NEWS
Performance Report: Spectrum Strategic Income Fund
25 Jan 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund returned +0.29% in December, taking 12 month performance to +3.41% and the annualised return since inception in June 2009 to +8.07%.
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25 Jan 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | The portfolio's top holdings as at the end of December were Cash (7.4%), NAB (6.1%), DBS Group Holdings (5.8%), Suncorp Metway (4.5%), Toyota Finance Australia (4.4%), Network Finance (4.4%), AAI Limited (4.3%), UBS AG Australia (3.7%), Multiplex Sites Trust (3.2%) and APN Regional Property Fund (3.2%). In their latest report, Spectrum discuss the fall in global risk asset prices and the rally in government bonds and their respective contributing factors. These included weaker global economic indicators and heightened geopolitical risk, the draining of liquidity by central banks and plummeting oil prices. Domestically, they noted, A$ credit spreads rose around 8bps over the month, reaching their highest level since early 2017. Spectrum remain concerned the price declines in the residential property markets in Sydney and Melbourne look set to continue, which they say could impact the health of the economy and bond issuers. In their view, A$ bonds from internationally headquartered issuers look appealing as they look outside of Australia for opportunities. Spectrum reiterate that capital preservation remains paramount in their decision making. The Fund maintains a strong floating rate note bias in A$ corporate bonds. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
24 Jan 2019 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund has returned +9.05% per annum since inception in November 2009 versus the ASX200 Accumulation Index's +6.77%.
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24 Jan 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 Twenty20 Fund comprises a passive investment in the ASX20 and an actively managed investment in the ASX ex-20, therefore, any difference in performance between the Fund and the market is due to the ex-20 holdings. Bennelong noted its ex-20 holdings underperformed over the December quarter, however, they say company fundamentals had very little influence. Bennelong believe the 'risk-off' sentiment will tire, and fundamentals will ultimately win out. Key detractors over the December quarter included Aristocrat Leisure, BWX Limited and Flight Centre. Contributors included Costa Group and Goodman Group. |
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Performance Report: Bennelong Long Short Equity Fund
23 Jan 2019 - Australian Fund Monitors
The Bennelong Long Short Equity Fund rose +2.09% in December, outperforming the ASX200 Accumulation Index by +2.21% and taking annualised performance since inception to +15.57%.
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23 Jan 2019 - Performance Report: Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Fund Overview | In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. The Bennelong Market Neutral Fund, with same strategy and liquidity is available for retail investors as a Listed Investment Company (LIC) on the ASX. |
| Manager Comments | Bennelong noted there was an even number of positive and negative pairs which contributed to the Fund's return in December. The strongest pairs included long Challenger / short IOOF Holdings and ANZ, long Ramsay Health Care / short Healius and long Woolworths / short Metcash. The weakest pair for the month was long Iluka Resources / short Rio Tinto. |
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Fund Review: Insync Global Capital Aware Fund December 2018
21 Jan 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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21 Jan 2019 - Fund Review: Insync Global Capital Aware Fund December 2018
By: Australian Fund Monitors
AFM Fund Review - December 2018 (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 - December 2018 (pdf format)
Performance Report: Bennelong Emerging Companies Fund
21 Jan 2019 - Australian Fund Monitors
The Bennelong Emerging Companies Fund returned -2.12% in November, outperforming the ASX200 Accumulation Index by +0.09% and taking annualised performance since inception in November 2017 to +15.2%.
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21 Jan 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 top holdings as at the end of November were BWX, CML, Nearmap, Helloworld and Pinnacle Investment Management. The Fund invests predominantly in micro and small-cap stocks listed on the ASX. It is managed via a research-intensive and predominantly bottom-up investment approach. The Fund focuses on high quality stocks and seeks to avoid the higher risk that usually comes with micro and small-cap stocks. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
18 Jan 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund returned -0.67% in November, outperforming the ASX200 Accumulation Index by +1.54% and taking annualised performance since inception in Jan 2009 to +16%.
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18 Jan 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 November, the Fund's weightings had been increased in the Materials and REIT's sectors and decreased in the Discretionary, Health Care, Consumer Staples and Industrials sectors. The Fund's Communications sectors weighting remained unchanged at 1.7% of the portfolio. |
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Performance Report: Wheelhouse Global Equities Income Fund
18 Jan 2019 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund returned -0.86% in November, outperforming AFM's Global Equity Index by +0.94% and taking annualised performance since inception in May 2017 to +7%.
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18 Jan 2019 - Performance Report: Wheelhouse Global Equities Income Fund
By: Australian Fund Monitors
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| Fund Overview | To pursue this objective, the Investment Manager is responsible for actively managing, monitoring and tailoring the integration of derivative contracts alongside the Morningstar Portfolio, while taking into account changing market and stock specific conditions. The Investment Manager is responsible for maximising the structural benefits of short option positions (lowered Volatility, improved capital preservation, higher income generation), whilst mitigating, minimising and monitoring the structural negatives (variable market exposure, option expiries, collateral management and asymmetric return profiles). In addition, long derivatives positions are also used to enhance the capital preservation characteristics of the Fund in more extreme market movements. As a consequence of the integration of Derivatives, returns of the strategy, intra-cycle, are expected to vary from the underlying Morningstar Portfolio due to these characteristics. For example in weak markets, or in extended sideways markets, the Fund is expected to outperform relative to the Morningstar Portfolio. Conversely in strong positive markets the Fund is expected to underperform. |
| Manager Comments | Top contributors during the month included Nabtesco Corp, Biogen, Pfizer, Amgen and Kao Corp. Detractors included Richemont, Essilorluxottica, Julius Baer Gruppe, Symrise and Facebook. The Wheelhouse Global Equity Income Fund is designed to deliver equity returns with higher income generation and active downside protection. The strategy's high-income generation and active tail risk program are designed to lower risk and deliver equity returns with a smoother, more retiree-friendly return profile. As a result, Wheelhouse intend for returns to add relative value in weak and low-growth markets and to drag in more positive markets. |
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Performance Report: Quay Global Real Estate Fund
17 Jan 2019 - Australian Fund Monitors
The Quay Global Real Estate Fund returned +0.2% in November, taking 12-month performance to +8.35% and annualised performance since inception in February 2016 to +7.55%.
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17 Jan 2019 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | Quay were pleased with the Fund's performance in November as investors sought safer havens from general equity market volatility and uncertainty. Generally, Healthcare and Multifamily REITs fared well, but mid-market Retail and Office REITs did not. The Fund's modest return of +0.2% was in spite of a -2.8% currency impact. Performance was further negatively impacted by a relatively new addition to the portfolio - Boardwalk REIT (affordable accommodation with concentration in oil producing regions in Canada) - which fell -18% in local currency terms, however, Quay believe this price movement to have been an overreaction. The best geographies during the month were the US and Germany, whilst the UK, France and other European markets were the worst performers. Quay noted the Fund's exposure to the UK was negatively impacted by the continuing uncertainty around the Brexit process. Quay added that, while they remain cautious on the UK economy in light of Brexit, they are confident their investees will continue to perform well; the Fund's exposure is restricted to recession resistant industries (Student Accommodation) or sectors that have limited supply risks (Storage). There were no changes to the portfolio for the month. |
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Performance Report: KIS Asia Long Short Fund
16 Jan 2019 - Australian Fund Monitors
The KIS Asia Long Short Fund returned -0.24% in November, outperforming the ASX200 Accumulation Index by +1.97% and taking annualised performance since inception in October 2009 to +12.59% versus the Index's +6.54%.
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16 Jan 2019 - Performance Report: KIS Asia Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Whilst the Fund's primary strategy is focused on long/short equities, the ability to retain discretionary powers to allocate across a number of other investment strategies is reserved. These strategies may include, but not be limited to: convertible bond investments, portfolio hedging, equity related arbitrage, special situations (e.g. merger arbitrage, rights offerings, participation in international public offerings and placements, etc.). The Fund's geographic focus is Asia excluding Japan, but including Australia). The Fund may invest outside of this region to the extent that: 1. The investment decision is driven from the Asian region or; 2. The exposure is intended to mitigate risk or enhance return from factors external to the Asian region. |
| Manager Comments | In November, key contributors included a long position in LiveHire (+37bp contribution), Rio Tinto (+31bp) and a short position in Coca-Cola Amatil (+31bp). The main detractor during the month was a long position in CYBC PLC (-84bp). KIS noted there were no other lines with losses greater than 30bp. In their latest report KIS highlight that 89% of assets were negative YTD, the worst result since 1901 (the beginning of the data series). They also briefly discussed the turnaround in global markets as central banks shift from policies of quantitative easing to quantitative tightening, pointing to coordinated falls in residential property markets in London, New York, Toronto, Sydney, and Melbourne, as well as slumping equity and credit markets. KIS Capital say that, especially in this environment, their ability to short is highly valuable. They noted that over the year their short positions have allowed them to deliver a positive return. Their suggestion to investors is, if you have direct equities in your portfolio, consider whether these companies will need access to credit markets or equity markets to fund their businesses. They also warn investors to be wary of asset owners (especially those who balance long term assets with short term liabilities) and high PE/PEG ratio stocks. KIS believe cash will be king by 2020 and thus believe investors should have some readily available. |
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Performance Report: Spectrum Strategic Income Fund
16 Jan 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund returned -0.07% in November, outperforming the ASX200 Accumulation Index by +2.14% and taking annualised performance since inception to +8.11%.
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16 Jan 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | Spectrum noted November was a month beset with collapsing equity prices, falling oil prices, widening credit spreads, slowing global growth and falling government bond yields. Their view is that this weakening is outpacing the deterioration in fundamentals which is leading to the emergence of value. In addition, Spectrum believe a theme of growing importance is the realisation that accommodative monetary policy has or is about to reverse, which they noted could have an adverse effect on companies that 'gorged' on cheap debt. This in turn could lead to significant pricing risk to lower rated investment grade bonds should they slide into non-investment grade status; Spectrum highlight General Electric as a candidate for junk status. Domestically, Spectrum point to Australia's credit issues as well as the impact on the economy being caused by drought, weak commodity prices and a deteriorating residential property market. Their view is the domestic residential property market remains vulnerable to further deterioration, hence their cautious portfolio construction in this environment of heightened uncertainty. |
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