - unexpected effects of the energy crisis
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Get ready for a glass shortage - unexpected effects of the energy crisis abrdn October 2022 Plastic wine bottles, jam jars and long waiting lists for luxury glass items may all become part of daily life as a result of the energy crisis. Glass manufacturers are heavy energy users, so have been hard pressed by the rapidly escalating costs of oil and gas. They are currently having to put up the prices of their products by around 35%, although this may rise further. The concern is that passing this cost on to the consumer means prices will increase in a way that makes glass packaging, especially for food and drink, too expensive. Consumers will demand cheaper alternative packaging. Glass half emptyAlready, the luxury end of the glass market is bracing itself for much higher energy costs. Many of the Venetian glass workshops on the Italian island of Murano have already closed their doors because the cost of energy has made their decorative items too expensive. Customers looking to buy Venetian vases and fine crystal glasses could face extensive waiting lists this winter. The world-famous manufacturer of Riedel glass in Austria and Germany is also contemplating a shutdown. That's because furnaces can break if they cool, so pausing during periods when gas is rationed is not an option. Glass half fullNonetheless, glass is completely recyclable, so remains one of the greenest choices for storing food and drink. Given the challenges, we are seeing some surprising effects of the energy crisis as companies strive to develop innovative solutions and better opportunities. Virdrala is one of the leading glass container manufacturers in Western Europe, operating in Spain, Portugal, Italy, the UK and Ireland. It produces a full range of glass containers, selling eight billion per year. Of its products, 35% are for wine, 26% are for beer, and the balance is split between food, spirits and soft drinks. Adapting to the challenges, Vidrala is increasing its focus on glass recycling - in 2021, 48% of the glass it produced was recycled. It's also raised the collection rate of used glass to improve both manufacturing efficiency and earnings. Currently, the company is cooperating with a non-governmental organisation, which encourages people to recycle, collects the glass and delivers it to Vidrala for melting and recycling. Looking to the longer term, Vidrala is working together with other companies from the glass industry to investigate hybrid hydrogen furnaces that could power the industry in the future. Glass manufacturers are also exploring innovations such as reducing the melting temperature of glass by adding ash, allowing a more 'imperfect'-looking glass with less clarity and more bubbles, plus increasing the use of wind and solar energy at factories. What about the future?There's no doubt that the energy crisis will bring all kinds of innovative new solutions. Could we see milkman-style deliveries of wine in reusable bottles? Or more food and drink in aluminium cans? Will much more food move to recyclable plastic packaging or paper-based packaging? Dutch company Corbion is at the forefront of innovative packaging solutions. It produces PLA, a bio-based and biodegradable plastic packaging, made from renewable resources. PLA is strong enough to replace conventional plastics. And, once used, it can be composted, breaking down into CO2, water and biomass. To tackle the many challenges ahead, innovative thinking is needed alongside a more sustainable and, where possible, more traditional way of doing things. Inspired by the humble soap bar, shampoo is now available in solid bars, packaging free. Could the future see us taking our bottles to local shops and supermarkets for wine and oil refills, as is the norm in many parts of Southern Europe? What does all this mean for investors?As a society, we need to reduce our dependence on fossil-fuel energy. The current shortage could be the pressure we need to make dramatic changes. Meanwhile, many of the glass companies affected by the energy crisis are small caps. Due to their size, they are nimbler than their larger peers, putting them in pole position to both adapt quickly and create alternative solutions. So, challenging times can create opportunities for well-managed, innovative companies. Such businesses also create potential opportunities for diligent investors. Maybe it's time to raise a glass after all? Author: Tzoulianna Leventi, Investment and ESG Analyst |
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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
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17 Nov 2022 - Performance Report: Delft Partners Global High Conviction Strategy
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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 Delft Partners Global High Conviction Strategy has a track record of 11 years and 3 months and has outperformed the Global Equity Index since inception in August 2011, providing investors with an annualised return of 14.45% compared with the index's return of 12.63% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 2 occasions in the 11 years and 3 months since its inception. Over the past 12 months, the fund's largest drawdown was -9.85% vs the index's -15.77%, and since inception in August 2011 the fund's largest drawdown was -13.33% vs the index's maximum drawdown over the same period of -15.77%. The fund's maximum drawdown began in February 2020 and lasted 1 year, reaching its lowest point during July 2020. The fund had completely recovered its losses by February 2021. During this period, the index's maximum drawdown was -13.19%. The Manager has delivered these returns with 1.18% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past five years and which currently sits at 1.06 since inception. The fund has provided positive monthly returns 88% of the time in rising markets and 14% of the time during periods of market decline, contributing to an up-capture ratio since inception of 99% and a down-capture ratio of 90%. |
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17 Nov 2022 - Sustainable investing: Five steps to avoid greenwashing
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Sustainable investing: Five steps to avoid greenwashing Pendal October 2022 |
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AS DEMAND for sustainable investing grows, Australians are becoming more attuned to the threat of "greenwashing". What is greenwashing? Australian investments regulator ASIC defines it as "the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical". The value of Australian assets managed using a "rigorous, leading approach to responsible investment" passed $1.5 trillion last year — 43% of the total market, the Responsible Investment Association Australasia reported earlier in the month of October. RIAA last year certified 225 products in Australia and New Zealand, representing $74 billion of assets under management — up $18 billion in a single year. (Pendal is named by RIAA as one of 74 responsible investment leaders in Australia.) But not all investment managers are as green as they may seem. So what steps can you take to avoid greenwashing? "It can be a real challenge to spot whether a product you've invested in is truly green versus one that's just claiming to be green," says Pendal senior risk and compliance manager Diana Zhou. In June, Australian Securities and Investments Commission published guidelines to help product issuers self-evaluate their sustainability-related products. But investors can still find it problematic separating financial products that are sustainable from the ones that just say they are. Elise McKay, an investment analyst with Pendal's Australian equities team, says there are broad global questions on what exactly represents best practice in ESG. Right now European regulators are leading the way with explicit regulations on disclosures, reporting and metrics. "My view is that ultimately Australia will head down a similar path towards greater regulation — but we are not there yet. "From an investor perspective, people are selecting these funds because they have an ethical desire to invest aligned with their beliefs. "Product issuers have an obligation to be 'true to label' and deliver them the solution they are after." How can investors be sure that the products they are investing in are delivering what they promise? McKay and Zhou offer these five steps for investors and advisers to avoid falling victim to greenwashing: 1. Dig deeper than the glossy marketing materialInvestment opportunities often come with glossy brochures, but behind the marketing material is a product disclosure statement (PDS), usually available on the product issuer's website. Zhou says "the PDS, by law, must disclose the extent to which ESG practices are taken into account in selecting, retaining or realising an investment. "Investors should read the offer documents (PDS and Additional Information Booklet) in detail rather than relying only on marketing. These documents should provide details on a manager's ESG practices. "A PDS needs to be submitted to ASIC and needs to comply with certain rules in the Corporations Act — so there is regulatory oversight." 2. Check up on a product issuer's governanceCompanies with strong governance frameworks are more likely to be in compliance with rules and regulations, says Zhou. "You're looking for a dedicated responsible investment page on the an issuer's website. "There will usually be policies and statements about responsible investing, climate change, human rights, modern slavery and stewardship. " "The proxy voting process is important for transparency. There should be a record of how the manager voted at the annual meetings of its portfolio companies. Investors should be able to see which resolutions were voted on and which way the investor voted. "Investors can also look at whether the manager is a signatory to the Principles for Responsible Investment (PRI) which gives an indication of the level of commitment a manager has on implementing its responsible investing strategies" 3. Understand how sustainability is integrated into the investment frameworkThere are a number of ways a manager can integrate ESG factors into the investment process - but some are more effective than others, says McKay. Some managers may simply screen out investments while others conduct detailed benchmarking of a portfolio company's ESG targets. "Look for detailed benchmarking on areas like climate change, diversity, biodiversity and natural resources, the circular economy and so on to identify who are really leading sustainability and ESG targets." 4. Look for evidence of stewardship activity.A fund manager that genuinely cares about making a difference will be actively engaged with portfolio companies. This goes beyond proxy voting, says McKay. "Spend time understanding what stewardship activities are done — what are the areas that a manager is working on with companies." You can read more here about what to expect from a modern investment manager's engagement activities. 5. Spend time with the investment teamFinally, and potentially most importantly, McKay urges investors to get to know their fund managers and get into a direct discussion with them to go behind the written word. "Go and talk to the fund manager — get them to explain the framework to you," says McKay. "Go beyond disclosure and get into a discussion to find out if they are really doing what they say they are doing." Author: Diana Zho, Senior Risk and Compliance Manager |
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Funds operated by this manager: Pendal Focus Australian Share Fund, Pendal Global Select Fund - Class R, Pendal Horizon Sustainable Australian Share Fund, Pendal MicroCap Opportunities Fund, Pendal Sustainable Australian Fixed Interest Fund - Class R, Regnan Global Equity Impact Solutions Fund - Class R, Regnan Credit Impact Trust Fund |
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This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at December 8, 2021. PFSL is the responsible entity and issuer of units in the Pendal Multi-Asset Target Return Fund (Fund) ARSN: 623 987 968. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient's personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com |
16 Nov 2022 - Performance Report: L1 Capital Long Short Fund (Monthly Class)
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| Manager Comments | The L1 Capital Long Short Fund (Monthly Class) has a track record of 8 years and 2 months and has outperformed the ASX 200 Total Return Index since inception in September 2014, providing investors with an annualised return of 19.73% compared with the index's return of 6.78% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 8 years and 2 months since its inception. Over the past 12 months, the fund's largest drawdown was -19.5% vs the index's -11.9%, and since inception in September 2014 the fund's largest drawdown was -39.11% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in February 2018 and lasted 2 years and 9 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by November 2020. The Manager has delivered these returns with 6.53% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past five years and which currently sits at 0.91 since inception. The fund has provided positive monthly returns 79% of the time in rising markets and 62% of the time during periods of market decline, contributing to an up-capture ratio since inception of 86% and a down-capture ratio of 27%. |
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