Performance Report: Bennelong Emerging Companies Fund

23 Nov 2020 - Australian Fund Monitors

The Bennelong Emerging Companies Fund rose 4.78% over the month of October against the ASX200 Accumulation Index's 1.93%. Since inception in November 2017, the Fund has returned 26.91% p.a. against the Index's 4.09%.

Hedge Clippings | 20 November 2020

20 Nov 2020 - Australian Fund Monitors

It would seem that with the recount over in Georgia that Donald Trump will finally have to concede, although he's still fighting hard to have the result in Pennsylvania overturned and let the Republican controlled legislature choose the...

20 Nov 2020 - Hedge Clippings | 20 November 2020

By: Australian Fund Monitors

Hedge Clippings | Friday, 20 November 2020

It would seem that with the recount over in Georgia that Donald Trump will finally have to concede, although he's still fighting hard to have the result in Pennsylvania overturned and let the Republican controlled legislature choose the winner instead of the electorate.

And guess who they'd presumably choose? One can't accuse the Donald of being a defeatist or giving up early, irrespective of the cost and damage done on the way out of the White House.

Back to reality, as opposed to Reality TV politics.

While the US and Europe (and most of the rest of the world) are entering a dangerous winter as COVID cases surge, Australia and South Australia in particular, appear to have worked out that if you strike hard enough, and early enough (perhaps not early enough in Victoria's case, but hindsight's a wonderful thing) then the chances of things getting out of control are significantly diminished.

Irrespective of the timing of a release of an effective vaccine, it's going to be well towards the end of 2021 that life returns to semi normal, and that's without factoring in how the economy, both here and overseas, will respond and recover.

Meanwhile in China, there's another potential storm brewing - and not one of name calling and rhetoric, at least not yet. Rather, defaults by three state owned companies (SOE's), a chipmaker, car manufacturer and a coal company, have sent jitters through China's credit markets. As Bloomberg reports, "the big questions when it comes to SOE's is whether they are happening with the blessing of Beijing as authorities try to reform the bond market, or whether they're happening outside of government control".

In a controlled economy (and state) such as China, it's difficult to determine, but if it's the latter and more SOE's default on their debt repayments, then it will be a case of "Beijing, you have a problem". How the government will react is anyone's guess, but based on past performances they're unlikely to 'fess up and admit making a mistake, or being at fault.

Bloomberg is suggesting that if it is being controlled, - by deflating a massive debt balloon slowly rather than letting it pop suddenly, then using friendly (controlled) Chinese credit rating agencies would be one way of doing it. However, Chinese ratings agencies aren't that good at doing their job. The coal company, that was one of the three defaulters mentioned above, was issued with a triple-A rating just a few weeks before defaulting.

Either way it's potentially a risky environment - as anything is when dealing with China. Just ask Scomo! And don't you dare mention where COVID-19 originated!

And on that note have a great week-end!

News & Insights

Video interview with Dean Fergie from Cyan Investment Management

4 Answers to the RBA's Toughest Questions by Nikko Asset Management

Performance News

Prime Value Emerging Opportunities Fund: +14.75% over the past 12 months, +12.95% p.a. since inception in October 2015

Bennelong Emerging Companies Fund: +4.78% in October, +26.91% p.a. since inception in November 2017

Cyan C3G Fund: +14.58% p.a. since inception in July 2014

NWQ Fiduciary Fund: +7.59% over the past 12 months, +5.81% p.a. since inception in May 2013

Bennelong Twenty20 Australian Equities Fund: +4.07% in October, +9.87% p.a. since inception in December 2015

Quay Global Real Estate Fund: +5.12% p.a. since inception in July 2014

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Manager Insights | Cyan C3G Fund

20 Nov 2020 - Australian Fund Monitors

Damen Purcell, COO at Australian Fund Monitors speaks with Dean Fergie, Portfolio Manager at Cyan Investment Management. The Cyan C3G fund is a concentrated portfolio that invests in Australian shares outside the ASX top 100....

Performance Report: Delft Partners Global High Conviction

20 Nov 2020 - Australian Fund Monitors

The Delft Partners Global High Conviction Strategy rose +1.00% in October, outperforming AFM's Global Equity Index by +1.57% and taking annualised performance since inception in August 2011 to +14.04% with an annualised volatility of 11.64%.

20 Nov 2020 - Performance Report: Delft Partners Global High Conviction

By: Australian Fund Monitors

Report Date	20 November 2020
Manager	Delft Partners
Fund Name	Delft Partners Global High Conviction
Strategy	Equity Long
Latest Return Date	October 2020
Latest Return	1.00%
Latest 6 Months	-0.39%
Latest 12 Months	-4.71%
Latest 24 Months (pa)	3.49%
Annualised Since Inception	14.04%
Inception Date	15 July 2011
FUM (millions)	AU$9.2
Fund Overview	The Global High Conviction Strategy seeks to outperform the MSCI World Index by 3-5% p.a. over rolling 5 year periods. The Fund invests in companies listed on major global developed market exchanges by combining 'fundamental' analysis with quantitative stock selection tools. There is typically a bias to large caps and a 'value' tilt resulting in higher dividend yield than the index. 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 rose +1.00% in October, outperforming AFM's Global Equity Index by +1.57% and taking annualised performance since inception in August 2011 to +14.04% with an annualised volatility of 11.64%. By contrast, the Index has returned +13.25% p.a. with an annualised volatility of 10.39% over the same period. The Strategy has achieved an average positive monthly return since inception of +3.20% vs the Index's +2.94%. The Strategy's Sharpe and Sortino ratios for performance since inception are 1.02 and 1.81 respectively. With respect to the Index's 10 best and worst months since the Strategy's inception, the Strategy has outperformed in 6 out of 10 of the Index's worst months and 9 out of 10 of the Index's best month. This highlights the Strategy's capacity to perform well in both rising and falling markets.
More Information	View Fund's Profile View Manager's Report

Can Confidence Create The Conditions For Growth?

19 Nov 2020 - - Auscap Asset Management

Australia's improving domestic management of the COVID-19 pandemic, an end to the lockdowns in Victoria and Melbourne in particular, vaccine progress, fiscal stimulus and political developments in the United States over the last few months...

Performance Report: Australian Eagle Trust Long-Short Fund

19 Nov 2020 - Australian Fund Monitors

The Australian Eagle Trust Long-Short Fund rose +4.35% in October, outperforming the ASX200 Accumulation Index by +2.42% and taking 12-month performance to +10.06% vs the Index's -8.15%. Since inception in July 2016, the Fund has returned...

19 Nov 2020 - Performance Report: Australian Eagle Trust Long-Short Fund

By: Australian Fund Monitors

Report Date	19 November 2020
Manager	Australian Eagle Asset Management
Fund Name	Australian Eagle Trust Long-Short Fund
Strategy	Equity Long/Short
Latest Return Date	October 2020
Latest Return	4.35%
Latest 6 Months	20.68%
Latest 12 Months	10.06%
Latest 24 Months (pa)	19.38%
Annualised Since Inception	17.50%
Inception Date	27 June 2016
FUM (millions)
Fund Overview	The Australian Eagle Trust Long-Short Fund aims to achieve strong double digit returns by allowing clients to access Australian Eagle's demonstrated historical strength in constructing Australian share portfolios applied to a long-short product. Using a combination of Australian Eagle's actual long investment performance in conjunction with a short selling discipline, suggests that this product can provide strong investment returns along with an alpha performance that is negatively correlated to the broader Australian equity market.
Manager Comments	The Australian Eagle Trust Long-Short Fund rose +4.35% in October, outperforming the ASX200 Accumulation Index by +2.42% and taking 12-month performance to +10.06% vs the Index's -8.15%. Since inception in July 2016, the Fund has returned +17.50% p.a. vs the Index's annualised return of +7.13%. The Fund's Sharpe and Sortino ratios (since inception), 1.07 and 1.50 respectively, by contrast with the Index's Sharpe of 0.47 and Sortino of 0.49, highlight its capacity to achieve superior risk-adjusted returns while avoiding the market's downside volatility. The Fund's ability to significantly outperform in both rising and falling markets is demonstrated by its up-capture and down-capture ratios (since inception) of 147.9% and 81.1% respectively. The portfolio's largest positive contributors in October came from long positions in ResMed Inc, AMP Ltd and Commonwealth Bank of Australia Ltd. The largest detractors were short positions in Challenger Ltd, Virgin Money UK and Cimic Ltd. The Fund ended the month with 32 long positions and 20 short position, with the largest exposure to medical devices & services and technology stocks. The Fund ended the month with relatively less exposure to banking and real estate stocks.
More Information	View Fund's Profile View Manager's Report

Fund Review: Bennelong Kardinia Absolute Return Fund October 2020

18 Nov 2020 - Australian Fund Monitors

The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund, which has been in operation for more than 10 years, has a long-biased, research driven, active equity long/short strategy and invests in...

Performance Report: Harvest Lane Asset Management Absolute Return Fund

17 Nov 2020 - Australian Fund Monitors

The Harvest Lane Asset Management Absolute Return Fund rose 3.61% in October, outperforming the ASX200 Accumulation Index by 1.68% and ending the 12 months to the end of October down -7.68% vs the Index's -8.15%.

17 Nov 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund

By: Australian Fund Monitors

Report Date	17 November 2020
Manager	Harvest Lane Asset Management
Fund Name	Harvest Lane Asset Management Absolute Return Fund
Strategy	Equity Market Neutral
Latest Return Date	October 2020
Latest Return	3.61%
Latest 6 Months	11.98%
Latest 12 Months	-7.68%
Latest 24 Months (pa)	-2.39%
Annualised Since Inception	5.95%
Inception Date	01 July 2013
FUM (millions)	AU$13.1
Fund Overview	The Fund aims to deliver a return of greater than 10% p.a. after all fees and charges over a 3 year period with low or no correlation to the Australian equity market. By focusing on select takeover and corporate activity the fund aims to achieve this whilst also exhibiting lower than average volatility than the market. Harvest Lane Asset Management employs a conservative, highly selective and opportunistic approach. Using their extensive knowledge in the area of corporate actions, the Fund's managers assess each opportunity based on a thoughtful, diligent and disciplined process and invest where they believe an opportunity exists to generate above average investment returns relative to the risk incurred. Investment decisions are made without speculating on market direction, with rigid risk controls enforced to minimise the risk of large losses of investor capital. The Fund invests in securities that are predominantly listed on the ASX and occasionally in those listed in other developed markets. Equity swaps and other derivatives may be used at times to reduce risk. The fund typically holds high levels of cash in the absence of sufficiently attractive opportunities to deploy investor capital in accordance with its objectives.
Manager Comments	The Harvest Lane Absolute Return Fund rose 3.61% in October, outperforming the ASX200 Accumulation Index by 1.68% and ending the 12 months to the end of October down -7.68% vs the Index's -8.15%. Since inception in July 2013, the Fund has returned 5.95% p.a. vs the Index's annualised return of 7.34%. The Fund's down-capture ratio since inception of 10.36% indicates that, on average, the Fund has fallen approximately 10% as far as the market during the market's negative months. Harvest Lane noted that after three months of comparatively outsized returns to start FY 20-21, the highlight of the month was not so much the continuation of recent performance, but the breadth and quality of new opportunities that appeared. They have said that deal flow in recent months has mainly been focused in the smaller end of the market while confidence in M&A has remained low and that there has been a general lack of larger size transactions for various reasons. Harvest Lane are encouraged by recent results and believe the portfolio is primed to continue its run of good performance to finish the year.
More Information	View Fund's Profile View Manager's Report

Performance Report: Bennelong Long Short Equity Fund

17 Nov 2020 - Australian Fund Monitors

The Bennelong Long Short Fund has risen +24.95% over the past 12 months vs the ASX200 Accumulation Index's -8.15%. Since inception in February 2002, the Fund has returned +15.86% p.a. vs the Index's annualised return of +7.42%.

17 Nov 2020 - Performance Report: Bennelong Long Short Equity Fund

By: Australian Fund Monitors

Report Date	17 November 2020
Manager	Bennelong Long Short Equity Management, a Bennelong boutique
Fund Name	Bennelong Long Short Equity Fund
Strategy	Equity Market Neutral
Latest Return Date	October 2020
Latest Return	-0.65%
Latest 6 Months	14.12%
Latest 12 Months	24.95%
Latest 24 Months (pa)	16.31%
Annualised Since Inception	15.86%
Inception Date	01 January 2003
FUM (millions)	AU$441.3
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 Bennelong Long Short Fund has risen +24.95% over the past 12 months vs the ASX200 Accumulation Index's -8.15%. This return has been achieved with almost half the market's volatility. Since inception in February 2002, the Fund has returned +15.86% p.a. vs the Index's annualised return of +7.42%. The Fund's capacity to significantly outperform in falling markets is highlighted by the following statistics (since inception): Sortino ratio of 1.62 vs the Index's 0.36, maximum drawdown of -17.73% vs the Index's -47.19%, and down-capture ratio of -162%. The Fund's down-capture ratio indicates that, on average, the Fund has risen during the months the market has fallen. The Fund returned -0.65% in October. Performance was largely attributed to the top and bottom pairs with many of the pairs in between contributing nothing. Top pairs were long QAN / short FLT, long NWL, short IFL, and long LNK / short CPU. Bottom pairs included long A2M / short CCL, long CAR / short NEC. Bennelong noted wage subsidies, fiscal stimulus and other measures to compensate for lockdown are distorting measures of economic activity. They point specifically to the collapse in the number of companies entering administration (see latest report for the graph). Consequently, they foresee a high level of uncertainty regarding prospects for the economy when temporary measures are withdrawn. They also believe the RBA's recent interest rate cut, guidance on the duration of effective zero interest rates and quantum of QE is an indication of their concern.
More Information	View Fund's Profile View Manager's Report

Performance Report: Bennelong Kardinia Absolute Return Fund

16 Nov 2020 - Australian Fund Monitors

The Bennelong Kardinia Absolute Return Fund returned -0.70% in October, underperforming the ASX200 Accumulation Index by 2.63% and taking 12-month performance to -1.08% vs the Index's -8.15%.

16 Nov 2020 - Performance Report: Bennelong Kardinia Absolute Return Fund

By: Australian Fund Monitors

Report Date	16 November 2020
Manager	Kardinia Capital, a Bennelong boutique
Fund Name	Bennelong Kardinia Absolute Return Fund
Strategy	Equity Long/Short
Latest Return Date	October 2020
Latest Return	-0.70%
Latest 6 Months	-0.84%
Latest 12 Months	-1.08%
Latest 24 Months (pa)	0.05%
Annualised Since Inception	8.21%
Inception Date	01 May 2006
FUM (millions)	AU$47.16
Fund Overview	The Fund consists of a concentrated long/short portfolio typically comprising 20 to 50 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. On average since inception the Fund's exposure has averaged 40% net long. There is a slight bias to large cap stocks on the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. Detailed analysis of company valuations using financial statements and forecasts, particularly focusing on free cash flow, is conducted. Technical analysis is used to validate the Manager's fundamental research and valuations and to manage market timing. A significant portion of the Fund's overall performance can be attributed to the attention and importance given to the macro economic outlook and the ability and willingness to adjust the Fund's market risk.
Manager Comments	The Bennelong Kardinia Absolute Return Fund returned -0.70% in October, underperforming the ASX200 Accumulation Index by 2.63% and taking 12-month performance to -1.08% vs the Index's -8.15%. Since inception in May 2006, the Fund has returned +8.21% p.a. with an annualised volatility of 7.45%. By contrast, the Index has returned +5.27% p.a. with an annualised volatility of 14.34% over the same period. The Fund's capacity to protect investors' capital in falling markets is highlighted by the following statistics (since inception): Sortino ratio of 1.09 vs the Index's 0.18, maximum drawdown of -11.71% vs the Index's -47.19%, and down-capture ratio of 48.66%. Positive contributors included Nickel Mines, Star Entertainment, CBA, NAB and Aussie Broadband. Key detractors included Harvest Tech, Temple and Webster, Flight Centre and Kogan. The short book was also a detractor to performance. Kardinia reduced net market exposure to 30.4% (55.3% long and 24.9% short) in the face of US election uncertainty, with the key changes being a reduction in the size of long positions, partially offset by some initial public offerings and an increase in weighting of Commonwealth Bank. Kardinia maintain a bias towards stocks that benefit from a re-opening of economies scenario. They believe good progress is being made on potential vaccines and treatments and Governments will increasingly move towards a 'living with the virus' approach as the economic damage from lockdowns becomes apparent.
More Information	View Fund's Profile View Manager's Report AFM Research Reports

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23 Nov 2020 - Performance Report: Bennelong Emerging Companies Fund

20 Nov 2020 - Hedge Clippings | 20 November 2020

20 Nov 2020 - Manager Insights | Cyan C3G Fund

20 Nov 2020 - Performance Report: Delft Partners Global High Conviction

19 Nov 2020 - Can Confidence Create The Conditions For Growth?

19 Nov 2020 - Performance Report: Australian Eagle Trust Long-Short Fund

18 Nov 2020 - Fund Review: Bennelong Kardinia Absolute Return Fund October 2020

17 Nov 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund

17 Nov 2020 - Performance Report: Bennelong Long Short Equity Fund

16 Nov 2020 - Performance Report: Bennelong Kardinia Absolute Return Fund

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