Optimal Australia Absolute Trust

15 Aug 2017 - Australian Fund Monitors

Optimal's Australia Trust weathers currency headlines in July to record a return of +0.24% leading into reporting season...

15 Aug 2017 - Optimal Australia Absolute Trust

By: Australian Fund Monitors

Report Date	11 August 2017
Manager	ARCO Investment Management
Fund Name	Optimal Australia Absolute Trust
Strategy	Equity Long/Short
Latest Return Date	July 2017
Latest Return	0.24%
Latest 6 Months	2.32%
Latest 12 Months	3.51%
Latest 24 Months	12.20%
Annualised Since Inception	8.12%
Inception Date	15 September 2008
FUM (millions)	AU$117
Fund Overview	The investment objective of the Fund is to seek to achieve above average returns in absolute terms, through investing in listed securities in Australia and New Zealand, subject to the overarching requirement of capital preservation. Investments will predominantly be in equity securities but may include fixed interest instruments, money market instruments, derivatives and foreign exchange contracts. 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 Optimal Australia Absolute Trust recorded a positive return of 0.24% in July as the strong Australian dollar impacted the market, particularly stocks with offshore earnings. With the portfolio materially exposed to non-AUD earnings and asset values, it suffered from the strong rise in the local currency, which also hit the broader market. Meanwhile the manager's thinking has not changed much from recent months, citing a 'bubble of complacency' along with evidence of consumer mortgage stress (albeit only in certain demographic pockets) despite interest rates at generational lows, with the general consumer slow-down in the June quarter highlighting the broader sensitivity to interest rates. While generally not fans of the Australian consumer economy, the manager benefited from investments in several retail stocks where the discount to their fair value assessment seemed excessive, and where stock prices in the sector had been heavily influenced by short selling, and a deep fear that no local retail business model will survive Amazon's imminent arrival. The Fund's commodity and energy exposure, while small, also generated positive returns, particularly in the emerging lithium sector, while short positions (barring financials) also made a small positive net contribution to performance in July.
More Information	Fund Profile Manager's Report

MHOR Australian Small Cap Fund

14 Aug 2017 - Australian Fund Monitors

The MHOR Australian Small Cap Fund completes its first year of operation with a strong result of +4.95% for the month, and gaining 10.82% over three months...

14 Aug 2017 - MHOR Australian Small Cap Fund

By: Australian Fund Monitors

Report Date	14 August 2017
Manager	MHOR Asset Management
Fund Name	MHOR Australian Small Cap Fund
Strategy	Equity Long
Latest Return Date	July 2017
Latest Return	4.95%
Latest 6 Months	4.08%
Latest 12 Months	4.60%
Latest 24 Months
Annualised Since Inception	4.60%
Inception Date	01 August 2016
FUM (millions)	AU$17.5
Fund Overview	The MHOR Australian Small Cap Fund aims to outperform the S&P/ASX Small Ordinaries Accumulation Index over a rolling 5-year period after fees and expenses. The portfolio is made up of 25-75 stocks listed on the ASX or NZX. The fund may also invest in stocks to be listed within the next 12 months. The portfolio is constructed to achieve an aggregate exposure that delivers a growth profile that is materially above that of the broader market. The fund may hold between 0% - 50% of its assets in cash. MHOR looks for investment that exhibit the following set of characteristics: -Opportunity - to take advantage of growth and positive alignment with industry themes and trends. -Quality business - competitively advantaged product or service offering. -Financial flexibility - appropriately resourced to capture its opportunity. -Management - with the vision and capability to bring it all together. -Fundamentally undervalued. MHOR also considers labour standards, environmental, social and ethical considerations when making investment decisions but only to the extent that these factors impact the assessment of risk or return. The minimum suggested investment timeframe is 3-5 years.
Manager Comments	July produced a strong result to complete the Fund's first year of operations to return 4.60% over which time the Small Cap sector struggled and declined by -1.09%. As a result the Fund out-performed the small cap benchmark by 5.69%. Commenting on the positive result the Manager noted that in July small caps had outperformed large caps for the third consecutive month, and that the fund had gained 10.82% over the same three months. The Fund's stock holdings remained constant over the month at 31, and by month's end cash holdings were marginally higher at 9.2% of NAV. The portfolio continued to exhibit a growth bias and has considerable exposure to smaller undiscovered stocks, which the manager believes are the future growth stories. At the same time they continue to search and find interesting new and emerging small cap equity opportunities.
More Information	Fund Profile Manager's Report

Fund Review: Optimal Australia Absolute Trust July 2017

8 Aug 2017 - Australian Fund Monitors

Read the latest Fund Review on Optimal Australia Absolute Trust.

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.

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%.

8 Aug 2017 - Paragon Australian Long Short Fund

By: Australian Fund Monitors

Report Date	08 August 2017
Manager	Paragon Funds Management
Fund Name	Paragon Australian Long Short Fund
Strategy	Equity Long/Short
Latest Return Date	July 2017
Latest Return	-0.20%
Latest 6 Months	-8.16%
Latest 12 Months	-23.67%
Latest 24 Months	3.14%
Annualised Since Inception	11.41%
Inception Date	28 February 2013
FUM (millions)	AU$71.8
Fund Overview	The Fund is a concentrated long/short Australian equities product that is fundamentally driven with a focus on the industrial and resource sectors. Paragon's own research process and active portfolio management is overlaid with risk management and an overarching focus on capital preservation. 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 Paragon Australian Long Short Fund fell marginally by -0.2% in July, taking the Fund's 3-month performance to +1.5% and outperforming the ASX All Ordinaries Accumulation Index by +3.6%. 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.
More Information	Fund Profile Manager's Report

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.

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

4 Aug 2017 - Bennelong Long Short Equity Fund

By: Australian Fund Monitors

Report Date	04 August 2017
Manager	Bennelong Long Short Equity Management, a Bennelong boutique
Fund Name	Bennelong Long Short Equity Fund
Strategy	Equity Market Neutral
Latest Return Date	July 2017
Latest Return	-1.42%
Latest 6 Months	12.01%
Latest 12 Months	1.72%
Latest 24 Months	17.61%
Annualised Since Inception	16.70%
Inception Date	01 January 2003
FUM (millions)	AU$419.1
Fund Overview	Bennelong Long Short Equity Management applies a qualitative stock selection process to construct a diversified portfolio of paired securities based on relative value. The Bennelong Long Short Equity Management strategy invests primarily in the S&P/ASX 100 and is dollar neutral at cost. 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 recorded a negative return of -1.42% for July, with the manager noting the strong $A is a near term headwind for the fund as the long portfolio is overweight $US exposed companies relative to the short portfolio. This is an outcome of the manager's fundamental stock picking process, however they expect that in the long term company fundamentals will overwhelm currency fluctuation, but that it can influence short term share price action. Long Qantas / short Flight Centre was the weakest of the loss making pairs as Flight Centre updated guidance to the top of its most recently downgraded guidance range, which triggered a relief rally. At the same time Qantas had a weak month, following a very strong 6 months. Long JB Hi Fi / short Super Retail has been a profitable pair from prior to the disclosure of Amazon's launch in Australia and was the fund's top pair during the month. 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.'
More Information	Fund Profile Manager's Report

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%.

1 Aug 2017 - Touchstone Index Unaware Fund

By: Australian Fund Monitors

Report Date	01 August 2017
Manager	Touchstone Asset Management, A Bennelong Boutique
Fund Name	Touchstone Index Unaware Fund
Strategy	Equity Long
Latest Return Date	June 2017
Latest Return	-0.03%
Latest 6 Months	3.99%
Latest 12 Months	17.02%
Latest 24 Months
Annualised Since Inception	14.77%
Inception Date	04 April 2016
FUM (millions)	AU$4.23
Fund Overview	The Fund aims to deliver capital growth and a sustainable income stream to its investors by investing in a portfolio of primarily listed Australian shares and cash, aiming to provide a total return that exceeds the return of the S&P/ASX300 Accumulation Index by 2% p.a. (before fees and expenses) over a rolling 5 year period. 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 Touchstone Index Unaware Fund ended the year on a flat note, but up +17.03% over the past 12 months, outperforming the ASX300 Accumulation Index by +3.21%. 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.
More Information	Fund Profile Manager's Report

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%.

31 Jul 2017 - Bennelong Twenty20 Australian Equities Fund

By: Australian Fund Monitors

Report Date	31 July 2017
Manager	Bennelong Australian Equity Partners (BAEP), a Bennelong boutique
Fund Name	Bennelong Twenty20 Australian Equities Fund
Strategy	Equity Long
Latest Return Date	June 2017
Latest Return	1.07%
Latest 6 Months	5.09%
Latest 12 Months	13.94%
Latest 24 Months	19.97%
Annualised Since Inception	10.13%
Inception Date	02 December 2015
FUM (millions)	AU$1.07
Fund Overview	The Fund aims to outperform the return of the S&P/ASX 300 Accumulation Index by 2% per annum after fees on a rolling three-year basis by combining indexed positions in the S&P/ASX 20 stocks with an actively managed exposure in primarily Australian stocks that are outside the S&P/ASX 20. 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 Bennelong Twenty20 Australian Equities Fund returned +1.07% in June, outperforming the S&P/ASX300 Accumulation Index by 0.85%. Over the June quarter, the Fund outperformed ASX300 benchmark by 1.63%. At the end of the month the allocation to the passive "Top 20" section of the portfolio stood at approximately 60%, leaving 40% actively allocated to stocks outside the top 20. 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.
More Information	Fund Profile Manager's Report

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%.

28 Jul 2017 - Collins St Value Fund

By: Australian Fund Monitors

Report Date	28 July 2017
Manager	Collins St Asset Management
Fund Name	Collins St Value Fund
Strategy	Equity Long
Latest Return Date	June 2017
Latest Return	6.13%
Latest 6 Months	1.51%
Latest 12 Months	22.44%
Latest 24 Months
Annualised Since Inception	18.40%
Inception Date	05 February 2016
FUM (millions)	AU$26.15
Fund Overview	The Collins Street Value Fund is an index unaware fund which seeks to create strong investment returns over the medium and long term with capital preservation a priority. 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 Collins St Value Fund (CSVF) rose +6.13% in June, taking the Fund's twelve month performance to +22.44% and outperforming the S&P/ASX200 Accumulation Index by 5.96% and by 8.35% over the financial year. 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.
More Information	Fund Profile Manager's Report

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15 Aug 2017 - Optimal Australia Absolute Trust

14 Aug 2017 - MHOR Australian Small Cap Fund

8 Aug 2017 - Fund Review: Optimal Australia Absolute Trust July 2017

OPTIMAL AUSTRALIA ABSOLUTE TRUST

8 Aug 2017 - Bennelong Twenty20 Australian Equities Fund July 2017

8 Aug 2017 - Paragon Australian Long Short Fund

8 Aug 2017 - Fund Review: Insync Global Titans Fund July 2017

4 Aug 2017 - Bennelong Long Short Equity Fund

1 Aug 2017 - Touchstone Index Unaware Fund

31 Jul 2017 - Bennelong Twenty20 Australian Equities Fund

28 Jul 2017 - Collins St Value Fund

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