NEWS
Performance Report: Pengana Absolute Return Asia Pacific Fund
26 Feb 2018 - Australian Fund Monitors
The Pengana Absolute Return Asia Pacific Fund rose +0.50% in January, taking annualised performance since inception in October 2008 to +8.51% with an annualised volatility of 6.00%.
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26 Feb 2018 - Performance Report: Pengana Absolute Return Asia Pacific Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will usually hold 40 to 80 positions and will be well diversified across the various event strategies. In keeping with the absolute return focus the Manager will eliminate market risk where appropriate by hedging market and foreign currency risks. Since inception the Fund has averaged a net equity market exposure of ~10%. Sizing of an investment position will depend on the expected risk adjusted returns while taking account the liquidity and volatility of the stock. In addition, the maximum potential loss on any one position should be greater than 0.5% of the NAV and the position should not exceed 30% participation of stressed volume assuming a $200m NAV. Other criteria considered are ability to hedge and the availability of pair candidates as well as the average bid-ask size. For M&A strategies average long position is 3 to 5.5% and average short position 2 to 5%. |
| Manager Comments | M&A, Directional and Relative Value strategies all contributed positively for the month. The largest contributor in the M&A sub-strategy was Alpine Electric which rose +5.7%, contributing 42bps to overall performance. In the Relative Value book, the largest positive contributor was the Fund's long/short position +SINA/-Weibo Corp. contributing +16bps. The Directional Alpha book contributed +0.7% to performance, key successes in January included Tsingtao (+13.7%), China Conch Venture (+19.8%), SIIC Environment (+4.9%), whilst key detractors included Bharti Airtel (-3.0%). The Fund's M&A gross exposure increased to 73% from 57% on the back of strong M&A deal activity and the Fund's Relative Value exposure increased to 90% from 75%. On the back of strong equity moves, Pengana have reduced the Fund's Directional Alpha book to 14.7% from 19.9%. The Fund's net and gross exposures averaged +14.7% and 186% respectively during the month. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
23 Feb 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund fell by -0.16% in January. Since inception in May 2006, the Fund has returned +10.80% per annum with a volatility of 6.95%.
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23 Feb 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 | Top contributors included Whitehaven Coal (+23bp contribution for the month), Seven Group (+13bp), South32 (+11bp), Macquarie Group (+11bp) and Independence Group (+11bp). Short positions in Share Price Index Futures (+29bp) and Macquarie Atlas (+6bp) also contributed positively. Detractors included Mineral Resources (-25bp), Netwealth (-21bp), Costa Group (-19bp) and Amcor (-16bp). Net equity market exposure (including derivatives) was kept fairly stable at 46.0% (73.9% long and 27.9% short) as the Manager added new positions in Bellamy's, Qantas and Worley, sold Incitec Pivot and added to the Fund's short position in Share Price Index Futures. |
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Bennelong Twenty20 Australian Equities Fund January 2018
22 Feb 2018 - Australian Fund Monitors
Latest Fund Review on Bennelong Twenty20 Australian Equities Fund is now available.
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22 Feb 2018 - Bennelong Twenty20 Australian Equities Fund January 2018
By: Australian Fund Monitors
AFM Fund Review - January 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 - January 2018 (pdf format)
Performance Report: Glenmore Australian Equities Fund
21 Feb 2018 - Australian Fund Monitors
The Glenmore Australian Equities Fund returned +3.47% in January, taking performance since inception in June 2017 to +33.01%.
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21 Feb 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 | Positive contributors in January mentioned in the latest report include Pinnacle Investment Management (+24.5%), Emeco Holdings (+14.0%). Detractors included Macquarie Atlas Road (-8.7%), Moelis Australia, Alliance Aviation Services and Hotel Property Investments. Glenmore believe the volatility seen earlier in February is likely to continue until more data is released. Glenmore's focus will be on identifying quality businesses that are undervalued and can outperform over the long term, rather than attempting to predict short-term movements in global markets. Given the Fund's significant cash weighting, Glenmore are optimistic that any volatility driven by macro concerns will provide some opportunities to invest in high quality businesses that have been oversold. |
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Performance Report: 4D Global Infrastructure Fund
21 Feb 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund fell by -0.84% in January, outperforming the FTSE 50/50 Infrastructure Index which fell -3.24%.
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21 Feb 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 Manager noted the strong AUD, up +3.15% for the month, was responsible for much of the Fund's underperformance. The strongest performer in January was Brazilian rail operator Rumo (+10%). The weakest performer was Indonesian toll road operator Jasa Marga (-10.9%). The Manager noted Jasa Marga has been a strong performer in recent months and they believe this weakness can be attributed to some profit taking. The Manager briefly highlighted the spike in US Treasury Bond yields early in the month, attributing it to press reports (which the Manager noted were subsequently denied) suggesting China was going to reduce its purchases of US Treasury Bonds. The Manager believes this episode illustrated the potential global financial clout China now retains. The Manager also mentioned Donald Trump's infrastructure plan outlined in his State of the Union address, noting that news sources indicated the administration will seek to offer US$200 billion in grants over 10 years to leverage investment from state, local, and private sources, hoping to spur about US$1 trillion total in spending. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
20 Feb 2018 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund fell by -0.27% in January. Since inception in November 2009, the Fund has returned +10.70% per annum.
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20 Feb 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 | At the end of the month, weightings were increased in the IT and Materials sectors and were decreased in the Discretionary, Consumer Staples, Health Care, Financials and Industrials sectors. Weightings remained unchanged in the Telco's, Utilities, Energy and REITs sectors. The Fund combines a passive investment in the S&P/ASX20 Index and an actively managed investment in Australian listed stocks outside this index. The passive position is achieved by investing individually in each of the S&P/ASX20 Index's individual stocks with approximately the same weightings they represent in the S&P/ASX300. Currently this weight is approximately 60% of the Fund's portfolio. The active position in ex-20 stocks has the goal of allowing the Fund to outperform the broader market. |
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Performance Report: ARCO Absolute Trust (formerly Optimal)
20 Feb 2018 - Australian Fund Monitors
The ARCO Absolute Trust returned +0.91% in January. Since inception in September 2008, the Fund has returned +8.56% per annum with a volatility of 3.72%.
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20 Feb 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 | In January, ARCO reduced the Fund's gross exposure by trimming the Fund's long positions on the back of recent strong price rises. Short positions (mainly in interest rate sensitive REITs and in index futures) made the greatest contribution to performance. The Fund's long positions also contributed positively in aggregate, and were relatively broad-based across the Fund's minerals, software and services, telecoms and financial holdings. The Trust continues to reflect ARCO's negative view of interest rate sensitive stocks, their favourable view on companies with clear earnings/margin growth paths, and their belief in the need to hedge broad market exposure into what ARCO expect to be a more volatile period ahead. |
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Performance Report: KIS Asia Long Short Fund
19 Feb 2018 - Australian Fund Monitors
The KIS Capital Long Short Fund returned +0.37% in January, taking annualised performance since inception in October 2009 to +13.65% with an annualised volatility of 5.25%.
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19 Feb 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 | In January, the Fund's index hedges detracted 106bp. No other short positions lost more than 25bp. The Fund's largest positive contributors were all on the long side and included Sirtex Medical (+56bp), Cynata Therapeutics (+27bp) and Sempcorp Marine Ltd (+30bp). In their latest report, KIS Capital briefly discuss their view on ETFs. KIS feel there is a role for simple and well-structured ETFs to allow investors to decide whether they'd prefer active management or passive/indexed returns from a simply structured ETF such as the SPDR S&P/ASX200 Fund (STW.AU). However, they don't agree that investors should be able to 'point, click and buy' a risk profile and return stream that they don't understand. Two examples they point to are the VelocityShares Daily Inverse VIX Short-Term ETN (XIV.US), which was terminated after it experienced a daily drop of 84% on the 5th of February due to a spike in volatility and its own hedging actions, and VelocityShares Daily 2x VIX Short-Term ETN (TVIX.US). |
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Fund Review: Bennelong Long Short Equity Fund January 2018
19 Feb 2018 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available.
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19 Feb 2018 - Fund Review: Bennelong Long Short Equity Fund January 2018
By: Australian Fund Monitors
AFM Fund Review - January 2018 (pdf format)
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large large-caps from the ASX/S&P100 Index, with over fourteen-year track record and annualised returns of 16.51% p.a.
- The consistent returns across the investment history indicate the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 1.00 and 1.66 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - January 2018 (pdf format)
Fund Review: Bennelong Kardinia Absolute Return Fund January 2018
16 Feb 2018 - Australian Fund Monitors
Latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available.
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16 Feb 2018 - Fund Review: Bennelong Kardinia Absolute Return Fund January 2018
By: Australian Fund Monitors
AFM Fund Review - January 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 10.80% p.a. with a volatility of 6.95%, compared to the ASX200 Accumulation's return of 5.72% p.a. with a volatility of 13.53%.
- 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 - January 2018 (pdf format)
