NEWS
Performance Report: Frazis Fund
4 Oct 2018 - Australian Fund Monitors
The Frazis Fund rose +1.63% in August, outperforming the ASX200 Accumulation Index by +0.21%.
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4 Oct 2018 - Performance Report: Frazis Fund
By: Australian Fund Monitors
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| Fund Overview | The manager follows a disciplined, process-driven, and thematic strategy focused on five core investment strategies: 1) Growth stocks that are really value stocks; 2) Traditional deep value; 3) The life sciences; 4) Miners and drillers expanding production into supply deficits; 5) Global special situations; The manager uses a macro overlay to manage exposure, hedging in three ways: 1) Direct shorts 2) Upside exposure to the VIX index 3) Index optionality |
| Manager Comments | In August, the Manager sold out of Xero and the UK land developers. Frazis believe Xero has considerable pricing power but believe it to be better to sell and buy cheaper companies that are growing faster. They also allocated to iQiyi, Weibo and Alibaba, reasons for which are given in their latest report. In addition, they added a genetic testing company growing at over 150% per annum; Frazis believe the market for genetic testing has barely been scratched. Finally, Frazis added portfolio hedges in emerging markets in August. The Manager noted they have conducted most of their hedging in the United States where markets are most liquid. They noted this period of outperformance of the United States, and bear markets in many places elsewhere, squeezed the Fund on both sides of the trade. Going forward, Frazis aim to better match their hedging with their exposure, whilst maintaining their usual VIX and index protection. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
3 Oct 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +1.08% in August, taking annualised performance since inception in May 2006 to +10.40% versus the ASX200 Accumulation Index's +6.08%.
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3 Oct 2018 - 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 | Bennelong noted most of the portfolio's key positions reported solid results during profit reporting season. Top contributors in the long book included CSL (+74bp contribution), Afterpay Touch (+30bp), WorleyParsons (+25bp), Seven Group (+25bp) and A2 Milk (+20bp). In the short book, large gains from shorts in a packaging company (+23bp) and a mining stock (+10bp) were offset by shorts in retail, telco and consumer staples stocks. Detractors included Origin Energy (-51bp), Rio Tinto (-27bp), Independence Group (-18bp), Whitehaven Coal (-16bp), BWX (-15bp) and Reliance Worldwide (-15bp). Net equity market exposure was decreased from 67.3% to 55.2% (68.2% long and 13.7% short), with the key changes being the sale of Westpac, NAB and Origin Energy, partially offset by increased weightings in CSL, Whitehaven Coal and Afterpay, and the closure of a short position in Share Price Index Futures. |
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Performance Report: KIS Asia Long Short Fund
2 Oct 2018 - Australian Fund Monitors
The KIS Asia Long Short Fund returned +0.08% in August, taking annualised performance since inception in October 2009 to +12.99% versus the ASX200 Accumulation Index's +7.90%.
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2 Oct 2018 - 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 | The KIS Asia Long Short Fund returned +0.08% in August, taking annualised performance since inception in October 2009 to +12.99% versus the ASX200 Accumulation Index's +7.90%. This return has been achieved with an annualised volatility of only 5.17% versus the Index's 11.48%. The Fund's Sharpe and Sortino ratios, 1.88 and 4.26 respectively, by contrast with the Index's Sharpe of 0.48 and Sortino of 0.62, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst focusing heavily on protecting investors' capital from the market's downside. This is also supported by the Fund's down-capture ratio since inception of -95.13%, indicating that the Fund, on average, has risen when the market has fallen. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
27 Sep 2018 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +1.02% in August, taking 12-month performance to +19.68% versus the ASX200 Accumulation Index's +15.40%.
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27 Sep 2018 - 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 August, the Fund's weightings had been increased in the Discretionary, Health Care, Telco's, IT, REIT's and Financials sectors, and decreased in the Consumer Staples, Energy and Materials sectors. The Fund's top holdings are CBA, BHP, Westpac, CSL, Reliance Worldwide, ANZ, NAB and Aristocrat Leisure. The Fund combines a passive investment in the ASX20 Index and an actively managed investment in the ASX ex-20. The passive position is achieved by investing individually in each of the ASX20's individual stocks with approximately the same weightings they represent in the ASX300. Currently, this weight is approximately 60% of the Fund's portfolio. The active position in ex-20 stocks aims to allow the Fund to outperform the broader market. |
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Performance Report: Touchstone Index Unaware Fund
26 Sep 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +5.08% in August, outperforming the ASX200 Accumulation Index by +3.66%. Since inception in April 2016, the Fund has returned +15.28% per annum.
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26 Sep 2018 - 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 | At the end of the month the Fund held 20 stocks with a median position size of 4.5%, down -0.2% from the end of July. The portfolio's holdings had an average price/earnings of 16.2, EPS growth of 13.5%, tangible ROE of 19.5% and dividend yield of 4.5%. The Fund's cash weighting also decreased to 7.1% from 7.9% at the end of July. The Touchstone Index Unaware Fund primarily selects 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: Cyan C3G Fund
25 Sep 2018 - Australian Fund Monitors
The Cyan C3G Fund returned +0.7% in August, taking 12-month performance to +17.09%. Since inception in August 2014, the Fund has returned +23.83% p.a. versus the ASX200 Accumulation Index's +7.62%.
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25 Sep 2018 - 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 | Cyan noted the Fund experience unseen individual stock volatility during the month, with reporting season's results exacerbating underlying trading trends. Key contributors in August included Afterpay (+28%), Pivotal Systems (+30%) and Acrow Formwork (more than +50%). Detractors included Experience Co (-27%) and Axsess Today (-20%). Cyan met with Afterpay in San Francisco in mid-August and note that they gained a meaningful understanding of the potential of their expansion into the US. They believe that every business in which they have invested will grow strongly over the coming year and thus have long-term confidence in their current investment decisions. |
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Performance Report: 4D Global Infrastructure Fund
24 Sep 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund has returned +10.96% p.a. since inception in March 2016, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +3.44% annually.
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24 Sep 2018 - 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 Fund returned -0.73% in August. The strongest portfolio performer during the month was Mexican airport operator GAP, up +10.5%. The stock was up post the Mexican elections and also received a boost from the US/Mexico Agreement on trade late in the month. The weakest performer in August was Italian toll road operator Atlantia, down -27.9% after the tragic collapse of the Atlantia operated bridge in Genoa. 4D Infrastructure noted that, despite Atlantia's continued assertions that it had been maintaining the structure in line with the concession's technical standards, increasing noise from political factions around the termination of the Italian road concession framework significantly pressured the stock. 4D believe Atlantia has been oversold on the noise, however, they believe the stock will remain under pressure for some time. As such, 4D will continue to hold a position without increasing it at the present time. Given the generally positive macro environment, 4D Infrastructure remain overweight user pay assets which have a direct correlation to macro strength. However, ongoing geo-political concerns, plus near-term elections, sees them maintain core exposure to quality defensive utility assets. |
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Fund Review: Bennelong Kardinia Absolute Return Fund August 2018
20 Sep 2018 - Australian Fund Monitors
The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund is a long-biased, research driven, active equity long/short strategy which invests in listed ASX companies with track records greater than 10 years.
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20 Sep 2018 - Fund Review: Bennelong Kardinia Absolute Return Fund August 2018
By: Australian Fund Monitors
AFM Fund Review - August 2018 (pdf format)
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.
- The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies with over ten-year track record.
- The Fund has significantly outperformed the ASX200 Accumulation Index since its inception in May 2006 and also has significantly lower risk KPIs. The Fund has an annualised return of 10.40% p.a. with a volatility of 6.87%, compared to the ASX200 Accumulation's return of 6.08% p.a. with a volatility of 13.33%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Mark Burgess and Kristiaan Rehder have significant market experience, while Bennelong Funds Management provide infrastructure, operational, compliance and distribution capabilities.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - August 2018 (pdf format)
Performance Report: Bennelong Concentrated Australian Equities Fund
19 Sep 2018 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +0.08% in August, taking annualised performance since inception in January 2009 to +18.59% versus the ASX200 Accumulation Index's +11.11%.
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19 Sep 2018 - 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 | At the end of the month the Fund's weightings had been increased in the Discretionary, Health Care, IT and Financials sectors, and decreased in the Consumer Staples, Industrials and Materials sectors. The Fund aims to invest in a concentrated portfolio of high quality companies with strong growth outlooks and underestimated earnings momentum and prospects. By comparison with the Fund's benchmark (ASX300 Accumulation Index), the portfolio's holdings, on average, have a higher return on equity and lower debt/equity (Premium Quality), higher sales growth and higher EPS growth (Superior Growth), as well as higher price/earnings and lower dividend yield (Reasonable Valuation). |
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Performance Report: NWQ Fiduciary Fund
18 Sep 2018 - Australian Fund Monitors
The NWQ Fiduciary Fund returned +0.80% in August, taking annualised performance since inception in May 2013 to +7.02%.
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18 Sep 2018 - Performance Report: NWQ Fiduciary Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund aims to produce returns, after management fees and expenses of between 8% to 11% p.a. over rolling five-year periods. Furthermore, the Fund aims to achieve these returns with volatility that is a fraction of the Australian equity market, in order to smooth returns for investors. |
| Manager Comments | NWQ noted there was a high degree of dispersion in the returns of the underlying managers in August. This illustrates the diversified nature of the Fund with the constituent managers employing a broad array of hedged equity strategies. This dispersion is also reflective of the heightened level of stock market volatility that is typical of reporting season. NWQ mentioned the earnings announcements were particularly favourable for the Fund's Alpha allocation, which made a strong contribution to overall performance (+1.17%). |
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