NEWS
Performance Report: Bennelong Kardinia Absolute Return Fund
14 Oct 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund has returned +9.04% p.a. with an annualised volatility of 7.01%. By contrast, the ASX200 Accumulation Index has returned +6.41% p.a. with an annualised volatility of 13.14%.
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14 Oct 2019 - 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 | The Fund returned -0.35% in September, with the short book dragging on performance. Top contributors included Paradigm Biopharmaceuticals (+25bp contribution), City Chic (+21bp), Westpac (+19bp), Nickel Mines (+17bp) and Independence Group (+17bp). Detractors included Appen (-16bp), Evolution (-15bp), Atlas Arteria (-14bp) and Charter Hall (-14bp). The largest detractor was the individual short book (-44bp), with Bellamy's the subject of a takeover bid and shorts in technology, oil and gold stocks impacting performance. Net equity market exposure was increased from 20.3% to 47.9% (51.5% long and 3.6% short), with the key changes being new positions in Boral, Corporate Travel, Cleanaway and Woodside Petroleum, increased weightings in Macquarie Group, James Hardie and Aristocrat, the closure of the Fund's short position in Share Price Index Futures, partially offset by the sale of Westpac and Telstra. |
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Performance Report: DS Capital Growth Fund
11 Oct 2019 - Australian Fund Monitors
The DS Capital Growth Fund rose +2.45% in September, outperforming the ASX200 Accumulation Index by +0.61%. Since inception in December 2012, the Fund has returned +15.28% p.a. versus the Index's +10.69%.
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11 Oct 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 | Over the quarter the Fund rose +3.75% versus the Index's +2.37%. DS Capital noted the main influence on stock markets during the quarter continued to be interest rates, ongoing trade negotiations between the US and China and the slowdown in global economic growth. Most of the Fund's holdings delivered good results during reporting season that were in line with DS Capital's expectations. The Fund's cash level finished the quarter at 19%. DS Capital believe central banks will continue trying to stimulate growth by cutting rates, however, they noted, with most official rates at almost zero, rates are seemingly less effective at stimulating growth and therefore other forms of stimulus may be required. DS Capital are working on several new opportunities that they hope to progress to investments for the Fund and will provide more information on these in forthcoming updates. |
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Performance Report: Cyan C3G Fund
8 Oct 2019 - Australian Fund Monitors
The Cyan C3G Fund rose +8.64% in September, outperforming the ASX200 Accumulation Index by +6.78% and taking annualised performance since inception in August 2014 to 21.23%.
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8 Oct 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 | There were numerous positive contributors to performance and few detractors in September. Seven of the Fund's holdings rose more than 30% over the course of the month and another 6 delivered impressive double-digit percentage gains. Top contributors included Alcidion (+65%), Oventus (+49%), Quickstep (+44) and Quickfee (+31%). Cyan noted external factors such as global political uncertainty and trade wars continue to cause bursts of volatility in equity markets. Their view is that, with historically low interest rates, investors are simply not being rewarded for conservative investment decisions. They added that, whilst the market may be trading at a slight premium to long term averages in terms of price to earnings ratios, low interest rates support company valuations and thus Cyan continue to see excellent investment opportunities at the smaller end of the market. |
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Performance Report: Spectrum Strategic Income Fund
4 Oct 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund rose +0.24% in August, taking annualised performance since inception in June 2009 to +7.98% with an annualised volatility of 3.02%.
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4 Oct 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | Spectrum noted the portfolio remains well diversified with a spread of securities by industry sector and legal structure. Bank T2 capital remains at 24% whilst senior unsecured remains at 37%. The Fund continues to maintain a healthy 9% in ASX listed securities. The portfolio continues to maintain an average credit rating of A-. Top 10 holdings as at the end of August included National Australia Bank, DBS Group Holdings, AAI Ltd, QPH Finance Co Pty Ltd, Paccar Financial, Suncorp Metway, Toyoto Finance Australia, Multiplex Sites Trust and Bank of Queensland. The Fund's cash position was 12.7%. Spectrum believe the cash position of 12.7% puts the Fund in a good position to take advantage of movements in spreads or rates. They added that this cash position also offers a level of protection during times of uncertainty. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
2 Oct 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +1.23% in August, outperforming the ASX200 Accumulation Index by +3.59% and taking annualised performance since inception in January 2009 to +16.40% versus the Index's +10.91%.
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2 Oct 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 August, the Fund's weightings had been increased in the Health Care, Consumer Staples, IT, Industrials, Communication and Financials sectors, and decreased in the Discretionary, REIT's and Materials sectors. Top holdings included CSL, Reliance Worldwide and Aristocrat Leisure. |
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Performance Report: DS Capital Growth Fund
1 Oct 2019 - Australian Fund Monitors
The DS Capital Growth Fund outperformed the ASX200 Accumulation Index by +1.74% in August, returning -0.62% against the Index's -2.36%. Since inception in January 2013, the Fund has returned +15.07% p.a. with an annualised volatility of only 7.20%.
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1 Oct 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 for performance since inception, 1.73 and 3.58 respectively, by contrast with the Index's Sharpe of 0.79 and Sortino of 1.17, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst avoiding the market's downside volatility. The Fund's down-capture ratio of 22.00%, average negative return of -1.25% versus the Index's -2.51% and maximum drawdown since inception of -8.80% versus the Index's maximum drawdown of -13.73% over the same period collectively demonstrate its capacity to outperform and thus protect investor capital in falling markets. 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: Loftus Peak Global Disruption Fund
30 Sep 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund outperformed AFM's Global Equity Index by +0.74%, returning -0.66% against the Index's -1.40%. Since inception in November 2016, the Fund has returned +21.57% p.a. versus the Index's annualised return...
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30 Sep 2019 - Performance Report: Loftus Peak Global Disruption Fund
By: Australian Fund Monitors
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| Fund Overview | The investment process involves a combination of top-down analysis with fundamental bottom-up qualitative and quantitative research to derive a risk-adjusted discounted cash flow (DCF) valuation of companies in the target universe. The investment team will generally buy stocks from the pool of securities that are trading below Loftus Peaks' valuation and sell them when they are trading above Loftus Peak's valuation. The approach allows for both fundamental accounting information as well as market-oriented inputs to be factored into the portfolio construction process. Loftus Peak's model typically does not rely on leverage to deliver investment returns and specifically takes into account risk in the valuation process. Capital preservation can be managed by holding up to 50% cash. Index and currency options and futures may also be used to manage risk. |
| Manager Comments | Top contributors in August included Qualcomm, Roku and Microsoft. Detractors included Netflix, Xilinx and Tencent. Loftus Peak noted the high volatility in August led to some negative moves in companies with exposure to China's Huawei. They believe the choppy market will ultimately calm with underlying growth in the Fund's core positions coming to the fore. The Australian dollar depreciated -2.3% over the month against the US dollar, which meant the value of the Fund's US dollar positions increased. As at 31 August 2019, the Fund carried a foreign currency exposure of 95%. |
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Performance Report: Touchstone Index Unaware Fund
30 Sep 2019 - Australian Fund Monitors
The Touchstone Index Unaware Fund outperformed the ASX200 Accumulation Index by +0.44% in August, returning -1.92%. Since inception in April 2016, the Fund has returned +11.37% p.a. with an annualised volatility of 9.87%.
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30 Sep 2019 - 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 22 stocks with a median position size of 4.6%. The portfolio's holdings had an average forward year price/earnings of 16.1, forward year EPS growth of 4.0%, forward year tangible ROE of 22.5% and forward year dividend yield of 4.3%. The Fund's cash weighting left unchanged from the previous month at 5.1%. The Fund primarily seeks to select stocks from the ASX300 Index, typically holding between 10-30 stocks. The Fund seeks to invest in reasonably priced, good quality companies with a significant share of expected returns coming from sustainable dividends. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
27 Sep 2019 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund outperformed the ASX200 Accumulation Index by +1.92% in August, returning -0.44% versus the Index's -2.36%. Since inception in November 2009, the Fund has returned +10.41% p.a. versus the...
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27 Sep 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 | The Fund's top holdings as at the end of August included Commonwealth Bank, CSL, BHP Billiton, Westpac Banking, Goodman, Aristocrat Leisure, ANZ and NAB. As at the end of the month, the Fund's holdings had been increased in the Discretionary, Health Care, Consumer Staples, IT and Industrials sectors, and decreased in the REIT's, Communication, Energy, Materials and Financials sectors. |
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Fund Review: Insync Global Capital Aware Fund August 2019
24 Sep 2019 - Australian Fund Monitors
Latest Fund Review on Insync Global Capital Aware Fund is now available. The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend...
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24 Sep 2019 - Fund Review: Insync Global Capital Aware Fund August 2019
By: Australian Fund Monitors
AFM Fund Review - August 2019 (pdf format)
INSYNC GLOBAL CAPITAL AWARE FUND
Attached is our most recently updated Fund Review on the Insync Global Capital Aware Fund.
We would like to highlight the following:
- The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend growth and downside protection.
- Portfolio selection is driven by a core strategy of investing in companies with sustainable growth in dividends, high returns on capital, positive free cash flows and strong balance sheets.
- Emphasis on limiting downside risk is through extensive company research, the ability to hold cash and long protective index put options.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - August 2019 (pdf format)
