NEWS
Bennelong Twenty20 Australian Equities Fund
25 Jan 2017 - Australian Fund Monitors
Bennelong Twenty20 Australian Equities Fund returned +2.62% in December to take the latest 6 months return to 8.42%.
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25 Jan 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 | The largest contributors to the year's performance were Fortescue Metals Group, Newcrest, Vocus Communications and Flight Centre. The main detractors included TPG Telecom, Domino's Pizza Enterprises, South32 and Fisher & Paykel Healthcare. Throughout the year, the Fund trimmed or sold out of a number of high PE names, but maintained positions in companies in which the company fundamentals justified doing so. The investment team remains confident that these fundamentals will dictate returns over the long-term and therefore comfortable with the Fund's holdings. In more general terms, the Fund benefitted from an underweight position in bond proxies, such as REITs, Infrastructure, and Utilities stocks. On the other hand, the Fund's performance was hindered by an overweight exposure to the Healthcare sector, specifically through positions in Ramsay Health Care and Fisher & Paykel Healthcare, and from its exposure to the Retail sector, where a number of names held underperformed. |
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King Tide NZ/Australian Long/Short Equity Fund
24 Jan 2017 - Australian Fund Monitors
King Tide NZ/Australian Long/Short Equity Fund returned -0.64% in December and +19.17% over the latest 24 months.
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24 Jan 2017 - King Tide NZ/Australian Long/Short Equity Fund
By: Australian Fund Monitors
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| Fund Overview | The fund seeks to outperform the market with less volatility than the market by allocating capital to a select group of eight to sixteen funds whose investment mandates allow them to use short selling of equities and equity indices, to use derivatives to manage risk, to use leverage and to hold large amounts of cash. In-depth proprietary research is used to select and monitor fund managers with particular emphasis on their ability to manage equity market risk through stock selection, short selling and the use of derivatives and cash. |
| Manager Comments | However, LHC was hit by two very large downgrades in two of core its positions; Sirtex and Mayne Pharma which fell 50% and 16% respectively, resulting in a -9.7% fall in the fund. Paragon, Wavestone, Monash, Smallco and Wilson all rose less than 1%, while Bennelong Long/Short, from which the Fund has now fully redeemed, fell -3.2%. The Listed Investment Company (LIC) 8EC's share price was down -0.5% despite their underlying portfolio gaining 2%. The two PIE funds (NZ based funds) were weaker but performed better than the sector once again in 2016. The Fund is considering a couple of funds and plans on adding one new underlying manager on February 1, bringing the total to 16. |
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Fund Review Pengana Absolute Return Asia Pacific Fund December 2016
24 Jan 2017 - Australian Fund Monitors
Latest Fund Review is now available on Pengana Absolute Return Asia Pacific Fund, which has an annualised return of 8.56% p.a.
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24 Jan 2017 - Fund Review Pengana Absolute Return Asia Pacific Fund December 2016
By: Australian Fund Monitors
AFM Fund Review - December 2016 (pdf format)
PENGANA ABSOLUTE RETURN ASIA PACIFIC FUND
Attached is our most recently updated Fund Review on the Pengana Absolute Return Asia Pacific Fund.
- The Pengana Absolute Return Asia Pacific Fund ("PARAP") was established in 2008 by portfolio managers Antonio Meroni and Vikas Kumra. The Fund is a feeder fund into a Cayman Islands AUD share class fund.
- The Fund invests both long and short in Asia Pacific equities, including in Australian and New Zealand, after a stock specific "event" has either occurred or been announced and the portfolio aims to be uncorrelated to the underlying equity markets. A combination of the Manager's experience, thorough research and continuous back- testing identify the most attractive of these events.
- Risk controls include limits on individual positions as well as gross and net exposure. Limits are in place for option exposure and cash borrowing, with stop loss limits on individual positions. Overall the manager is looking to derive returns from the event strategies as opposed to any currency or market exposures.
- Since inception, the Fund has an annualised return of 8.56% p.a., compared to the MSCI ACWI Asia Pacific Price Index's return of 2.86% p.a.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - December 2016 (pdf format)
Fund Review: Optimal Australia Absolute Trust December 2016
23 Jan 2017 - Australian Fund Monitors
Read the latest Fund Review on Optimal Australian Absolute Trust.
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23 Jan 2017 - Fund Review: Optimal Australia Absolute Trust December 2016
By: Australian Fund Monitors
AFM Fund Review - December 2016 (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;
- Optimal Australia 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.
- The investment team comprising George Colman, Peter Whiting, and Stephen Nicholls bring nearly 100 years combined experience in equity markets.
- In October, the Fund rose 0.29% in December, to take annualised return since inception to 8.54% p.a. The Fund's approach to risk is shown by the Sharpe ratio of 1.39 (Index 0.25), Sortino ratio of 2.92 (Index 0.24), both of which are well above the ASX 200 Accumulation Index and has recorded 80% positive months.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - December 2016 (pdf format)
QATO Capital Market Neutral Long/Short Fund
23 Jan 2017 - Australian Fund Monitors
Qato Capital Market Neutral Long/Short Fund returned +0.70% for the month of December.
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23 Jan 2017 - QATO Capital Market Neutral Long/Short 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 with 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. |
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NWQ Fiduciary Fund
20 Jan 2017 - Australian Fund Monitors
NWQ Fiduciary Fund returned -0.86% in December.
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20 Jan 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. |
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Bennelong Long Short Equity Fund
20 Jan 2017 - Australian Fund Monitors
Bennelong Long Short Equity Fund returned -3.23% in December and +19.22% for the latest 24-months.
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20 Jan 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. |
| Manager Comments | In December, the Fund made several stocks and weightings changes in line with the investment team's assessment of risk and reward. However, on the whole, the Fund maintained its core stocks/strategies as the team continues to see them delivering positive performance in the future. The top 3 spreads for the month came from the following pairs; Long Oil Search/Short Santos, Long Qantas/Short Flight Centre and Long CSL/Short Sonic Health. The bottom 3 spreads came from long Ramsay Health/Short Primary Healthscope, Long Star Entertainment/Short Metcash/Woolworths and Long Resmed/Short Ansell. |
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Touchstone Index Unaware Fund
19 Jan 2017 - Australian Fund Monitors
Touchstone Index Unaware Fund rose +4.42% in December, slightly ahead of the market rise of 4.38% (S&P/ASX 200 Accumulation Index).
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19 Jan 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 | The Fund's position in Star Entertainment Group (SGR) traded lower over the month and quarter (-2.1% mom, -14.1% qoq), after a partial recovery in November. The Fund continues to hold SGR given its strong growth outlook and solid balance sheet. The high level of cash was a drag in the quarter however, the Fund is currently comfortable with its holding. The investment team believes the Fund is well-positioned, considering the extended financial asset valuations and the heightened geopolitical and economic uncertainty going forward. |
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KIS Asia Long Short Fund
19 Jan 2017 - Australian Fund Monitors
KIS Asia Long Short Fund returned -0.42% in December, taking the return for the most recent 12 months to 13.46%.
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19 Jan 2017 - 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 | December result was driven largely by the long positions in XREF Ltd (XF1.AX) 0.21%, Actinogen Medical Ltd (ACW.AX) 0.20% and Boral Ltd (BLD.AX) 0.14%. Detractors for the month included short positions in Cover-More Group Ltd (CVO.AX) -0.18%, Metcash Ltd (MTS.AX) -0.18% and AGL Energy Ltd (AGL.AX) -0.16%. |
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Pengana Absolute Return Asia Pacific Fund
18 Jan 2017 - Australian Fund Monitors
Pengana Absolute Return Asia Pacific Fund finished up +0.37% for the month of December 2016, compared to Asia Pacific markets which fell -0.46% for the month and -3.4% for the final quarter of 2016.
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18 Jan 2017 - 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 | The Fund's greatest contributions for the month came from Australia and Singapore, with M&A being the most successful strategy. No significant changes were made to the structure of the portfolio during the course of the month. Gross exposures to the 5 key strategies of M&A, Capital Structure, Capital Management, Credit. and Stubs were maintained and, from a regional perspective, Hong Kong, and Japan remained the markets in which the Fund was most heavily invested. The biggest performance detractors came from the Capital Structure and Index Futures strategies. For the month, the Fund's net and gross exposure averaged 13.8% and 223.3% respectively. |
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