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11 Dec 2020 - Performance Report: Cyan C3G Fund
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Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
Manager Comments | The Fund's holdings performed very well across the board in November. Top contributors included Readcloud (RCL), Raiz (RZI), Alcidion (ALC) and Quickstep (QHL). In Cyan's view, the most significant recent event has been the RBA's decision to cut interest rates to 0.1%. They believe the lowered interest rate makes asset classes other than term deposits and money market securities increasingly attractive. They noted that, while some pockets of the market have struggled, market optimism remains intact as evidenced by the recent 60% premium on the largest IPO of the year - Nuix. |
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10 Dec 2020 - Manager Insights | DS Capital
Damen Purcell, COO of Australian Fund Monitors, speaks with Rodney Brott, CEO & Executive Director of DS Capital. DS Capital is a Melbourne based boutique investment manager. Their fund, the DS Capital Growth Fund was started in early in 2013 and aims to deliver an average return of at least 10% per annum through the economic cycle with a focus on preserving capital. As at the end of November 2020, the DS Capital Growth Fund had returned +15.64% p.a. with an annualised volatility of 11.47% since inception in January 2013. By contrast, the ASX200 Accumulation Index had returned +8.82% p.a. with an annualised volatility of 14.10% over the same period. The Fund's capacity to protect investors' capital in falling markets is highlighted by its Sortino ratio of 1.75 vs the Index's 0.66 and down-capture ratio of 45%. Listen to this interview as a podcast |
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9 Dec 2020 - Fund Review: Bennelong Kardinia Absolute Return Fund November 2020
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.
- 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 8.74% p.a. with a volatility of 7.68%, compared to the ASX200 Accumulation's return of 5.94% p.a. with a volatility of 14.52%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Kristiaan Rehder and Stuart Larke 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.
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8 Dec 2020 - Performance Report: Bennelong Long Short Equity Fund
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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 Fund returned -2.95% in November. Bennelong noted a reversal in momentum in the market over the past couple of months has been presenting headwinds for some of the Fund's pairs. The bottom pairs in November were all very positive in the preceding year. Bennelong believe, to some extent, their performance reflects the market chasing laggards in the midst of a booming market. The Energy and Bank sectors experienced the greatest momentum reversal, however this didn't significantly influence the portfolio which had a modest positive return from its Energy pairs and a modest negative return from its one Bank pair. The tech sector was a laggard during the month, however the Fund's one Tech pair, XRO/TNE, was the top contributor. REH/BLD, FBU was amongst the weakest pairs. |
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7 Dec 2020 - Staying Overweight Japan
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4 Dec 2020 - Hedge Clippings | 04 December 2020
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4 Dec 2020 - Performance Report: Surrey Australian Equities Fund
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Fund Overview | The Investment Manager follows a defined investment process which is underpinned by detailed bottom up fundamental analysis, overlayed with sectoral and macroeconomic research. This is combined with an extensive company visitation program where we endeavour to meet with company management and with other stakeholders such as suppliers, customers and industry bodies to improve our information set. Surrey Asset Management defines its investment process as Qualitative, Quantitative and Value Latencies (QQV). In essence, the Investment Manager thoroughly researches an investment's qualitative and quantitative characteristics in an attempt to find value latencies not yet reflected in the share price and then clearly defines a roadmap to realisation of those latencies. Developing this roadmap is a key step in the investment process. By articulating a clear pathway as to how and when an investment can realise what the Investment Manager sees as latent value, defines the investment proposition and lessens the impact of cognitive dissonance. This is undertaken with a philosophical underpinning of fact-based investing, transparency, authenticity and accountability. |
Manager Comments | Surrey made numerous adjustments to the portfolio during the month, including adding to their larger holdings such as Auckland International Airport and Mineral Resources while introducing new names into the Fund such as AP Aegers. They discuss some of their changes in further detail in their latest report. The Fund ended November with 31 individual holdings and 2% in cash. Surrey noted the portfolio overall continues to be positioned for positive risk adjusted returns over the long-term. Surrey remain positive on the outlook driven by COVID-19 recovery, fiscal and monetary stimulus, low inflation, refreshed balance sheets, re-energised management teams and continued low government bond yields. |
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3 Dec 2020 - Performance Report: Ark Global Fund - Class B AUD Unhedged
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Fund Overview | The investment objective of the Fund is to achieve long-term capital appreciation with low correlation to global equity markets through investment in the Underlying Fund. Fund One is a global macro fund that utilises quantitative research including machine learning techniques and fully automated trading algorithms which will aim to generate positive uncorrelated returns relative to any significant equity benchmark. The traded instruments are either major FX pairs or the most liquid exchange traded stock index, bond, and commodity futures across North America, Europe and Asia Pacific. The algorithm backtests over 10 years of tick data and in order to do so effectively requires machine learning to filter noise and identify meaningful signals, which results in statistically significant prediction of price movements. In production this processing is done in real time and the portfolio reacts to asset movements by rebalancing automatically to the desired risk exposure through the market impact optimised execution logic. Risk management layers built into the algorithm have been developed using the experience the team has gained from their decades in highly liquid fast-moving markets in the proprietary High Frequency Trading world. This allows the system to trade autonomously but safely to all trading opportunities and potential system issues, and to alert the team to any behaviour outside of strictly controlled bounds. The Fund is a 'feeder fund' which indirectly gains exposure to the underlying assets by investing all or substantially all of its assets in the Underlying Fund. The Fund may retain a certain amount of cash from the investment in the Fund for the purpose of payment of costs, fees, hedging and expenses. |
Manager Comments | The best performing assets for the month were: Nikkei 225 (+1.33% of NAV), Silver (+1.20% of NAV) and 10 Yr Japanese Govt Bond (+1.18% of NAV). The worst performing assets included: Gold (-1.23% of NAV), 10 Yr Canadian Govt Bond (-1.48% of NAV) and Euro Stoxx (-2.13% of NAV). |
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3 Dec 2020 - Performance Report: Touchstone Index Unaware Fund
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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 | As at the end of October, the Fund held 20 stocks with a median position size of 5%. The portfolio's holdings had an average forward-year price/earnings of 21.6, forward-year tangible ROE of 9.4% and forward-year dividend yield of 2.6%. The Fund ended the month with a cash weighting of 1.1%, down from 3.2% as at the end of September. |
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3 Dec 2020 - Performance Report: The Airlie Australian Share Fund
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Fund Overview | The Fund is long-only with a bottom-up focus. It has a concentrated portfolio of 15-35 stocks (target 25). Maximum cash holding of 10% with an aim to be fully invested. Airlie employs a prudent investment approach that identifies companies based on their financial strength, attractive durable business characteristics and the quality of their management teams. Airlie invests in these companies when their view of their fair value exceeds the prevailing market price. It is jointly managed by Matt Williams and Emma Fisher. Matt has over 25 years' investment experience and formerly held the role of Head of Equities and Portfolio Manager at Perpetual Investments. Emma has over 8 years' investment experience and has previously worked as an investment analyst within the Australian equities team at Fidelity International and, prior to that, at Nomura Securities. |
Manager Comments | At month-end, the portfolio's top positions included Aurizon Holdings, BHP Group, Coles Group, CBA, CSL, Macquarie Group, Mineral Resources, Pacific Current Group, Wesfarmers and Westpac Banking Corporation. The top sectors in the portfolio were Financials (27% of the portfolio), Consumer Discretionary (15%), and Health Care (10%) and Industrials (10%). |
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