NEWS
7 Sep 2020 - 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 | Positive contributors in August included PointsBet, Sezzle, BigTincan and the Fund's gold and silver holdings. These were offset by declines in Oceana and Stockland (short). The Fund ended the month with 29 long positions, 5 short positions and a net exposure of 125%. Paragon noted they are pleased that the Fund is now back at new highs and they remain excited about their outlook. |
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4 Sep 2020 - Hedge Clippings | 04 September 2020
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4 Sep 2020 - Manager Insights | Australian Eagle Asset Management
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Australian Fund Monitors speaks with Australian Eagle Asset Management's CIO, Sean Sequeira, about how their funds have performed historically with a focus on their performance throughout CY20. Sean also details Australian Eagle Asset Management's outlook for the funds and the markets in which they invest going forward. Australian Eagle Asset Management operate two funds, the Australian Eagle Growth High Conviction Equity Fund and the Australian Eagle Trust Long-Short Fund, both of which have risen +8.7% over the past 12 months against the ASX200 Accumulation Index's -5.08%. |
4 Sep 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 Fund returned -4.68% in July. The best performers during the month were: Gold (+2.37% of NAV), Euro Stoxx 50 (+2.24% of NAV) and HSCEI (+1.05% of NAV). The worst-performing assets for the month were: Euro Bund (-1.33% of NAV), DAX Index (-1.52% of NAV) and Silver (-1.98% of NAV). |
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4 Sep 2020 - Performance Report: Ark Global Fund - Class B AUD Hedged
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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 Fund returned -1.4% in July. The best performers during the month were: Gold (+2.37% of NAV), Euro Stoxx 50 (+2.24% of NAV) and HSCEI (+1.05% of NAV). The worst-performing assets for the month were: Euro Bund (-1.33% of NAV), DAX Index (-1.52% of NAV) and Silver (-1.98% of NAV). |
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4 Sep 2020 - Performance Report: Delft Partners Global High Conviction
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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 Strategy has achieved an average positive monthly return of +3.26% vs the Index's +2.94%. The Strategy's Sharpe and Sortino ratios for performance since inception are 1.01 and 1.79 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 months. This highlights the Strategy's capacity to perform well in both rising and falling markets. |
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3 Sep 2020 - Performance Report: Insync Global Quality Equity Fund
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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 typically of 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. |
| Manager Comments | At month-end, the portfolio's top holdings included PayPal, Microsoft, Visa, Adobe, JD Sports Fashion, Facebook, Walt Disney, Accenture, S&P Global and Zoetis. The top three megatrends in the portfolio by weight were the 'Age Related Health Solutions' and 'Digitisation' megatrends (both at 14% of the portfolio), followed by the 'Cashless Society' megatrend (13% of the portfolio). |
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2 Sep 2020 - Performance Report: Laureola Investment Fund
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| Fund Overview | The investment strategy of The Laureola Investment Fund is dynamic and flexible, designed to take advantage of the frequent but temporary pricing anomalies of an asset class that is not yet fully understood by the majority of participants. Laureola Advisors applies 'best practices' common in the management of traditional assets, particularly the use of independent, in-house, proprietary research. |
| Manager Comments | In their latest report, Laureola highlight the mounting signs of speculative fever, with US stocks up +5.5% in July. They see a significant divergence between asset prices and economic reality, pointing specifically to the following: the US economy declined by 32.9% on an annualised basis last quarter (economies in Europe and Asia plunged by similar or worse rates), 25 major US retailers have filed for bankruptcy in 2020 and the 4 largest US banks have $150bn of loans in 'deferral'. Laureola believe this divergence is based on two beliefs: 1) Governments will always be able to prop up markets with easy money, and 2) these actions will not have significant consequences. However, due to Laureola's lack of conviction in either of these beliefs, they see Life Settlements as a sensible alternative asset class. Performance in July was driven by the maturity of 3 life settlement policies. 80% of the returns YTD have been from maturities which Laureola point out is the true measure of the performance of a Life Settlements fund. The Fund also completed a successful restructuring during the month, putting it on a solid foundation for future growth including lower expenses. The Fund now has capital to deploy, both from new investors and maturities, and the Fund's advisors continue to select policies to ensure future returns and future cash flow. Laureola noted that, due to the nature of Life Settlements as an asset class, the Fund's performance will not be affected if and when economic reality hits asset prices. |
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1 Sep 2020 - Time to Move on? Go East?
1 Sep 2020 - Performance Report: Atlantic Pacific Australian Equity Fund
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| Fund Overview | The primary objective of the Atlantic Pacific Australian Equity Fund is to generate a mixture of capital and income returns for investors with a high risk profile, over a 5 to 7 year investment period. The Investment Manager believes that markets are fundamentally inefficient and that active investment management will result in higher than 'benchmark' returns. The Fund has adopted the S&P/ASX200 Accumulation Index as the benchmark for its performance. The Investment Manager also believes that, on review of many markets globally, no individual style or method of investing will always ensure outperformance in terms of return on investment. In light of this, the Investment Manager may adopt a 'value', 'growth' or 'momentum' style bias, for example, depending on where the market is in its investment cycle. Further, the Investment Manager believes that actual and forecasted events underpin absolute and relative price movements of securities. The Investment Manager will utilise a number of frameworks to assist in positioning the Fund's portfolio of investments. These include fundamental research, quantitative analysis, and macro and catalyst research. |
| Manager Comments | The Fund's capacity to protect investors' capital in falling markets is highlighted by the following statistics (since inception): Sortino ratio of 1.33 vs the Index's 0.49, average negative monthly return of -1.51% vs the Index's -3.10%, maximum drawdown of -8.07% vs the Index's -26.75%, and down-capture ratio of 25.96%. |
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