NEWS
27 Apr 2022 - Fund Review: Bennelong Long Short Equity Fund March 2022
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-caps from the ASX/S&P100 Index, with over 20-years' track record and an annualised return of 12.98%.
- The consistent returns across the investment history highlight 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 0.75 and 1.13 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - March 2022 (pdf format)
27 Apr 2022 - The Experience Megatrend
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The Experience Megatrend Insync Fund Managers April 2022 Travel. Remember that? Long plane flights, new places, new people, new ways, new sounds. Whilst many of us look forward to travel once more, is it time to invest in travel? At Insync we believe yes but...... it all depends on how and where.
The Experience Megatrend, of which travel is a component, is one of 16 megatrends in the Insync portfolio. Like a giant tidal wave, megatrends tend to be very large, long lived and unstoppable. Therefore, it is unusual for us to sell out of stocks benefitting from megatrends. However, after an extended period of lockdowns and travel restrictions from a one-off global event reaching into the very heart of travel, it had become clear to us that the nature of travel was going to change in the post Covid world. We sold out of the pure play travel companies and studied deeper into what was probable in the years to come in travel. The extent of the fall in travel has been unprecedented as seen in this next chart. Destinations worldwide lost a staggering 1 billion fewer international arrivals in 2020 than in 2019. This compares with the 4% decline recorded during the 2009 global economic crisis (GFC).
Unquestionably, an individual's deep desire to travel is hardwired into human DNA- a developed and privileged means of human wandering. Whilst we cannot know how long the pandemic will last, we are certain that when it is once again safe to travel, people's desire to travel will boom once again. However, the pandemic has changed the playing field around traveller behaviour and habits, and this impacts the businesses involved with travel in a myriad of ways. New expectations have emerged, prompting travel providers to take heed and reassess how they cater to those shifting demands. Therefore, the winners - those that can deliver high ROIC and sustainable growth, in travel post-covid, are not yet clear. Some recent trends in travel habits we have been observing include:
The one area that is highly likely to change structurally, and in a negative way, is corporate travel. As many businesses have now transitioned into a hybrid work environment, with remote working and meeting tools normalising, there's no question that businesses will look to lower costs and travel risks. Mckinsey estimate that business travel will recover to only around 80% of pre-pandemic levels by 2024. This is important to businesses such as airlines and hotels et al, as business travellers represent a large and profitable part of the travel sector. Notwithstanding the human desire to travel, we will see fundamental changes in travel patterns compared to the pre-Covid world. Cruise ships, airlines and hotels might seem like the obvious way to invest in a travel rebound. However, these companies are the higher risk, higher reward options and are a lot less profitable through the cycle. They are capital intensive and highly leveraged by nature. For travel booking engines the future remains unclear. Should a new deadlier viral variant emerge post the delta variant, the recovery would be pushed out again with 'pure' travel stocks facing a sudden price setback. Insync is focused on identifying profitable winners in the travel megatrend in the post Covid world. Sometimes the winning companies are the less obvious ones. Estee Lauder and Walt Disney represent two examples of highly profitable businesses in the Insync portfolio that are beneficiaries of the recovery and long-term resumption of secular growth in experiences and travel.
Estee Lauder is a highly profitable company benefiting from the wellness and beautification global megatrend. The pandemic with its restrictions and uncertainties has not slowed Estee's rise. Premium skin care continues to grow at multiples of global GDP with the online channel representing circa 40% of their sales in key markets. Travel retail represents 25% of Estee's sales, and this is during the pandemic. In places where travel has resumed, such as China, sales have also recovered quickly. What is remarkable is that despite the collapse in global airline travel consumption the travel channel for Estee has been resilient, declining in only one out of the past six quarters through the pandemic.
Walt Disney's global entertainment focus has produced a variety of interwoven income streams that has seen it do well during the pandemic, and importantly for the recovery, things look even brighter. Walt Disney is also a major beneficiary of the Streaming Megatrend, building as many subscribers in 2 years that Netflix took 10 years to achieve. It is also a major beneficiary of a rebound in the Experiences Megatrend. Disney has a loyal following of customers with parents trusting the brand to provide clean, safe entertainment for their children. Families can plan a vacation at a Disney theme park as their ideal getaway. As a result, Disney has a history of raising prices with no slowdown in customer demand. By example, a Disney World Magic Kingdom Park ticket has more than tripled in price since 2001 (well above inflation), yet every year attendance has continuously increased with the exception of 2020/21 coronavirus lockdown. This trend is highly likely to resume as lockdowns ease. Funds operated by this manager: Insync Global Capital Aware Fund, Insync Global Quality Equity Fund Disclaimer |
26 Apr 2022 - Performance Report: Glenmore Australian Equities Fund
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | The Glenmore Australian Equities Fund has a track record of 4 years and 10 months and therefore comparison over all market conditions and against its peers is limited. However, the fund has outperformed the ASX 200 Total Return Index since inception in June 2017, providing investors with an annualised return of 25.11% compared with the index's return of 9.95% over the same period. On a calendar year basis, the fund hasn't experienced any negative annual returns in the 4 years and 10 months since its inception. Over the past 12 months, the fund's largest drawdown was -8.65% vs the index's -6.35%, and since inception in June 2017 the fund's largest drawdown was -36.91% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in October 2019 and lasted 1 year and 1 month, reaching its lowest point during March 2020. The fund had completely recovered its losses by November 2020. The Manager has delivered these returns with 7.25% more volatility than the index, contributing to a Sharpe ratio which has only fallen below 1 once over the past four years and which currently sits at 1.11 since inception. The fund has provided positive monthly returns 90% of the time in rising markets and 39% of the time during periods of market decline, contributing to an up-capture ratio since inception of 232% and a down-capture ratio of 101%. |
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26 Apr 2022 - Fund Review: Bennelong Twenty20 Australian Equities Fund March 2022
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 - March 2022 (pdf format)
26 Apr 2022 - Hedging against inflation - gold or real estate?
25 Apr 2022 - Performance Report: Insync Global Quality Equity Fund
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| Fund Overview | Insync invests in a concentrated portfolio of high quality companies that possess long 'runways' of future growth benefitting from Megatrends. Megatrends are multiyear structural and disruptive changes that transform the way we live our daily lives and result from a convergence of different underlying trends including innovation, politics, demographics, social attitudes and lifestyles. They provide important tailwinds to individual stocks and sectors, that reside within them. Insync believe this delivers exponential earnings growth ahead of market expectations. Insync screens the universe of 40,000 listed global companies to just 150 that it views as superior. This includes profitability, balance sheet performance, shareholder focus and valuations. 20-40 companies are then chosen for the portfolio. These reflect the best outcomes from further analysis using a proprietary DCF valuation, implied growth modelling, and free cash flow yield; alongside management, competitor, and industry scrutiny. The Fund may hold some cash (maximum of 5%), derivatives, currency contracts for hedging purposes, and American and/or Global Depository Receipts. It is however, for all intents and purposes, a 'long-only' fund, remaining fully invested irrespective of market cycles. |
| Manager Comments | The Insync Global Quality Equity Fund has a track record of 12 years and 6 months and has outperformed the Global Equity Index since inception in October 2009, providing investors with an annualised return of 12.86% compared with the index's return of 11.2% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 12 years and 6 months since its inception. Over the past 12 months, the fund's largest drawdown was -17.29% vs the index's -8.41%, and since inception in October 2009 the fund's largest drawdown was -17.29% vs the index's maximum drawdown over the same period of -13.59%. The fund's maximum drawdown began in January 2022 and has lasted 2 months, reaching its lowest point during March 2022. During this period, the index's maximum drawdown was -8.41%. The Manager has delivered these returns with 1.36% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.92 since inception. The fund has provided positive monthly returns 82% of the time in rising markets and 21% of the time during periods of market decline, contributing to an up-capture ratio since inception of 83% and a down-capture ratio of 82%. |
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25 Apr 2022 - New Funds on Fundmonitors.com
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New Funds on FundMonitors.com |
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Below are some of the funds we've recently added to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research, platform availability, and news & insights. |
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Salt NZ Dividend Appreciation Fund |
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Salt Sustainable Global Shares Fund |
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Salt Sustainable Income Fund |
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22 Apr 2022 - Hedge Clippings |22 April 2022
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Hedge Clippings | Friday, 22 April 2022
At the end of last year Hedge Clippings' headline was "Certainty in Uncertain Times," as we speculated that inflation was here and now, but with uncertainty whether it was transitory or not. We also knew that interest rates were going to rise, but how soon, and by how much, still seemed unclear. Four months later, and the times seem more certain and uncertain than ever: The outlook for inflation seems clearer, higher, and more certain, while interest rates - at least based on Jerome Powell's overnight comments - are likely to rise by 50 bps at the Fed's meeting in May. Thanks to the election, the RBA is unlikely to move prior to June, but there are strong expectations for 2 or possibly 3 more moves prior to the end of the year. The longer term question will be the balance between rising rates taming inflation (much of which is global, supply chain induced or driven by the war in Ukraine) before damaging the economy, with predictions of a recession in the US by 2024. The tech heavy Nasdaq is now below its level of 12 months ago, confirming that the valuations assigned to the so called "growth" sector are a thing of the past (even leaving aside the difficulties experienced by Netflix this week). The broader S&P500 is faring better, but still well below its December peak, while locally the ASX200 still hovers close to it - for the moment. Politically, both locally and globally, uncertainty seems entrenched. With no clear end in sight, the war in Ukraine will both stretch on, and even assuming a cease fire, will stretch relations between NATO and Russia. Locally, the outcome of the Federal election on May 21 is likely to lead to further uncertainty on the domestic front. In this environment, manager and fund selection is more critical than ever, as is diversification across strategies, sectors and geographic mandates. News & Insights Airlie Insight: The dominant narrative of 2022 for stocks | Airlie Funds Management Megatrend in Focus: Enterprise Digitisation is accelerating | Insync Fund Managers Looming French presidential election | 4D Infrastructure |
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March 2022 Performance News Glenmore Australian Equities Fund Delft Partners Global High Conviction Strategy Paragon Australian Long Short Fund Bennelong Twenty20 Australian Equities Fund Insync Global Capital Aware Fund |
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22 Apr 2022 - Performance Report: Paragon Australian Long Short Fund
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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 | The Paragon Australian Long Short Fund has a track record of 9 years and 1 month and has outperformed the ASX 200 Total Return Index since inception in March 2013, providing investors with an annualised return of 13.78% compared with the index's return of 8.75% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 9 years and 1 month since its inception. Over the past 12 months, the fund's largest drawdown was -27.05% vs the index's -6.35%, and since inception in March 2013 the fund's largest drawdown was -45.11% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in January 2018 and lasted 2 years and 7 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by August 2020. The Manager has delivered these returns with 12.27% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past five years and which currently sits at 0.57 since inception. The fund has provided positive monthly returns 69% of the time in rising markets and 46% of the time during periods of market decline, contributing to an up-capture ratio since inception of 107% and a down-capture ratio of 82%. |
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22 Apr 2022 - Performance Report: Delft Partners Global High Conviction Strategy
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| Fund Overview | The quantitative model is proprietary and designed in-house. The critical elements are Valuation, Momentum, and Quality (VMQ) and every stock in the global universe is scored and ranked. Verification of the quant model scores is then cross checked by fundamental analysis in which a company's Accounting policies, Governance, and Strategic positioning is evaluated. The manager believes strategy is suited to investors seeking returns from investing in global companies, diversification away from Australia and a risk aware approach to global investing. It should be noted that this is a strategy in an IMA format and is not offered as a fund. An IMA solution can be a more cost and tax effective solution, for clients who wish to own fewer stocks in a long only strategy. |
| Manager Comments | The Delft Partners Global High Conviction Strategy has a track record of 10 years and 8 months and has outperformed the Global Equity Index since inception in August 2011, providing investors with an annualised return of 14.89% compared with the index's return of 13.61% over the same period. On a calendar year basis, the strategy has experienced a negative annual return on 2 occasions in the 10 years and 8 months since its inception. Over the past 12 months, the strategy's largest drawdown was -5.7% vs the index's -8.41%, and since inception in August 2011 the strategy's largest drawdown was -13.33% vs the index's maximum drawdown over the same period of -13.19%. The strategy's maximum drawdown began in February 2020 and lasted 1 year, reaching its lowest point during July 2020. The strategy had completely recovered its losses by February 2021. The Manager has delivered these returns with 1.36% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past five years and which currently sits at 1.1 since inception. The strategy has provided positive monthly returns 88% of the time in rising markets and 13% of the time during periods of market decline, contributing to an up-capture ratio since inception of 100% and a down-capture ratio of 92%. |
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