NEWS
Performance Report: Allard Investment Fund
10 Nov 2017 - Australian Fund Monitors
The Allard Investment Fund returned +2.77% in October. The Fund's annualised return since inception in July 2003 is +9.35%.
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10 Nov 2017 - Performance Report: Allard Investment Fund
By: Australian Fund Monitors
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| Fund Overview | Allard's investment approach has remained consistent throughout their history: That is to invest prudently but proactively in well-managed businesses that achieve superior returns on capital in industries with long-term growth potential. The Manager uses both broad top-down guidance and detailed bottom-up analysis to identify suitable markets, industries and companies. Although long only investors, a critical factor in their strategy and performance is the ability to hold cash when they cannot find companies that meet their criteria or are at a sufficient discount to their valuations. |
| Manager Comments | The Fund's latest report shows that holdings in cash and fixed income have decreased to 23.0% of the portfolio, down from 23.2% as at the end of September. The portfolio's weightings were decreased in the Industrials, IT, Health Care and Financials sectors while its weightings in the Utilities, Consumer Discretionary, Consumer Staples sectors were increased. The portfolio remains highly concentrated, with 53.2% of NAV held in the Fund's top 10 stocks. Geographically, Hong Kong and China make up most of the portfolio (44%), followed by Singapore (13.9%), India (11.1%), Korea (4.8%), Vietnam (1.6%) and Indonesia (1.6%). |
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Performance Report: ARCO Absolute Trust (formerly Optimal)
10 Nov 2017 - Australian Fund Monitors
The ARCO Absolute Trust returned +1.08% in October, taking annualised performance since inception in September 2008 to +8.30%.
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10 Nov 2017 - 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 | Positive performers included Fairfax, CYBG, MQG, ORE, PLS, Link, Caltex and Woolworths. Having recently exited GXY and reduced their position in PLS, the Fund's exposure to the lithium sector is now below 7%. The Fund's short exposure to select banks and other financials were detractors. ARCO also noted portfolio hedging was a drag on returns, however, they continue to believe it is appropriate given current market conditions. The Fund's total market exposure moved to -3.7% by the end of the month. ARCO noted that, at current stock prices, they have become more defensive with the portfolio settings for investors as they seek to protect capital from the higher downside risk of the market. |
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Performance Report: Paragon Australian Long Short Fund
9 Nov 2017 - Australian Fund Monitors
The Paragon Australian Long Short Fund returned +14.0% in October, taking performance over the last 3 months to +30.9%.
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9 Nov 2017 - 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 | Positive contributors included long holdings in the Fund's Electric Vehicle theme (CleanTeq, Kidman and Orocobre) along with Aristocrat, Agrimin, Link Financial, Macquarie, New Century Zinc, Cimic, Wattle Health, Cann Group and Global Energy Ventures. Detractors included Updater, Lend Lease and Lynas. At the end of the month the Fund had 39 long and 15 short positions. Paragon noted that FY18 has commenced strongly, with performance driven by their thematic-led, high-conviction fundamental stock picks delivering as anticipated. Despite several stocks already rerating, Paragon sees attractive risk-reward in these key long positions, along with others yet to rerate boasting near term catalysts and remaining well placed to deliver. |
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Fund Review: ARCO Absolute Trust October 2017
9 Nov 2017 - Australian Fund Monitors
Read the latest Fund Review on ARCO Absolute Trust.
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9 Nov 2017 - Fund Review: ARCO Absolute Trust October 2017
By: Australian Fund Monitors
AFM Fund Review - October 2017 (pdf format)
ARCO ABSOLUTE TRUST (formerly Optimal Australia Absolute Trust)
AFM have released the most recently updated Fund Review on the ARCO Absolute Trust.
We would like to highlight the following aspects of the Fund;
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ARCO Investment Management is a specialist Australian equity investment manager and the Fund has a long/short equity strategy typically with a low but variable net market exposure comprising 40 to 65 stocks broadly selected from within the ASX200.
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The investment team comprising George Colman, Peter Whiting, and Stephen Nicholls bring 100 years combined experience in equity markets.
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The Fund has an annualised return since inception of +8.30%. The Fund's approach to risk is shown by the Sharpe ratio of 1.36 (Index 0.29), Sortino ratio of 2.87 (Index 0.30), both of which are well above the ASX 200 Accumulation Index and has recorded over 79% positive months.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - October 2017 (pdf format)
Fund Review: Bennelong Kardinia Absolute Return Fund October 2017
8 Nov 2017 - Australian Fund Monitors
Latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available.
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8 Nov 2017 - Fund Review: Bennelong Kardinia Absolute Return Fund October 2017
By: Australian Fund Monitors
AFM Fund Review - October 2017 (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 10.89% p.a. with a volatility of 7.01%, compared to the ASX200 Accumulation's return of 5.58% p.a. with a volatility of 13.68%.
- 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 - October 2017 (pdf format)
Fund Review: Bennelong Long Short Equity Fund October 2017
7 Nov 2017 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available.
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7 Nov 2017 - Fund Review: Bennelong Long Short Equity Fund October 2017
By: Australian Fund Monitors
AFM Fund Review - October 2017 (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 16.56% 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 0.98 and 1.64 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - October 2017 (pdf format)
Performance Report: Insync Global Titans Fund
6 Nov 2017 - Australian Fund Monitors
The Insync Global Titans Fund rose +0.85% in September, taking annualised performance since inception in October 2009 to +9.43%.
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6 Nov 2017 - Performance Report: Insync Global Titans Fund
By: Australian Fund Monitors
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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio of typically 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
| Manager Comments | Insync noted that cyclical stocks significantly outperformed quality stocks with the extreme moves mirroring last year's Trump rally. Positive contributors included eBay, Paypal, Visa, Cognizant Tech Solutions and Amadeus IT. The main negative contributors were Medtronic, Reckitt Benckiser, Oracle, Comcast and Heineken. During the quarter, Insync sold its holdings in Bank of New York Mellon and Philip Morris International whilst adding Stryker and Accenture to the portfolio. Insync believe, given the incremental spend on digitisation is forecast to increase by $5 trillion in the 5 years to 2020, the Fund's exposure to the 'Digitisation Megatrend' via its investments in Accenture and Cognizant Tech Solutions is likely to benefit the Fund. The Fund continues to have no foreign currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Over 50% of the Fund is currently protected using Insync's put protection strategy. |
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Performance Report: Quay Global Real Estate Fund
3 Nov 2017 - Australian Fund Monitors
The Quay Global Real Estate Fund increased +1.3% in September. Since inception in July 2014, the Fund has outperformed its benchmark by +5.0% per annum.
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3 Nov 2017 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | The Manager highlighted Life Storage (LSI) as one of the Fund's top performers for the month, noting the significant loss of homes in Houston after Hurricane Harvey all but eliminated any excess supply in the Storage and Apartment markets. Among the largest detractors was American Campus Communities (US) as the company announced slightly weaker leasing headed into the school year, along with a significant acquisition ($590m) of seven student housing properties staged over the next two years. The Manager remains comfortable with their long-term themes including Affordable Accommodation, Healthcare and Storage. For the Mall operators, they noted the general sentiment was that the sell-off has been overdone, with many owners suggesting the worst of the bankruptcies was over. However, the Manager remains cautious for properties not deemed 'best in class'. |
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Performance Report: Touchstone Index Unaware Fund
3 Nov 2017 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +0.39% in September, taking annualised performance over the past 12 months to +9.63%.
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3 Nov 2017 - 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 | Positive performers for the month included Mantra (+8.9%) and Bingo Industries (+4.8%). Detractors included Treasury Wine Estates (-5.5%) and QBE (-4.1%), however, the Manager noted Treasury Wine Estates contributed positively over the quarter (+5.0%). The Manager believes the drivers for an earnings uplift are in place for QBE, with signs that the insurance pricing cycle has turned up. The Manager highlighted the disappointing performance in the Australian equity market compared to global share markets over the past six months. They believe weakness in consumer spending, rising input costs and increased competition will continue to weigh on the outlook for earnings growth. The Manager foresees a challenging FY18 growth outlook for the Banking sector, they also anticipate that a decline in commodity prices will impact the Resources sector's profit outlook. The Manager's view remains unchanged that, given the heightened global uncertainty, the market remains vulnerable to an external shock and as such remain focused on downside protection. |
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Performance Report: Collins St Value Fund
2 Nov 2017 - Australian Fund Monitors
The Collins St Value Fund returned +1.83% in September, taking annualised performance since inception in February 2016 to +20.27%.
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2 Nov 2017 - 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 | Collins St note they spent much of the month investigating potential investment opportunities and continuing their due diligence on companies already owned. The average PE ratio of the Fund's equities holdings is 8.13x versus the market's 17.59x, indicating that the Fund invests in businesses trading at a significant discount to their underlying worth. At the end of the month, the portfolio comprised 80% ASX securities and 20% cash. Collins St noted the slightly larger cash position is due to the Fund having trimmed some of its positions, they believe the Fund remains well placed to take advantage of any opportunities that may arise. The Fund stands out as one of the few with zero management fees, charging performance fees only, ensuring the Manager's interests are aligned with investors'. |
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