NEWS
Performance Report: 4D Global Infrastructure Fund
1 May 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +0.86% in March, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +0.30%. Since inception in March 2016, the Fund has returned +11.46% per annum.
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1 May 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 strongest performer in March was EDP Renovaveis, a Portuguese based global renewable operator, which was up +11.3%. The weakest performer was Brazilian toll road operator Ecorodovias, down -13%. The Manager noted that, given the ongoing global environment, they remain overweight user pay assets which have a direct correlation to macro strength. They also noted that, while they are underweight utilities ('bond proxies'), increasing geo-political concerns sees the Fund maintain core exposure to quality defensive utility assets. The Manager's outlook for global listed infrastructure over the medium term remains positive. They noted there has been a significant underinvestment in infrastructure around the world over the past 30 years and that public sector fiscal and debt constraints will limit governments' ability to respond, resulting in an increasing need for private sector capital as part of the funding solution. |
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Performance Report: Qato Capital Market Neutral Fund
30 Apr 2018 - Australian Fund Monitors
The Qato Capital Market Neutral Fund rose +2.06% in March, outperforming the ASX200 Accumulation Index by +5.83%. Over the quarter, the Fund is up +2.37% versus the Index which has fallen -3.86%.
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30 Apr 2018 - Performance Report: Qato Capital Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund seeks to preserve capital and maximise absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks by generally holding up to 50 S&P/ASX-100 positions (up to 25 long positions & 25 short positions). Historically, the strategy has been uncorrelated to traditional asset classes with a negative beta to equity markets. Qato Capital's process is entirely systematic - stock selection and risk management are all employed in a rules based approach. Positions in Qato's long-portfolio and short-portfolio are rotated monthly dependent upon their Q-Score ranking. The strategy employs no financial leverage/gearing to purchase securities, no derivatives and no financial products to imitate leverage. |
| Manager Comments | The telecommunications sector, down -30.88% over the past 12 months, continued its decline in March and added +1.20% to the Fund's performance with Qato holding short positions in Telstra (-6.27%) and TPG Telecomm (-10.15%). The Fund's short positions in the Financial sector also contributed positively as the sector fell due to increasing global funding costs and the ramifications of the Royal Commission, these included short positions in Bank of Queensland (-13.22%), Bendigo Bank (-10.44%), ANZ (-7.54%), NAB (-5.60%) and Westpac (-6.99%) which contributed +0.99% overall. Whilst the Fund's short weightings to the Financial sector were reduced at the end of the month, Qato still see headwinds for the sector with loan growth slowing and offshore borrowing costs increasing. Insurance Australia Group also contributed positively to performance (+0.45) after falling steadily throughout March (-8.78%). Other positive contributors included Evolution Mining (long, +0.42%), Graincorp (long, +0.28%). |
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Performance Report: Bennelong Kardinia Absolute Return Fund
27 Apr 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund returned -1.9% in March, outperforming the ASX200 Accumulation Index by +1.87%.
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27 Apr 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 | A short position in Share Price Index Futures (+96bp contribution for the month) was the biggest contributor given the fall in the market. Other positive contributors included Bellamy's (+28bp), Alumina (+16bp) and Lynas (+11bp). The short book also made a solid contribution, with individual stock short positions in telcos, financial services, infrastructure and consumer staples comprising five of the top eight stock contributors for the month. Negative contributors included ANZ (-44bp), Westpac (-40bp), Bluescope (-25bp), CSL (-24bp), Birimian (-22bp), Independence Group (-22bp) and Janus Henderson (-22bp). Net equity market exposure was reduced from 73.2% to 59.1% (93.5% long and 34.4% short), largely driven by an increased short position in Share Price Index Futures and lower weightings in ANZ and Westpac. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
26 Apr 2018 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund returned -3.21% in March, outperforming the ASX200 Accumulation Index by +0.56%.
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26 Apr 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 | Bennelong's view is that, while it's always difficult to predict short term moves, they believe the Australian stock market looks well positioned to provide attractive returns over the foreseeable future. For the broader market, Bennelong pointed out that investor sentiment is cautious, valuations look relatively attractive and earnings are solid and growing nicely, and that these factors support Bennelong's bottom-up assessment of a positive outlook for returns. |
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Performance Report: KIS Asia Long Short Fund
25 Apr 2018 - Australian Fund Monitors
The KIS Asia Long/Short Fund rose +0.71% in March, outperforming the ASX200 Accumulation Index by +4.48%.
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25 Apr 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 | KIS noted with relatively sharp declines in equities they suffered on many of their long positions, however, none of these losses were significant in their own right. Two of the Fund's largest three profitable investments came from long positions contributing 31bp between them. The Fund also benefited from a short position in Challenger Finance where KIS had concerns about their expansion into Japan and the impact of rising yields, especially on weaker credits, could have on their portfolio of assets. KIS also noted that their discipline of maintaining a hedged portfolio using index to rebalance any significant difference between the Fund's stock longs and shorts contributed 57bp. In their latest commentary, KIS discuss what they believe to be two key drivers of the Australian market's performance in March - the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, and Labor's suggested changes to the dividend imputations/credit system. |
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Performance Report: Glenmore Australian Equities Fund
24 Apr 2018 - Australian Fund Monitors
The Glenmore Australian Equities Fund returned -2.80% in March, outperforming the ASX200 Accumulation Index by +0.97%.
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24 Apr 2018 - Performance Report: Glenmore Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | The main positive contributor in March was Bravura Solutions (+25.9%). Negative contributors included NRW Holdings (-23.5%), Appen (-14.4%), Pacific Current (-11.9%) and Pinnacle Investments (-6.4%). Glenmore noted there was no specific news flow on any of these stocks and that the main driver was general weakness in equity markets. Glenmore noted that, with the Index falling by -3.4% in the March 2018 quarter, and earnings revisions remaining positive, stock market valuations have improved making the stock market on an aggregate basis more attractive. With reporting season now complete, the next few months will see the Fund meet with a large number of companies and their management teams where Glenmore is optimistic of identifying potential investments for the portfolio. |
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Bennelong Twenty20 Australian Equities Fund March 2018
23 Apr 2018 - Australian Fund Monitors
The latest Fund Review on Bennelong Twenty20 Australian Equities Fund is now available. The Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of ex-20 stocks.
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23 Apr 2018 - Bennelong Twenty20 Australian Equities Fund March 2018
By: Australian Fund Monitors
AFM Fund Review - March 2018 (pdf format)
BENNELONG TWENTY20 AUSTRALIAN EQUITIES FUND
Attached is our most recently updated Fund Review on the Bennelong Twenty20 Australian Equities Fund.
- The Bennelong Twenty20 Australian Equities Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of stocks outside the Top 20. Construction of the ex-top 20 portfolio is fundamental, bottom-up, core investment style, biased to quality stocks, with a structured risk management approach.
- Mark East, the Fund's Chief Investment Officer, and Keith Kwang, Director of Quantitative Research have over 50 years combined market experience. Bennelong Funds Management (BFM) provides the investment manager, Bennelong Australian Equity Partners (BAEP) with infrastructure, operational, compliance and distribution services.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - March 2018 (pdf format)
Fund Review: Bennelong Kardinia Absolute Return Fund March 2018
20 Apr 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 Apr 2018 - Fund Review: Bennelong Kardinia Absolute Return Fund March 2018
By: Australian Fund Monitors
AFM Fund Review - March 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 10.51% p.a. with a volatility of 6.95%, compared to the ASX200 Accumulation's return of 5.33% p.a. with a volatility of 13.49%.
- 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 - March 2018 (pdf format)
Performance Report: ARCO Absolute Trust (formerly Optimal)
19 Apr 2018 - Australian Fund Monitors
The ARCO Absolute Trust rose +1.39% in March, outperforming the ASX200 Accumulation Index by +5.16%. Since inception in September 2008, the Fund has returned +8.43% p.a. with a volatility of 3.75%.
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19 Apr 2018 - Performance Report: ARCO Absolute Trust (formerly Optimal)
By: Australian Fund Monitors
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| Fund Overview | The Fund's bias is likely to be net long under normal market conditions, with the core strategy being to construct a portfolio of listed equity securities priced at levels that do not adequately reflect their underlying value. The Fund will seek to boost returns and limit potential market downside by selective short selling of individual stocks which are priced at levels that are viewed as materially above their underlying value. The Fund will also use certain trading strategies both within its core portfolio (through rebalancing stock weights and overall market exposure in response to price movements) and in certain other situations (typically of a shorter-duration and/or opportunistic nature) with the objective of further increasing returns. *Formerly the Optimal Australia Absolute Trust |
| Manager Comments | Short holdings drove the positive absolute performance result, especially across the banking and insurance sectors, with the Index Futures positions also making strong contributions. The long portfolio generated a negative overall return, however, it performed notably better than the underlying market with positive returns from almost half of the Fund's holdings. Despite the modestly net long position at month-end (a result of portfolio rebalancing into market weakness), ARCO continue to be wary of increasing risks coming more to the fore in equity markets globally. As such, minimising investor drawdown remains front of mind in ARCO's stock selection and portfolio rebalancing activity with what ARCO expects will remain a volatile market. |
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Performance Report: Bennelong Long Short Equity Fund
18 Apr 2018 - Australian Fund Monitors
The Bennelong Long Short Australian Equities Fund rose +0.83% in March, outperforming the ASX200 Accumulation Index by +4.6%. Since inception in January 2003, the Fund has returned +16.29% p.a. with slightly lower volatility than the market.
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18 Apr 2018 - 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 | The Fund's positive return came from the short portfolio's contribution. However, the long portfolio also outperformed the market with several positions closing higher. Bennelong noted performance broadly reflected trends set by reporting season. In terms of pairs, positive contributors included long Macquarie / short Bendigo and long ALS limited / short Aurizon. On the negative side, long Crown / short SkyCity was the Fund's weakest pair, however, Bennelong noted that the overall contribution from the Fund's negative pairs was minimal. |
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