NEWS
8 Oct 2021 - Hedge Clippings | 08 October 2021
|
||||||
|
If you'd like to receive Hedge Clippings direct to your inbox each Friday
|
8 Oct 2021 - Performance Report: Bennelong Australian Equities Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months (pa) | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The Bennelong Australian Equities Fund seeks quality investment opportunities which are under-appreciated and have the potential to deliver positive earnings. The investment process combines bottom-up fundamental analysis with proprietary investment tools that are used to build and maintain high quality portfolios that are risk aware. The investment team manages an extensive company/industry contact program which helps identify and verify various investment opportunities. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to the ASX-listed securities. The Fund typically holds between 25-60 stocks with a maximum net targeted position of an individual stock of 6%. |
| Manager Comments | The fund's returns over the past 12 months have been achieved with a volatility of 8.51% vs the index's 9.42%, and the annualised volatility of the fund's returns since inception in February 2009 is 14.55% vs the index's 13.48%. Since inception in February 2009 in the months where the market was positive, the fund has provided positive returns 93% of the time, contributing to an up-capture ratio for returns since inception of 152.32%. Over all other periods, the fund's up-capture ratio has ranged from a high of 166.21% over the most recent 24 months to a low of 131.56% over the latest 12 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period. |
| More Information |
8 Oct 2021 - Why have investors become theme junkies?
|
Why have investors become theme junkies? Andrew Macken, Montaka Global Investments October 2021 Most investors love a good theme. A long-term industry-shifting thematic trend provides fantastic structural support to a portfolio. Today there are no shortage of themes being spruiked to investors. New themes to emerge in just the last year include a commodities supercycle, the return of inflation, and a maturation of the world's mega-tech businesses, to name just a few. The only problem is, it remains far from clear if these new themes are even themes at all. Are we really experiencing a commodities supercycle?The iron ore price has collapsed by 50% in the last four months. This is not entirely surprising given the recent sharp weakening in Chinese credit growth - the primary economic fuel that underpins higher commodity prices. Iron Ore Spot Price Index
Is inflation really returning?Bond markets are certainly far from convinced. The last time markets expected some semblance of normal inflation in 2018, the US 10-year government bond was yielding around 3% per annum. Today, with a 'booming' economy and inflation 'taking off' the US 10-year yield remains at approximately 1.5%. And have the world's mega-tech businesses really maturedThis was the consensus view late last year. Conventional wisdom then said the likes of Amazon, Alphabet (Google) and Microsoft were now so big and had done so well for investors that, surely investors would find better returns elsewhere. Markets seem to have revised this view in recent months, acknowledging instead that we remain in the early innings of a digital transformation of corporates, governments and consumers that massively benefits these mega-tech stocks. (Investors will remember a similar falling-out-of-favour for mega-techs in 2018 - only to be back in favour again by 2019). In today's noisy market, there is a real danger that investors become 'theme' junkies where it's easy to mistake short-term trends and movements for real, long-term changes that deliver huge compounding returns over years. If investors can recognise this danger, they will not only be able to avoid the proliferation of fake themes, but they will also be better placed to identify and ride the real themes that deliver the big long-term returns. Have we all become 'theme junkies'?Like most investors, for me, there is nothing better than a reliable long-term theme. If you can position your portfolio on the right side of a strong theme it acts like a powerful tailwind and allows you to really compound your capital over the long term. For example, take the long-term structural reallocation of marketing spend to the world's leading digital channels, such as Facebook and Google, that drive superior ROIs through intelligent targeting. This theme is unquestionably reliable and has underwritten a meaningful part of Montaka's portfolio for more than five years. But it's easy to forget that durable long-term themes are exactly that: long-term. They evolve slowly but surely. Demographics and the aging populations of many of the world's largest economies is a classic example of a long-term structural theme that continues to play out as most long-term themes do. Slowly but surely. Today, however, it almost feels like investors are looking for a new decade-long theme … every two weeks. Investors have become theme junkies. On the one hand, this makes sense. Surely if owning one strong theme is great, then owning three, five or 10 themes is even better, right? Not necessarily. If you own a small handful of great themes, there are strong arguments to simply leave it at that. By adding additional 'less-good' themes, you are simply diluting your overall returns. But the human mind often doesn't appreciate this - we tend to think that more themes must always be better than fewer themes. And it's rarely the case. When an investor learns about a new theme, it is one of the more intellectually gratifying moments of investing. In today's high-gratification world, it is natural for investors to chase these intellectual hits and gravitate towards sources of new themes. Those in the business of competing for your attention are willing suppliers and will seek to give you what you want with a supply of never-ending themes.
The danger of too many new themesBut most of these new themes are not real themes. Investors are being sold short-term cycles as long-term themes. Some are not even short-term cycles, but merely the ebbs and flows that result from the natural moodiness of 'Mr. Market' himself. Chinese tech names were recently sold off hard after the Chinese Government introduced new competition, privacy and national security regulations. Many investors, including famed thematic investor, Cathie Wood, sold down their China positions. In July, Wood explained her move by citing a "valuation reset" and believed that Chinese tech valuations "probably will remain down". The new "theme" was that China was now too dangerous to invest in. But by the following month, news reports said Wood had repurchased many of the same China positions that had been sold. Investors can and should change their minds as often and as significantly as is necessary. But from month to month, or even year to year, a strong long-term theme typically doesn't change much at all.
How to overcome theme saturationSo how do investors avoid becoming theme junkies? Less is more. Stick to investment themes that are unquestionably reliable and resist the temptation to add new, weaker-form themes to your portfolio. Of course, a strong theme doesn't guarantee a good investment on its own. (Good investments always stem from under-priced assets - irrespective of any theme at play). But a strong theme can often transform a good investment into a great investment by lifting the earnings power of a well-positioned business to new heights previously unanticipated by the market. Montaka, for example, retains significant exposure to the world's leaders in cloud computing. This is not a new theme, of course. But it remains highly attractive: the ongoing shift to cloud computing remains in its early innings. It is unquestionably persistent and a small handful of leaders, such as Microsoft and Amazon, will be the big winners. Other reliable long-term themes in Montaka's portfolio include the continuing:
The path to long-term successWhen an investor builds their portfolio on a bedrock of strong investment themes, most of the daily machinations of the market simply become noise. Interesting noise, for sure - but noise, nonetheless. You can look past the daily noise with renewed confidence when you realise clearly that people are competing for your attention by spruiking fake 'themes'. Online social channels are also amplifying this noise. Riding real themes, of course, often means a portfolio's performance will look different from other investors. Owning the right long-term theme does not mean that a portfolio won't underperform from time to time. Long-term themes can just as easily fall in and out of favour as individual stocks do. But it pays to stay the course. Performing differently to others is a pre-requisite for superior long-term compounding. And remaining focused on the forest for the trees - investing in real themes and not fake themes - is the path to long-term investment success. Funds operated by this manager: Montaka Global 130/30 Fund, Montaka Global Fund, Montaka Global Long Only Fund |
7 Oct 2021 - Performance Report: AIM Global High Conviction Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months (pa) | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | AIM are 'business-first' rather than 'security-first' investors, and see themselves as part owners of the businesses they invest in. AIM look for the following characteristics in the businesses they want to own: - Strong competitive advantages that enable consistently high returns on capital throughout an economic cycle, combined with the ability to reinvest surplus capital at high marginal returns. - A proven ability to generate and grow cash flows, rather than accounting based earnings. - A strong balance sheet and sensible capital structure to reduce the risk of failure when the economic cycle ends or an unexpected crisis occurs. - Honest and shareholder-aligned management teams that understand the principles behind value creation and have a proven track record of capital allocation. They look to buy businesses that meet these criteria at attractive valuations, and then intend to hold them for long periods of time. AIM intend to own between 15 and 25 businesses at any given point. They do not seek to generate returns by constantly having to trade in and out of businesses. Instead, they believe the Fund's long-term return will approximate the underlying economics of the businesses they own. They are bottom-up, fundamental investors. They are cognizant of macro-economic conditions and geo-political risks, however, they do not construct the Fund to take advantage of such events. AIM intend for the portfolio to be between 90% and 100% invested in equities. AIM do not engage in shorting, nor do they use leverage to enhance returns. The Fund's investable universe is global, and AIM look for businesses that have a market capitalisation of at least $7.5bn to guarantee sufficient liquidity to investors. |
| Manager Comments | The fund's Sharpe ratio is 1.89 for performance over the past 12 months, and over the past 24 months is 1.64. Since inception, the fund's Sharpe ratio is 1.49 vs the Global Equity Index's Sharpe of 1.3. Its Sortino ratio (which excludes volatility in positive months) is 4.16 for performance over the past 12 months, and over the past 24 months is 3.31. Since inception the fund's Sortino ratio is 3.01 vs the Global Equity Index's Sortino of 1.95. Since inception in July 2019 in the months where the market was positive, the fund has provided positive returns 89% of the time, contributing to an up-capture ratio since inception of 102.88%. For performance over the past 12 month, the fund's up-capture ratio is 97.76%, and is 113.51% over the past 24 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months. The fund's down-capture ratio since inception is 82.83%, highlighting the fund's capacity to outperform in negative markets. |
| More Information |
7 Oct 2021 - Touch gives investors a slice of Afterpay talent
|
Touch gives investors a slice of Afterpay talent Graeme Carson, Cyan Investment Management 01 October 2021 |
|
"The next Afterpay" has to be a candidate for the most overused phrase in investment circles at the moment. Companies and investors alike are finding comparisons to draw, growth ambitions to conquer and lofty pricing to justify, in the hope that they have uncovered the next global growth super start-up.
Touch Ventures (ASX:TVL) is an investment company that listed on the ASX on Wednesday 29 September. It was founded in late 2019 and Afterpay, its largest shareholder, now owns about 24% through its wholly owned subsidiary Touchcorp - hence the name. Touch's strategy is to own up to 10 material investments in unlisted companies that are truly scalable, operating in the retail innovation, consumer, finance and data segments. These opportunities, into each of which Touch will initially invest $10-$25m with the aim of acquiring a 10%-40% non-controlling interest, will be identified by Touch Ventures' own management and investment team or referred by Afterpay through a formal collaboration agreement, which is in place until at least 2025. To date, Touch has made 5 investments, 4 of which have been originated by Afterpay. It appears this is the vehicle Afterpay has assembled to work with, invest in and add value to some of the best emerging businesses it finds as it works with retailers, consumers, investment banks, financial markets and investors around the globe. Since Cyan first encountered this business just over a year ago, three things have caught our eye:
This is a winning teamBy team, we mean everyone involved, including management, board, shareholders, investors and advisers. The easy starting point was obviously Afterpay. Since we invested in that business at its initial public offering in 2016, it has become an international success story. Afterpay has built a powerful position with the biggest players in the biggest markets in the world in retail, data and consumer finance. Not a bad potential investment partner! The team within Touch, led by Hein Vogel, is also high-pedigree. Then there's the board and advisers, including Mike Jeffries and Hugh Robertson, both of whom have been directly involved in Afterpay since its unlisted days. Touch looked compelling a year ago but then earlier this year a material investment from US firm Woodson Capital Management, now its second largest shareholder, and a board seat for the highly regarded Jim Davis offered further validation. Follow that strategistIt's not easy to get exposure to a portfolio of high-growth, scalable, emerging businesses that have come from a reliable source. This portfolio also comes with a shareholder that can enhance these businesses either directly within the Afterpay ecosystem, or by providing expertise and a supported pathway to scalability. This is a unique opportunity to get a listed vehicle that offers liquidity while investing in emerging companies with exposures well beyond Australia's shores. What's in the boxSince we first invested in Touch it has expanded its portfolio to 5 investee companies, deploying around $75m in invested capital. This table from the recent prospectus shows the portfolio. Source: Touch Ventures Prospectus The portfolio is expected to grow to around 10 large holdings in the short to medium term, with potential for smaller investments (generally less than $2m each) in even earlier stage companies. The next round of investments will be funded by the $100m raised through the IPO, in which all the larger existing shareholders invested. Touch is a listed investment company. It aims to make money via growth in the value of its underlying investments rather than their revenue. All investments are carried at their original entry-point valuation until there is a capitalisation event or very clear reason for a revaluation. The collective value of all the investments is the net asset value. It's likely that the stock market will value Touch at a significant premium to its net asset value. The carrying value of these businesses is largely unchanged from Touch's entry point (Happay has been increased but offset by PlayTravel). If I owned an emerging tech business and an Afterpay-led investment company took a stake, I would assume my business had been strongly validated and its value had just increased - and that's before any value my new share holders could add. It's worth noting that at the price investors paid in the IPO, the company has the same valuation it had when Woodson Capital Management invested in February. We think Touch Ventures is a unique vehicle and a compelling opportunity. It's also worth remembering that Square will be acquiring Afterpay early next year, which could lead to greater value creation for Touch shareholders. |
|
Funds operated by this manager: Cyan C3G Fund |
6 Oct 2021 - Webinar Invitation | Paragon
|
Webinar: Performance Update & Outlook Friday, 8 October 2021 at 12:00PM AEST
Funds operated by this manager: |
6 Oct 2021 - Fund Review: Insync Global Capital Aware Fund August 2021
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 2021 (pdf format)
6 Oct 2021 - 6 lessons from our wild, 50-bagger Afterpay ride
|
6 lessons from our wild, 50-bagger Afterpay ride Andrew Mitchell, Ophir Asset Management September 2021 |
|
In our Investment Strategy Note Andrew Mitchell takes a look back at our wild Afterpay ride from the very beginning and outline our six key lessons from our journey with this 50-bagger. I met Nick Molnar for the first time in 2017. I had walked out of a meeting with a founder now considered one of Australia's best-ever CEO entrepreneurs. But back at the office, I said to colleagues: "The CEO is too young. And isn't layby dead?". Yet something had stood out. How, I asked, does a microcap layby business attract Cliff Rosenberg and David Hancock to the Board. I knew them both. I had met Cliff through another listed business (Nearmap) where he had an incredible track record. That was before he went to LinkedIn in Asia-Pac as managing director. I'd worked with David at CBA where he was the enormously respected Head of Equities. Lesson 1: Sometimes you need a bit of luck. I often wonder if we'd have invested in Afterpay - or been too late to the party - if we hadn't known and respected Cliff and David. It goes to show it's often not what you know, but who you know and listen to. Sometimes the best investments are the ones you make because you've built a fantastic network. My initial mistake was to view Afterpay through the eyes of a late-30-something-male who thought this was too obvious to work. I wasn't viewing it through the eyes of their original target market: a 20-year-old millennial female shopping in the fashion and beauty industries. I needed to throw off the shackles of my own experiences. As Warren Buffett has said, "if past history was all there was to the game, the richest people would be librarians". When I sat down with Cliff following Afterpay's listing, he got me excited. He said the founders were dynamite. He hadn't seen a visionary like Nick before. Nick, Cliff said, was 25 going on 40 years' old. And Anthony Eisen's business acumen was first rate. They made a dream team. Importantly, Cliff noted that while Nick and Anthony could have heated debates, they'd always reach an agreement. With a fresh set of eyes, I went and spoke to some of Afterpay's very first unlisted retailers, and it completely changed my mind. They loved it. Afterpay helped them convert more sales, it expanded the basket size, and it slashed returns. Many of these retailers were even taking stock in the IPO. Ultimately, we invested following the IPO, and as time would tell, snag our first 50-bagger (assuming Square's acquisition proceeds as expected). Lesson 2: Have an open mind and be prepared to keep learning. In this case, we really needed to understand Afterpay's value proposition from the perspective of its target market. To do so there was no substitute to talking directly to Afterpay's customers. Afterpay's addressable market exploded. It was broadening out of fashion and beauty into the likes of dentistry and airline tickets. More men used it. As, crucially, did older customers. This was vital for the share price. It meant 'Customer Lifetime Value' (how much a single customer is worth to the business), was expanding rapidly. As it swiftly increased its percentage of the checkout, we quickly started seeing the business as relevant for not just retail 'some things' but retail 'almost everything'. Then, in 2018, the stock halved. It was Afterpay's first big test. ASIC was reviewing regulation of the Buy Now, Pay Later (BNPL) sector. Newspaper headlines blared doom and gloom about the company. Brokers sent through 'short reports' and many an Aussie fund manager bailed out. But rather than being caught in the headlights, we remembered the insights we got speaking to Afterpay's first retailers in Australia. So we got on a plane to speak to their first retailers in the US. And wow! It was going so well for them, driving online sales, and changing customer behaviour. It was like hitting replay on a recording of what those first Australian retailers said. As more negative headlines filled papers, and sellers were out in force, we bought a huge amount of Afterpay stock at dirt cheap prices, and our timing couldn't have been better. Lesson 3: To perform as a fund manager, you can't follow the herd. It would have been easy to get worried out of our holding in Afterpay. But Australia was going to be a sideshow if Afterpay successfully launched in the US, a market 15 times its size. Don't be lazy. You need to outwork your competitors. Afterpay share price At this time, I bailed up David on Collins St, Melbourne, and walked with him. He was so excited. Afterpay had just hired a new Head of Risk from Uber, and for the US expansion, they were attracting amazing talent with lucrative options packages. This was one of the company's most important acts because it allowed Afterpay to scale. It was no longer an Australian payments business, but on its way to becoming a global phenomenon. Lesson 4: Pay up for amazing local talent when expanding globally. This has been a hallmark of many of the great overseas success stories we have invested in. It now forms a part of our checklist for Aussie companies expanding internationally. But then the company was tested again. COVID-19 hit. The stock price cratered. Nick, Anthony, and the board thought (as everyone did) they could be in big trouble. Brokers fired off reports telling investors to short the stock. The company pivoted quickly, though. It tightened its purchase approvals process. Then, spurred by lockdowns and massive government fiscal support, spending on 'stay at home' items took off. E-commerce got a shot of adrenaline and retail online adoption accelerated. Commentary from key customers confirmed the pick up in online sales. The company had just passed another big test. We have often been asked over the years with Afterpay: "How can it be valued so high when it doesn't make a profit?" Our answer is simple: Afterpay's valuation, such as its price-to-earnings ratio (P/E), is so high because it is deliberately keeping the 'E' low to non-existent by reinvesting profits for future growth. Its Australian business is highly profitable, but it is using that cash flow to grow and take market share in new geographies. This is crucially important when it is breaking into new markets with virgin soil. It can acquire customers dirt cheap where there is no incumbent. BNPL is a scale game - being slow or late can be deadly. Afterpay needed to win the land grab by expanding quickly and making big investments in marketing and technology. If they had stopped reinvesting for growth, and put today's profits first, we would have headed for the exit given the opportunities that lay in front of the company. Lesson 5: Profit, and the valuation metrics based on it, matter less when a business is rapidly scaling and reinvesting cash flow to grow. When growing rapidly, other metrics matter more to investors, such as return on capital, customer lifetime value, customer acquisition cost, and merchant and customer growth numbers. It's still important, though, not to overpay based on where you think the business will be at maturity. Then, on August 2, Square announced it was going to buy Afterpay in a blockbuster deal that valued the company at $39 billion ... So where to now for Afterpay? I think it's just the end of the beginning. Square seems a good match with lots of synergies. After the acquisition was announced, Square's share price rose significantly, because investors could see that when it came to Square and Afterpay 1+1 = 3. Someone else may bid for the company. Apple and PayPal are two possibilities, although this becomes less likely as time goes by. We still own Afterpay in case a bidding war breaks out. We believe the BNPL industry will consolidate more, with perhaps 2-3 key players left when the market matures. I can see BNPL being just one, albeit very important, offering in a suite of products for the dominant payments providers. But Nick and Anthony are rare. Leaders in the sector and the original entrepreneurs. They have made Afterpay a verb. I couldn't be happier to have had my initial thoughts proven wrong. A large early investor in Afterpay told me they saw Nick present at a TEDx in Sydney when the company was in its infancy and the woman next to him said: "Who is this guy? He has such a presence; he would be perfect for my daughter". The investor replied: "I'm sorry to let you down, but he is very happily married". The Board once told me they had to encourage Nick to fly business class overseas because he was so frugal. If Nick can keep that kind of mindset and culture in the business, it's got every chance of being one of the few established players at the end. Lesson 6: Passionate, talented, visionary entrepreneurs are so scarce and valuable ... to their shareholders, employees, customers, and the economy at large. Finding the next Nick and Anthony is what gets us out of bed in the morning. When we are lucky enough to find these visionary entrepreneurs, we are reminded that there is no better part of the market in which to invest than small caps. |
|
Funds operated by this manager: Ophir High Conviction Fund (ASX: OPH) |
5 Oct 2021 - Traditional Markets Stable in August; Trouble in September
|
Traditional Markets Stable in August; Trouble in September Tony Bremness, Laureola Advisors September 2021 THE INVESTMENT ENVIRONMENT - Traditional Markets Stable in August; Trouble in September The S&P 500 was up 2.9% in August but developments in September suggest trouble. JP Morgan issued a bearish report pointing to warning signs which included huge gains in IPOs, the frenzy for SPACS, contagion from China, the Delta variant, and inflation exacerbated by supply chain blockages and raw material price increases. The China prediction began to unfold in September. The Chinese conglomerate Evergrande owes $90 bn to over 128 banks, $100 bn to suppliers, and has 1300 projects in 280 cities for sale. It can't pay. It has bought a soccer team in China and is part way through building a $1.7 bn stadium for the team. The company's bonds are trading at $0.25. In Europe, the price of natural gas, used in many critical industries including heating and electricity generation, has skyrocketed. Wholesale gas prices are up 50% since February, and some electricity prices are up as high as 7x last year's level. Inventories are at their lowest for a decade and less electricity than expected is being produced from wind. Russia, the main natural gas supplier, is limiting supplies. Higher gas and electricity prices will inevitably lead to higher inflation, lower economic output, and even potential blackouts. The Delta variant appears to be picking up steam. In these uncertain times, investors have few places to seek refuge, but a well-managed portfolio of life settlements can offer genuine shelter from the economic storms ahead. LAST MONTH IN THE LIFE SETTLEMENT MARKETS - Regulatory News from Washington Good; From the States, Mixed Life Settlement Markets were stable in August as IRRs remained in their usual wide range around the 12% to 14% midpoint. (Investors should always remember that this represents the projected IRR on the purchase price, which may not be the amount the seller receives due to transaction costs.) A bill went before Congress to allow insureds to use the proceeds from selling their insurance policy tax free to fund their own long term health care. This bill has bi-partisan support, a rare thing indeed in the current US political climate. It would be a win for the insureds, but also a win for the government as the savings to Medicaid would be significant. Some insurance companies have been offering enhanced surrender payments on a few policies, a move that is being challenged by the Life Settlement Association and its legal team. Such payments have been disallowed in Virginia and Louisiana but allowed in Texas. Florida disallowed them but later allowed them. These enhanced surrender payments have the potential to interfere marginally with the Life Settlement markets, but mostly for investors who rely on policy characteristics rather than an analysis of mortality. As Laureola relies on mortality analysis first and foremost, any negative impact on the LS markets will have little effect on the Laureola strategy. Funds operated by this manager: |
4 Oct 2021 - Performance Report: Insync Global Quality Equity Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months (pa) | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| 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 fund's Sharpe ratio has ranged from a high of 1.77 for performance over the most recent 12 months to a low of 1.26 over the latest 36 months, and is 1.14 for performance since inception. By contrast, the Global Equity Index's Sharpe for performance since October 2009 is 0.97. Since inception in October 2009 in the months where the market was positive, the fund has provided positive returns 81% of the time, contributing to an up-capture ratio for returns since inception of 80.13%. Over all other periods, the fund's up-capture ratio has ranged from a high of 125.14% over the most recent 36 months to a low of 88.37% over the latest 12 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months. The fund's down-capture ratio for returns since inception is 69.16%. A down-capture ratio less than 100% indicates that, on average, the fund has outperformed in the market's negative months over the specified period. |
| More Information |
