NEWS
Performance Report: Bennelong Concentrated Australian Equities Fund
20 Dec 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund returned +6.28% in November, outperforming the ASX200 Accumulation Index by +3.00% and taking 12-month performance to +28.01% versus the Index's +25.98%.
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20 Dec 2019 - Performance Report: Bennelong Concentrated Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The overriding objective of the Concentrated Australian Equities Fund is to seek investment opportunities which are under-appreciated and have the potential to deliver positive earnings, while satisfying our stringent quality criteria. Bennelong's investment process combines bottom-up fundamental analysis together with proprietary investment tools which are used to build and maintain high quality portfolios that are risk aware. The portfolio typically consists of 20-35 high-conviction stocks from the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to ASX-listed securities. Derivative instruments are mainly used to replicate underlying positions and hedge market and company specific risks. |
| Manager Comments | As at the end of the month, the Fund's weightings had been increased in the Discretionary, Health Care, Consumer Staples and Materials sectors, and decreased in the Industrials, IT, Communication, REIT's and Financials sectors. The Fund's top holdings at the end of the month included CSL, BHP Billiton and James Hardy Industries PLC. The Fund aims to invest in a concentrated portfolio of high quality companies with strong growth outlooks, underestimated earnings momentum and underestimated prospects. By comparison with the ASX300 Accumulation Index, the portfolio's holdings, on average, have a higher return on equity, lower debt/equity, higher sales growth, higher EPS growth, higher price/earnings and lower dividend yield which collectively indicate that the Fund is in line with its investment objectives. |
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Performance Report: NWQ Global Markets Fund
20 Dec 2019 - Australian Fund Monitors
The NWQ Global Markets Fund rose +4.75% in November, outperforming the ASX 200 Accumulation Index by +1.47%. Since inception in September 2018 the Fund has returned +4.14% p.a. with an annualised volatility of 9.43%.
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20 Dec 2019 - Performance Report: NWQ Global Markets Fund
By: Australian Fund Monitors
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| Fund Overview | This is achieved through active allocations to a select number of liquid alternative managers that employ a variety of strategies. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record. |
| Manager Comments | The Fund performed well given the low volatility environment throughout the month, profiting from relative value trades in the US and European equities as well as from high-frequency systematic trading across Asian equity markets. The Fund's currency and commodity positions were also profitable while there were modest losses from the Fund's fixed income positions. The Fund is a 'long volatility' strategy and higher levels of market volatility than those seen in recent months assist in delivering persistent outperformance over time. However, NWQ noted, the diversity of the underlying managers along the dimensions of strategy, trading approach and trading horizon means that the Fund has the potential to generate returns irrespective of market regime. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
19 Dec 2019 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +3.82% in November, outperforming the ASX200 Accumulation Index +0.54% and taking annualised performance since inception in November 2009 to +10.92% versus the Index's +8.61%.
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19 Dec 2019 - Performance Report: Bennelong Twenty20 Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed as one portfolio but comprises and combines two separately managed exposures: 1. An investment in the top 20 stocks of the markets, which the Fund achieves by taking an indexed position in the S&P/ASX 20 Index; and 2. An investment in the stocks beyond the S&P/ASX 20 Index. This exposure is managed on an active basis using a fundamental core approach. The Fund may also invest in securities expected to be listed on the ASX, securities listed or expected to be listed on other exchanges where such securities relate to ASX-listed securities.Derivative instruments may be used to replicate underlying positions and hedge market and company specific risks. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Accumulation Index. The Fund typically holds between 40-55 stocks and thus is considered to be highly concentrated. This means that investors should expect to see high short-term volatility. The Fund seeks to achieve growth over the long-term, therefore the minimum suggested investment timeframe is 5 years. |
| Manager Comments | As at the end of November, the Fund's weightings had been increased in the Consumer Staples, Health Care, Materials and Energy sectors, and decreased in the Communication and Financials sectors. The Fund's weightings in the Discretionary, IT and Industrials sectors remained unchanged. The Fund's top holdings at the end of the month included Commonwealth Bank, CSL, BHP Billiton, Westpac, Goodman, Aristocrat Leisure, NAB and James Hardie Industries PLC. |
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Performance Report: Insync Global Quality Equity Fund
19 Dec 2019 - Australian Fund Monitors
The Insync Global Quality Equity Fund rose +4.62%, outperforming AFM's Global Equity Index by +0.22% and taking 12-month performance to +33.86% versus the Index's +22.88%. Since inception in October 2009, the Fund has returned +13.90% p.a....
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19 Dec 2019 - Performance Report: Insync Global Quality Equity Fund
By: Australian Fund Monitors
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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high-quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are: size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio typically of 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. |
| Manager Comments | September and October saw a cyclical rotation towards value-based stocks which affected the short-term performance of the Fund. However, Insync noted the one area of consistency in this cycle has been the performance of quality growth companies. Their view is that current market conditions continue to reflect the trend in place since the GFC of low growth and low inflation. Positive contributors in November included Walt Disney, Adobe, Accenture and Amadeus. Detractors included Stryker, Zoetis, IDEXX Laboratories and Booking Holdings. Insync continues to have no currency hedging in place as they consider the main risks to the Australian dollar to be on the downside. |
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Performance Report: Spectrum Strategic Income Fund
19 Dec 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund rose +0.29% in November, taking performance over the past 12 months to +5.08% versus the RBA Cash Rate's +1.23%. Since inception in June 2009, the Fund has returned +7.82% p.a. with an annualised...
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19 Dec 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | The portfolio remains well diversified with a broad spread of securities by legal structure. Bank T2 capital remains a healthy 25% of the portfolio, whilst senior unsecured and senior secured represent 28% and 11% respectively. The fund holds 14% in ASX listed securities. Spectrum emphasise that, with 10% of the portfolio in cash, the Fund can take advantage of any credit spread weakness. The portfolio continues to maintain an investment-grade rating with an average credit rating of BBB+. Spectrum believe Trump's twitter announcements throughout November were the catalyst for a strong equity market earlier in the month. Their view is that increasing tensions between the US and China will keep the market on its toes. They noted global debt continues to rise and believe this may represent a problem over time, especially so if inflation or interest rates rise in the US and/or globally. They also believe markets in Australia will continue to take their lead from the US markets. |
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Performance Report: Bennelong Emerging Companies Fund
19 Dec 2019 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +2.95% in November, taking 12-month performance to +71.47% versus the ASX200 Accumulation Index's +25.98%. Since inception in November 2017, the Fund has returned +39.91% p.a. versus the Index's +12.08%.
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19 Dec 2019 - Performance Report: Bennelong Emerging Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may invest in securities expected to be listed on the ASX within 12 months. The Fund may also invest in securities listed, or expected to be listed, on other exchanged where such securities relate to ASX-listed securities |
| Manager Comments | The Fund's Sharpe and Sortino ratios for performance since inception, 1.53 and 2.69 respectively, by contrast with the Index's Sharpe of 1.16 and Sortino of 1.78, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst also avoiding the market's downside volatility. The Fund's top holdings at the end of the month included Viva Leisure, Bwx and Mader. Bennelong noted that, whilst performance has been reasonably strong, they continue to find very attractive opportunities among emerging companies that they believe should position the Fund for decent future returns over time. |
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Performance Report: 4D Global Infrastructure Fund
19 Dec 2019 - Australian Fund Monitors
The 4D Infrastructure Fund rose +0.87% in November, outperforming its benchmarks (OECD G7 Inflation Index +5.5%) by +0.35% and taking 12-month performance to +29.64% versus the benchmark's +7.00%. The Fund has returned +14.27% p.a. with an...
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19 Dec 2019 - Performance Report: 4D Global Infrastructure Fund
By: Australian Fund Monitors
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| Fund Overview | The fund will be managed as a single portfolio of listed global infrastructure securities including regulated utilities in gas, electricity and water, transport infrastructure such as airports, ports, road and rail as well as communication assets such as the towers and satellite sectors. The portfolio is intended to have exposure to both developed and emerging market opportunities, with country risk assessed internally before any investment is considered. The maximum absolute position of an individual stock is 7% of the fund. |
| Manager Comments | The strongest portfolio performer for the month was Canadian renewable player Boralex (+14.8%) with the market reacting well to the Q3 results and positive momentum in their project pipeline. The weakest performer was Indonesian toll road operator Jasa Marga (-9.4%). In 4D's view, this weakness was a buying opportunity with all November news supporting the Jasa Marga investment thesis. As at the end of November, the Fund had an exposure of 35% to Developed Europe, 32% to Emerging Markets, 27% to North America and held 6% in cash. 4D noted that, despite a slowing global macro environment, it remains supportive of their overweight positioning to user pay assets. However, ongoing geo-political issues see them limiting exposure to certain regions (e.g. UK). |
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Performance Report: DS Capital Growth Fund
19 Dec 2019 - Australian Fund Monitors
The DS Capital Growth Fund rose +2.29%, taking 12-month performance to +23.19% and annualised performance since inception in January 2013 to +15.52% with an annualised volatility of 7.10%.
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19 Dec 2019 - 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, 1.82 and 3.78 respectively, by contrast with the Index's Sharpe of 0.83 and Sortino of 1.24, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst avoiding the market's downside volatility over the long-term. The Fund's up-capture ratio of 59.7% and down-capture ratio of 19.4% indicate that, on average, the Fund has capture significantly more of the market's upside than its downside since the Fund began. The Fund aims to deliver an average return of at least 10% p.a. through the economic cycle, with a focus on capital preservation. The Fund comprises a concentrated portfolio of small and mid-cap investments selected through a process of quantitative and qualitative analysis. |
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Performance Report: Cyan C3G Fund
19 Dec 2019 - Australian Fund Monitors
The Cyan C3G Fund has risen +19.55% over the past 12 months and has returned +19.40% p.a. with an annualised volatility of 11.28%. By contrast the ASX200 Accumulation Index has returned +8.46% p.a. with an annualised return of 10.88% since...
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19 Dec 2019 - 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 returned -3.2% in November. Cyan noted many of the companies in which they had enjoyed strong gains in prior months have endured selling pressure. They added that, while Cyan typically look at an investment timeframe in excess of 2 years, the stock market does value and price companies on a daily basis which can sometimes result in large fluctuations in short-term prices. Despite the underwhelming monthly return, Cyan remain optimistic about the Fund's outlook. They noted that, in addition to the positive expectations for their core holdings, there has been a deluge of corporate activity and new issues, some of which have the potential to be attractive longer-term investments. |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
18 Dec 2019 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund rose +0.61% in November. Since inception in July 2013, the Fund has returned +8.28% p.a. with an annualised volatility of 6.76%. Over the same period, the ASX200 Accumulation Index has returned +10.44%...
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18 Dec 2019 - 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 activity was predominantly driven by news flow in existing positions, although they continue to see a steady stream of deal flow. A handful of late stage deals completed, bringing a healthy amount of bonus franking credits with them which contributed to the effective return to investors and came in addition to the headline published returns. Harvest Lane's view is that 2019 was a somewhat frustrating year for prudently managed active investment approaches that don't gamble on broader market conditions. They expect 2020 to provide some very different market conditions to sort the wheat from the chaff. |
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