NEWS
Optimal Australia Absolute Trust
10 Oct 2016 - Australian Fund Monitors
The Optimal Australia Absolute Trust recorded a net return of 0.56% in September.
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10 Oct 2016 - Optimal Australia Absolute Trust
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. |
| Manager Comments | The Fund enjoyed strong gains in stocks such as Orica and Aurizon that have been beaten up by exposure to the commodity complex, and which offered very substantial valuation discounts and/or self-help stories. However, the Fund's holding in Hendersons and Clydesdale Bank was a substantial drag on performance during the month, but have done much better so far in October. At month-end, the Fund had a gross exposure of 94.6% and net exposure 3.8%. Click below to read the latest Fund monthly report. |
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Bennelong Long Short Equity Fund
7 Oct 2016 - Australian Fund Monitors
Bennelong Long Short Equity Fund returned -1.06% in September but is up +30.13% for the latest 24-months.
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7 Oct 2016 - 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 | The Fund's performance was hit by their holding in the telco pair of Long TPG Telecom / Short Telstra, following the release of TPG's 2016 earnings results. While the reported results were in-line with expectations, the 2017 profile guidance from the company disappointed investors, falling approximately 7% short of the market estimate. For the month, the top three spreads for the month were long Oil Search / short Santos, long Crown Resorts / short Skycity Entertainment, and long Challenger/ short ANZ. The bottom three spreads for the month were long TPG Telecom / short Telstra, long Bluescope / short Sims Metal and long James Hardie / short CSR Limited. Click below to read the Fund Manager's commentary and market outlook. |
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Fund Review: QATO Capital Market Neutral Long/Short Fund August 2016
4 Oct 2016 - Australian Fund Monitors
Latest Fund Review is now available on QATO Capital Market Neutral Long/Short Fund, investing exclusively in S&P/ASX 100 stocks.
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4 Oct 2016 - Fund Review: QATO Capital Market Neutral Long/Short Fund August 2016
By: Australian Fund Monitors
AFM Fund Review - August 2016 (pdf format)
QATO Capital Market Neutral Long/Short Fund
Attached is our most recently updated Fund Review on the QATO Capital Market Neutral Long/Short Fund.
We would like to highlight the following aspects of the Fund;
- Qato Capital is a Melbourne-based boutique fund manager backed by single family office, Larkfield Funds Management.
- Qato has a systematic, market-neutral strategy which invests exclusively in S&P/ASX 100 stocks.
- The QATO Capital's Q-score process captures and quantifies six broad fundamental factors, which assess multiple underlying sub-categories. Those companies with the top score (quality companies) are included in the "long" portfolio, those with the lowest score are sold short.
- The Fund seeks to preserve capital and maximises absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks through 30 S&P/ASX-100 positions (15 long & 15 short equally-weighted positions).
- Qato Capital's process is entirely systematic - stock selection and risk management are employed in a rules-based approach. The Fund employs no financial leverage/gearing to purchase securities, no derivatives, and no financial products to imitate leverage.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - August 2016 (pdf format)
Fund Review: Insync Global Titans Fund August 2016
3 Oct 2016 - Australian Fund Monitors
Latest Fund Review on Insync Global Titans Fund is now available.
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3 Oct 2016 - Fund Review: Insync Global Titans Fund August 2016
By: Australian Fund Monitors
AFM Fund Review - August 2016 (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 Fund's unit price increased by 0.5% in August. The performance was driven by positive contributions from the holdings in Visa, Microsoft, Time Warner, eBay and Oracle Corp. The main negative contributors were BAT, Comcast, Roche and Mead Johnson Nutrition.
- 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 - August 2016 (pdf format)
Fund Review Pengana Absolute Return Asia Pacific Fund August 2016
30 Sep 2016 - Australian Fund Monitors
Latest Fund Review is now available on Pengana Absolute Return Asia Pacific Fund, which has over 7 years of positive track record and an annualised return of 8.83% p.a.
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30 Sep 2016 - Fund Review Pengana Absolute Return Asia Pacific Fund August 2016
By: Australian Fund Monitors
AFM Fund Review - August 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 8.70% p.a., compared to the MSCI ACWI Asia Pacific Price Index's return of 3.80% p.a.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - August 2016 (pdf format)
Insync Global Titans Fund
29 Sep 2016 - Australian Fund Monitors
The Insync Global Titans Fund returned +0.5%, compared to the MSCI All Country World ex-Australia Net Total Return Index in $A, which returned 1.60%.
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29 Sep 2016 - 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 | The performance was driven by positive contributions from the holdings in Visa, Microsoft, Time Warner, eBay and Oracle Corp. The main negative contributors were BAT, Comcast, Roche and Mead Johnson Nutrition. The Fund returned to having no foreign currency hedging in place during the month as Insync considers the main risks to the Australian dollar to be on the downside. Click below to read the latest Fund Manager Report. |
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QATO Capital Market Neutral Long/Short Fund
28 Sep 2016 - Australian Fund Monitors
Qato Capital Market Neutral Long/Short Fund returned -0.96% in August, outperforming the S&P/ASX-100's return of -2.37%, by 1.41%.
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28 Sep 2016 - QATO Capital Market Neutral Long/Short Fund
By: Australian Fund Monitors
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| Fund Overview | The fund targets a net market exposure of 0% to hedge broader market risks through long and short positions. The process is entirely systematic - stock selection and risk management are all employed in a rules based approach. The Market Neutral Long/Short Fund employs no financial leverage, no derivatives and no financial products to imitate leverage. The Investment Manager's three principal investment goals for the Fund are: 1. Market neutral long/short portfolio management with little correlation to equity markets; 2. Over a 3-5 year period, seeking to target annualised volatility of 15% per annum and annualised returns of 15-30% per annum above the Benchmark; Sharpe Ratio 1.0-2.0 and a negative beta to ASX listed equities; and 3. To provide investors with a co-investment opportunity alongside the founding members' investments in the Investment Manager's strategy. |
| Manager Comments | From the short portfolio, AMP Limited contributed +0.49% and QBE Insurance Group contributed +0.17%. AMP missed consensus by -28.78%, closing down -5.7% the following day. QBE missed 5% in NPAT, resulting the stock to be down -6.72%. The long positions in Newcrest Mining and Northern Star and the short position in Flight Centre were the biggest detractors for the month. |
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Pengana PanAgora Absolute Return Global Equities Fund
27 Sep 2016 - Australian Fund Monitors
Pengana PanAgora Absolute Return Global Equities Fund rose 1.74% in August. The Fund has a low systematic risk (beta) to the ASX200 and the MSCI World Indices of 0.08 and 0.09 respectively.
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27 Sep 2016 - Pengana PanAgora Absolute Return Global Equities Fund
By: Australian Fund Monitors
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| Fund Overview | PanAgora believes the best way to find opportunities in the global markets is to combine fundamental analysis with robust quantitative techniques in order to filter the investment universe and select the investments. The Fund invests primarily in listed equity securities from a global universe of developed markets and a select group of emerging market countries. The Fund's objective is to seek absolute returns by identifying and exploiting multiple inefficiencies that may exist in global equity markets. These inefficiencies are primarily exploited through the use of a long/short equity strategy which aims to construct a portfolio that is generally neutral to market movements. As such the performance of the investment strategy is largely independent of the market's performance. The Fund seeks to achieve its objective by using a diversified set of strategies that have low correlation to one another. In addition, because many of these strategies are designed to generate profit under different market conditions, their combination is expected to result in more stable returns over time than any individual strategy in and of itself. |
| Manager Comments | The Long-Term portfolio contributed 1.85% (net) to the performance of the fund. The portfolio was helped by the poor performance of heavily shorted US names. Most of the Intermediate-term strategies moved sideways in August with the exception of the US M&A sleeve which underperformed moderately. The overall contribution was -0.10% (net). The Short-term portfolio also ended the month slightly down at -0.01% (net). PanAgora continues to introduce new strategies and factors. Click below to read the latest Fund Manager's Report. |
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Touchstone Index Unaware Fund
26 Sep 2016 - Australian Fund Monitors
Touchstone Index Unaware Fund returned +0.30% in August, outperforming the S&P/ASX 300 Accumulation Index which returned -1.56%, by 1.86%.
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26 Sep 2016 - 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 main detractors were the exposures in the insurance sectors, specifically holdings in QBE and IAG. The Fund maintained an average cash position of around 12.5% and continues to maintain a high level of cash. The investment team believes that the Fund is well-positioned in light of extended financial asset valuations in general and given the heightened geopolitical and economic uncertainty going forward. Click below to read in more detail. |
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King Tide NZ/Australian Long/Short Equity Fund
23 Sep 2016 - Australian Fund Monitors
King Tide NZ/Australian Long/Short Equity Fund returned -2.10% in August. Over the latest 24-months, the Fund has risen 20.31%.
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23 Sep 2016 - 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 | Results from the underlying funds were mixed in August. Of their thirteen Australian funds, five made money, three were down and five fell more than the market. The New Zealand managers, PIE (2 funds) and Aspiring, both contributed positively to the month. However, currency cost the Fund 108 bps. At the end of August, King Tide was invested in sixteen underlying funds, the maximum allowance. The weightings ranged between 2% and their largest weighting which is 11%. Click below to read the latest monthly report. |
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