NEWS
29 Jan 2020 - Performance Report: Quay Global Real Estate Fund
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Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
Manager Comments | The Fund returned -3.2% in December, impacted by a -2.8% headwind from currency. The AUD appreciated against all of the Fund's foreign currency holdings during the month. Top performers included Big Yellow Group and Safestore Holdings, two UK storage investees which benefited from the 'Boris Bounce'. Wharf REIC (HK Retail) also performed well as Hong Kong saw a relatively calm month on the protest front. Bottom performers included Sun Communities (US Manufactured Housing) and Store Capital (US Triple Net). Quay noted both investees had a strong 2019 (+50% and +35% price appreciation respectively) and believe profit taking contributed to their performance in December. The Fund's Residential investees also performed relatively poorly during the month as new home sales trend upwards. Quay believe the portfolio is well placed to take advantage of the significant demographic tailwinds they expect over the first half of this decade (Healthcare, Affordable Housing), and should hold up well in the event of an unforeseen economic disruption given its defensive positioning. |
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29 Jan 2020 - Performance Report: Loftus Peak Global Disruption Fund
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Fund Overview | The investment process involves a combination of top-down analysis with fundamental bottom-up qualitative and quantitative research to derive a risk-adjusted discounted cash flow (DCF) valuation of companies in the target universe. The investment team will generally buy stocks from the pool of securities that are trading below Loftus Peaks' valuation and sell them when they are trading above Loftus Peak's valuation. The approach allows for both fundamental accounting information as well as market-oriented inputs to be factored into the portfolio construction process. Loftus Peak's model typically does not rely on leverage to deliver investment returns and specifically takes into account risk in the valuation process. Capital preservation can be managed by holding up to 50% cash. Index and currency options and futures may also be used to manage risk. |
Manager Comments | The Fund's holdings were strong in December, however an adverse movement in the currency impacted performance by -3.5%, leaving the Fund flat for the month. Loftus Peak noted rhetoric around trade wars softened from both sides, with China pure-play stocks such as Tencent and Alibaba rebounding and companies with exposure to China (Qualcomm, Tesla) also recording good returns. The manager's decision to deploy cash in October on weakness in key names was beneficial. Top contributors over the month included Tencent, Apple and Tesla. Key detractors included Vmware, Nutanix and Roku. The fund was 95% invested in 22 holdings with the balance in cash at month-end. |
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29 Jan 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 | The Fund fell in line with the market in December, returning -0.35%. Positive contributors included London Stock Exchange, Bristol-Myers Squibb, Booking Holdings and Apple. Detractors included Walt Disney, Intuit, PayPal and Facebook. The Fund continues to have no currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. |
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28 Jan 2020 - Performance Report: Bennelong Emerging Companies Fund
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Fund Overview | The Fund may invest in securities expected to be listed on the ASX within 12 months. The Fund may also invest in securities listed, or expected to be listed, on other exchanged where such securities relate to ASX-listed securities |
Manager Comments | The Bennelong Emerging Companies Fund returned +86.64% after fees over CY2019, outperforming the ASX200 Accumulation Index by +66.24% and taking annualised performance since inception in November 2017 to +36.43% versus the Index's +10.47%. As is expected of a fund investing in micro and small caps, these returns have been achieved with significantly higher volatility than the market. Over the December quarter the Fund returned +2.87% versus the Index's +0.68%. The largest contributors to quarterly performance were Viva Leisure and BWX, while the biggest detractor was Prospa. They discussed these stocks in some detail in their September quarterly report. Bennelong noted that, while performance through the year was very strong, they continue to find select opportunities among emerging companies that they believe should position the fund for decent returns over time. They also emphasise that investors should not expect future returns to be as good as they were in 2019. |
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28 Jan 2020 - Performance Report: Surrey Australian Equities Fund
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Fund Overview | The Investment Manager follows a defined investment process which is underpinned by detailed bottom up fundamental analysis, overlayed with sectoral and macroeconomic research. This is combined with an extensive company visitation program where we endeavour to meet with company management and with other stakeholders such as suppliers, customers and industry bodies to improve our information set. Surrey Asset Management defines its investment process as Qualitative, Quantitative and Value Latencies (QQV). In essence, the Investment Manager thoroughly researches an investment's qualitative and quantitative characteristics in an attempt to find value latencies not yet reflected in the share price and then clearly defines a roadmap to realisation of those latencies. Developing this roadmap is a key step in the investment process. By articulating a clear pathway as to how and when an investment can realise what the Investment Manager sees as latent value, defines the investment proposition and lessens the impact of cognitive dissonance. This is undertaken with a philosophical underpinning of fact-based investing, transparency, authenticity and accountability. |
Manager Comments | The Fund's cash weighting totalled 11% at month-end with 29 individual stock holdings. The top holdings included Bravura Solutions, Cooper Energy, Corporate Travel, IMF Group and Xero Limited. From a macro/global perspective, Surrey noted two features that have emerged include an increasing shift toward gold and the rise in the oil price, both of which are correlated to increasing tensions in the middle-east. Surrey believe the Fund is well positioned for this uncertainty and the Fund's gold and energy weightings increasing materially at the start of January. |
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28 Jan 2020 - On the Road Again Part 2 Germany Calling
24 Jan 2020 - Hedge Clippings | 24 January 2020
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24 Jan 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
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Fund Overview | 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 | Harvest Lane noted that, aside from a partial deal break in Panoramic Resources after Independence Group withdrew its bid, the remaining softness in December was predominantly a result of widening spreads rather than fundamental catalysts. Consequently, should the Fund's current positions see their respective transactions complete then Harvest Lane expect a substantial portion of the underperformance to be recouped in time. Harvest Lane saw a steady stream of deals announced to market throughout the month, giving them the opportunity to add several new positions to the portfolio. Transactions in Konekt Limited and Bellamy's Australia closed towards the end of the month, carrying with them a healthy dose of franking credits which are in addition to the Fund's reported performance. Harvest Lane are encouraged by the current positions in the portfolio and believe 2020 offers a favourable outlook for merger and acquisition activity. |
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24 Jan 2020 - 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 Fund returned -1.67% in December, outperforming the Index by +0.5%. Top contributors included Moelis Australia (+10.2%), Polynovo (+10.1%), Magellan Financial Group (+8.5%), NRW Holdings and Stanmore Coal. Key detractors included Jumbo Interactive (-27.3%), Phoslock Environmental Technologies (-10.1%), VGI Partners (-8.8%) and Opticomm (-7.0%). Glenmore noted there were no company announcements from VGI or OPC during the month, however both had been strong performers in 2019 and thus some retracement was not unexpected. Glenmore believe the main driver of strong performance in equities throughout 2019 was low interest rates, which continue to underpin demand for stocks. Despite the Fund's significant outperformance over the past 12 months, Glenmore continue to find undervalued stocks in their universe and feel optimistic about the prospects for the portfolio in the year ahead. |
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24 Jan 2020 - Performance Report: Insync Global Capital Aware 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 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 Fund fell in line with the market in December, returning -0.61% after the cost of downside protection. Positive contributors included London Stock Exchange, Bristol-Myers Squibb, Booking Holdings and Apple. Detractors included Walt Disney, Intuit, PayPal and Facebook. The Fund continues to have no currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. |
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