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Fund Review: Optimal Australia Absolute Trust July 2017
8 Aug 2017 - Australian Fund Monitors
Read the latest Fund Review on Optimal Australia Absolute Trust.
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8 Aug 2017 - Fund Review: Optimal Australia Absolute Trust July 2017
By: Australian Fund Monitors
AFM Fund Review - July 2017 (pdf format)
OPTIMAL AUSTRALIA ABSOLUTE TRUST
AFM have released the most recently updated Fund Review on the Optimal Australia 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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In July, the Fund returned +0.24%, taking annualised return since inception to 8.12% p.a. The Fund's approach to risk is shown by the Sharpe ratio of 1.32 (Index 0.26), Sortino ratio of 2.71 (Index 0.26), 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 - July 2017 (pdf format)
Bennelong Twenty20 Australian Equities Fund July 2017
8 Aug 2017 - Australian Fund Monitors
Latest Fund Review on Bennelong Twenty20 Australian Equities Fund is now available.
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8 Aug 2017 - Bennelong Twenty20 Australian Equities Fund July 2017
By: Australian Fund Monitors
AFM Fund Review July 2017 (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 July 2017 (pdf format)
Paragon Australian Long Short Fund
8 Aug 2017 - Australian Fund Monitors
The Paragon Australian Long Short Fund has risen +1.5% over the past 3 months, outperforming the ASX All Ordinaries Accumulation Index by +3.6%.
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8 Aug 2017 - Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon believes that markets are not always efficient, exhibiting a common tendency to price securities well outside of their intrinsic value over the medium term. This market characteristic provides the opportunity for Paragon, an active manager with a flexible mandate, to generate superior investment returns over the longer term. Paragon believes that it is critical to understand both the companies and the industries in which they operate, in order to fully comprehend each investment opportunity. Accordingly, a fundamental approach to company research is taken. Assessing the potential downside is also paramount in framing the risk/reward trade-off for potential investments. |
| Manager Comments | Main contributors for July were gains in Agrimin, Global GeoScience, FastBrick Robotics and Lynas and shorts in Coca Cola and Westgold. These were offset by falls in offshore earners on the back of the rallying AUD. At the end of the month the Fund had 38 long positions and 19 short positions. Paragon continue to invest in key themes which typically make up 80% of the Fund's exposure, currently being Offshore Growth, Ageing Population, Electric Vehicles and Mobile Internet. |
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Fund Review: Insync Global Titans Fund July 2017
8 Aug 2017 - Australian Fund Monitors
Latest Fund Review on Insync Global Titans Fund is now available.
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8 Aug 2017 - Fund Review: Insync Global Titans Fund July 2017
By: Australian Fund Monitors
AFM Fund Review - July 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 - July 2017 (pdf format)
Bennelong Long Short Equity Fund
4 Aug 2017 - Australian Fund Monitors
Bennelong's long short fund drops -1.42% in July, but still manages a return of 12.01% for the latest six months, and +17.56% calendar year to date
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4 Aug 2017 - 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 manager's outlook for markets remains cautious. A statistic that caught their eye during the month was the news that the infamous VIX Index or 'fear index' (formerly, the Chicago Board Options Exchange Volatility Index) reached its lowest ever level in its 27 year history causing them to wonder if such complacency justified? Their response: Not according to Howard Marks at Oaktree Capital, who in his latest memo noted: 'The uncertainties are unusual in terms of number, scale and insolubility in areas including secular economic growth; the impact of central banks; interest rates and inflation; political dysfunction; geopolitical trouble spots; and the long-term impact of technology.' |
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Touchstone Index Unaware Fund
1 Aug 2017 - Australian Fund Monitors
The Touchstone Index Unaware Fund ended the financial year up +17.03%, outperforming the ASX300 Accumulation Index by +3.21%.
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1 Aug 2017 - 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 | In June, positive performers included IAG (+6.6%), Resmed (+6.7%) and James Hardie (+6.7%). IAG's performance was principally driven by an upgrade to its FY17 earnings and increased confidence in earnings growth. Resmed rallied with positive momentum reported on its new product launches and rectification of recent product issues. James Hardie performed positively as the market gained confidence that the factors impacting margins for their US Fibre-Cement division should improve going forward. Negative contributors for the month included QBE (-8.5%), Wesfarmers (-6.0%) and Goodman Group (-5.9%). Touchstone maintains a positive outlook for Wesfarmers and Goodman Group, and expects that QBE will benefit from a recovery in the global insurance market and higher interest rates. Touchstone noted that volatility has edged back into markets as fears over tighter monetary policy and high valuations have clouded the outlook for the year ahead. The Manager believes that given the heightened uncertainty, the market remains very vulnerable to external shocks. As such, they remain cautious and have reflected this in their portfolio positioning. |
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Bennelong Twenty20 Australian Equities Fund
31 Jul 2017 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +1.07% in June, taking 12-month performance to +13.93%.
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31 Jul 2017 - 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 | Outperformance over the past quarter was largely explained by a number of the larger positions with active allocations, including Aristocrat Leisure which represented by far the largest contributor and is benefiting from management's five year journey to re-energise the business. Other contributors included Fisher & Paykel Healthcare, a manufacturer of breathing support devices, BWX, a manufacturer of skin care creams, and Reliance Worldwide, a manufacturer of plumbing products and water control valves. The largest detractor to performance was Domino's Pizza Enterprises, however, Bennelong believes the stock offers attractive longer term returns. Bennelong are concerned that a major issue with the Australian market approaching reporting season is earnings risk if companies miss the market's expectations. Based on company meetings and industry contact, their belief is that many corporates are doing it tougher than is appreciated by the market. If correct, the assumed E in the current P/E ratio (15.8x) is too high and in reality the PE is actually higher. However, the current attraction of equities depends on the future direction of interest rates. |
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Collins St Value Fund
28 Jul 2017 - Australian Fund Monitors
The Collins St Value Fund rose 6.13% in June, taking 12 month performance to +22.44%.
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28 Jul 2017 - 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 that the Fund's PE ratio (based on the weighted average of all stocks in the portfolio) at the end of June was 9.21 whilst that of the market was 17.27, underlying the Fund's strategy of investing in businesses priced cheaply relative to the market. As at the end of June the Fund's cash holdings decreased to 22% from 28% at the end of May. Sirtex (ASX: SRX) contributed positively to the Fund's performance whilst the manager re-entered a position in Cash Converters (ASX: CCV) which had previously been closed out at a loss and had contributed negatively. The Manager believes that both companies remain well positioned for growth. Looking forward Collins St see a number of issues which cause them concern, including high market valuations, a stretched property market, and high levels of consumer debt. |
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Paragon Australian Long Short Fund
27 Jul 2017 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose 0.4% in June, outperforming the S&P/ASX200 Accumulation Index by 0.23%.
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27 Jul 2017 - Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon believes that markets are not always efficient, exhibiting a common tendency to price securities well outside of their intrinsic value over the medium term. This market characteristic provides the opportunity for Paragon, an active manager with a flexible mandate, to generate superior investment returns over the longer term. Paragon believes that it is critical to understand both the companies and the industries in which they operate, in order to fully comprehend each investment opportunity. Accordingly, a fundamental approach to company research is taken. Assessing the potential downside is also paramount in framing the risk/reward trade-off for potential investments. |
| Manager Comments | The main contributors to the positive result in June were gains in Link Administration, James Hardie, Collins Foods, Updater and Audinate, plus short positions in Stockland and Metals X. At the end of the month the Fund had 36 long positions and 19 short positions. Many of the Fund's strongest performers from FY15 and FY16 partially retreated mainly as a result of market rotation, along with some specific issues, and citing as an example Netcomm Wireless, which had contributed 9% of the Fund's gross performance in FY16 (when the Fund returned a net 37%) giving back 1.7% in FY17. |
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NWQ Fiduciary Fund
27 Jul 2017 - Australian Fund Monitors
NWQ Fiduciary Fund returned +0.86% in June, taking the Fund's annualised performance since inception in May 2013 to +5.92%.
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27 Jul 2017 - 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 | Performance of the Fund's underlying managers was broad-based, with nine of the ten delivering a positive return. The Fund's returns were largely driven by its underlying Alpha managers, which collectively contributed +0.75% to overall performance. This performance was complemented by Beta managers, which contributed a solid +0.19%. |
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