NEWS
Performance Report: Paragon Australian Long Short Fund
11 Jan 2018 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +4.69% in December, taking 12-month performance to +44.06% versus the ASX200 Accumulation Index's +11.80%.
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11 Jan 2018 - Performance Report: Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market. |
| Manager Comments | Performance in December was driven by contributions from long holdings in the Fund's electric vehicle theme, along with Updater, Aristocrat, Dacian Gold and Global Energy and short in Qantas, offset by declines in European Cobalt and New Century Zinc. At the end of the month the Fund had 39 long and 15 short positions. Paragon noted they remain constructive on markets, particularly within their areas of focus - Resources and Industrials, both exhibiting medium to long term tailwinds across the Fund's key thematics. In terms of the Fund's Resources thematics, Paragon noted Lithium and Cobalt continue to boast strong fundamentals. Paragon's proprietary Lithium Supply & Demand model shows industry deficits and strong Lithium prices for at least CY18 and CY19. With regards to the Industrials thematics, Paragon believe the strength in the emerging consumer will continue to drive ongoing growth in China facing industries. Paragon also believe their Medical Innovation and Mobile Internet thematics are set to go from strength to strength. |
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Fund Review: Insync Global Titans Fund November 2017
10 Jan 2018 - Australian Fund Monitors
Latest Fund Review on Insync Global Titans Fund is now available.
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10 Jan 2018 - Fund Review: Insync Global Titans Fund November 2017
By: Australian Fund Monitors
AFM Fund Review - November 2017 (pdf format)
INSYNC GLOBAL TITANS FUND
Attached is our most recently updated Fund Review on the Insync Global Titans Fund.
We would like to highlight the following:
- The Global Titans 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 - November 2017 (pdf format)
Performance Report: Bennelong Long Short Equity Fund
9 Jan 2018 - Australian Fund Monitors
The Bennelong Long Short Equity Fund returned +2.90% in December, taking annualised performance since inception to +16.50% per annum.
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9 Jan 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 | Positive performance was evenly spread across the top eight pairs, with no standout pair. The Fund's top performing pair was Long ALS Limited (ALQ) / short Aurizon (AZJ). The weakest pair was long Qantas (QAN) / short Flight Centre (FLT). Long Harvey Norman (HVN) / short Myer (MYR) / short Metcash (MTS) benefitted from a downgrade to Myer on weak sales preceding Christmas, however that was overshadowed by an upgrade to Metcash following improved interim results. The latest report discusses the Manager's outlook for equity markets. Bennelong highlight the relative size of the stock market to the size of the economy as a measure of valuation, noting that the current ratio of the Wilshire 5000 Index to US nominal GDP is about 130%. They note that this compares to a history of significant variation ranging from 40% during the late 1970's to 140% in the lead up to the late 1990's dot-com bubble. |
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Performance Report: Collins St Value Fund
8 Jan 2018 - Australian Fund Monitors
The Collins St Value Fund fell by -0.27% in November after a Monash IVF downgrade and a board fight at BPS Technology paired back earlier gains.
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8 Jan 2018 - Performance Report: Collins St Value Fund
By: Australian Fund Monitors
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| Fund Overview | The managers of the fund intend to maintain a concentrated portfolio of investments in ASX listed companies that they have investigated and consider to be undervalued. They will assess the attractiveness of potential investments using a number of common industry based measured, a proprietary in-house model and by speaking with management, industry experts and competitors. Once the managers form a view that an investment offers sufficient upside potential relative to the downside risk, the fund will seek to make an investment. If no appropriate investment can be identified the managers are prepared to hold cash and wait for the right opportunities to present themselves. |
| Manager Comments | The Manager noted they continue to track economic activity and seek out value on a stock level, and that they currently own a number of positions that offer significant promise. The Fund invests in sustainable cash-flow generating businesses that are trading at significant discounts to their underlying worth. In the Fund's latest report, Collins St briefly discuss cryptocurrencies. They noted they don't offer a view when asked other than to note that most investors in the asset appear to be unsophisticated, and that current prices appear to be disconnected from the fundamental value of the underlying technology. Collins St continue to watch with fascination and a little trepidation. |
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Performance Report: Pengana PanAgora Absolute Return Global Equities Fund
5 Jan 2018 - Australian Fund Monitors
The Pengana PanAgora Absolute Return Global Equities Fund rose +0.9% in November, taking annualised return since inception in September 2010 to +8.86% with a volatility of 5.32%.
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5 Jan 2018 - Performance Report: Pengana PanAgora Absolute Return Global Equities Fund
By: Australian Fund Monitors
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| Fund Overview | PanAgora believes the best way to find opportunities in the global markets is to combine fundamental analysis with robust quantitative techniques in order to filter the investment universe and select the investments. The Fund invests primarily in listed equity securities from a global universe of developed markets and a select group of emerging market countries. The Fund's objective is to seek absolute returns by identifying and exploiting multiple inefficiencies that may exist in global equity markets. These inefficiencies are primarily exploited through the use of a long/short equity strategy which aims to construct a portfolio that is generally neutral to market movements. As such the performance of the investment strategy is largely independent of the market's performance. The Fund seeks to achieve its objective by using a diversified set of strategies that have low correlation to one another. In addition, because many of these strategies are designed to generate profit under different market conditions, their combination is expected to result in more stable returns over time than any individual strategy in and of itself. |
| Manager Comments | November performance was driven by the long-term portfolio (+0.71%), with strong performance coming from the US large cap stocks. Intermediate-term strategies contributed a marginal +0.02%. The short-term strategies contributed +0.18% in large part due to the success of trades prompted by the reconstitution of MSCI indices. In the long-term portfolio, IT (+0.79%), Health Care (+0.64%), and Consumer Discretionary (+0.55) were the largest sector contributors. The largest contributors in IT was Marvell Technology. Marvell remains a long position in the portfolio due to a good alpha score. In Health Care, a short in Tesaro was the largest contributor and remains a short position in the portfolio. The top performing position within Consumer Discretionary was a long position in International Game Technology. |
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Performance Report: Bennelong Australian Equities Fund
5 Jan 2018 - Australian Fund Monitors
The Bennelong Australian Equities Fund returned +0.16% in November, taking annualised performance since inception in January 2009 to +13.79%.
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5 Jan 2018 - Performance Report: Bennelong Australian Equities Fund
By: Australian Fund Monitors
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| 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 | At the end of November, the Fund's weightings were increased in the Health Care, Consumer Staples and Materials sectors and were decreased in the Discretionary, Industrials, Utilities and Financials sectors. The Fund's portfolio characteristics, as shown in the latest report, are in line with the Fund's objective of investing in high quality businesses with strong growth outlooks and underestimated earnings and momentum prospects. At the end of November the Fund held 27 stocks, the top 5 being CSL, Westpac, Aristocrat Leisure, NAB and Treasury Wine Estates. |
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Performance Report: Touchstone Index Unaware Fund
4 Jan 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +3.09% in November, outperforming the ASX200 Accumulation Index by +1.45%.
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4 Jan 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 | The Touchstone Index Unaware Fund primarily selects stocks from the S&P/ASX 300 Index and typically holds 10-30 stocks. It 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: 4D Global Infrastructure Fund
3 Jan 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +2.18% in November, outperforming it benchmark (OECD G7 Inflation Index +5.5%) by +1.44%.
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3 Jan 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 | Top performers in November included US Tower operator SBA Communications (+15.7%) and Spanish airport operator AENA (+10.3%). The weakest performer was again UK satellite operator Immarsat, down 18.1% as the market becomes increasingly concerned about Immarsat's guidance and the execution of its maritime strategy. The Manager believes the sell-off has been overdone and expect the long-term investment fundamentals to remain intact and differentiate it from the broader satellite sector. The Manager's outlook for global listed infrastructure over the medium term remains positive. They note 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: MHOR Australian Small Cap Fund
2 Jan 2018 - Australian Fund Monitors
The MHOR Australian Small Cap Fund returned +4.04% in November, outperforming the ASX200 Accumulation Index by +2.4% and taking 12-month performance to +22.80%.
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2 Jan 2018 - Performance Report: MHOR Australian Small Cap Fund
By: Australian Fund Monitors
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| Fund Overview | MHOR looks for investment that exhibit the following set of characteristics: -Opportunity - to take advantage of growth and positive alignment with industry themes and trends. -Quality business - competitively advantaged product or service offering. -Financial flexibility - appropriately resourced to capture its opportunity. -Management - with the vision and capability to bring it all together. -Fundamentally undervalued. MHOR also considers labour standards, environmental, social and ethical considerations when making investment decisions but only to the extent that these factors impact the assessment of risk or return. The minimum suggested investment timeframe is 3-5 years. |
| Manager Comments | The largest positive contributors in November were SpeedCast International (SDA), Orocobre (ORE) and Spirit Telecom (ST1). MHOR noted that SDA rose in response to higher oil prices and an upbeat presentation delivered by management at a broker conference. MHOR still think SDA shares are cheap, with an improving outlook and balance sheet likely to drive further re-rating. MHOR also noted the growing market acceptance of EV as the next global megatrend continues to drive up battery minerals stocks, such as ORE. MHOR entered November with 33 stocks and 13.5% cash, exiting with 33 stocks and 13.1% cash. The key detractor from November's performance was TopBetta (TBH) which slid after the September Quarterly report revealed their higher than anticipated costs to support the very strong turnover growth. After recently meeting with management, MHOR are further convinced on this position and see very near term positive catalysts for the stock price. |
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Performance Report: Qato Capital Market Neutral Fund
1 Jan 2018 - Australian Fund Monitors
The Qato Capital Market Neutral Fund contracted -2.55% in November, with the continued rally in the ASX-100 hindering Qato's short book as it finished up +1.40%.
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1 Jan 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 Fund was heavily exposed to the Real Estate sector which ended up +4.74% in November, with long positions in Stockland (+3.98%), Charter Hall (+8.79%), Investa Office Fund (+7.14%), Dexus (+6.04), Lendlease (-1.91%), and GPT (+6.29%), whilst having just one short position - Westfield Retail Trust (+7.85%). In the IT sector, the fund's short in Link Market Services (+3.4%) countered most of Computershare's return (+5.71%). Qato's short in Santos offset most of the gains in the Fund's long position in Origin Energy, however, Qato successfully selected the only energy company that fell during the month - Oil Search (-4.88%). Other positive and negative contributors included a long in James Hardie (+8.06%), short Graincorp (-4.91%), short TPG Telecomm (+10.19%), short Dulux (+9.42%) and long ALS (-12.66%). |
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