NEWS
Performance Report: 4D Global Infrastructure Fund
19 Dec 2019 - Australian Fund Monitors
The 4D Infrastructure Fund rose +0.87% in November, outperforming its benchmarks (OECD G7 Inflation Index +5.5%) by +0.35% and taking 12-month performance to +29.64% versus the benchmark's +7.00%. The Fund has returned +14.27% p.a. with an...
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19 Dec 2019 - Performance Report: 4D Global Infrastructure Fund
By: Australian Fund Monitors
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| Fund Overview | The fund will be managed as a single portfolio of listed global infrastructure securities including regulated utilities in gas, electricity and water, transport infrastructure such as airports, ports, road and rail as well as communication assets such as the towers and satellite sectors. The portfolio is intended to have exposure to both developed and emerging market opportunities, with country risk assessed internally before any investment is considered. The maximum absolute position of an individual stock is 7% of the fund. |
| Manager Comments | The strongest portfolio performer for the month was Canadian renewable player Boralex (+14.8%) with the market reacting well to the Q3 results and positive momentum in their project pipeline. The weakest performer was Indonesian toll road operator Jasa Marga (-9.4%). In 4D's view, this weakness was a buying opportunity with all November news supporting the Jasa Marga investment thesis. As at the end of November, the Fund had an exposure of 35% to Developed Europe, 32% to Emerging Markets, 27% to North America and held 6% in cash. 4D noted that, despite a slowing global macro environment, it remains supportive of their overweight positioning to user pay assets. However, ongoing geo-political issues see them limiting exposure to certain regions (e.g. UK). |
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Performance Report: DS Capital Growth Fund
19 Dec 2019 - Australian Fund Monitors
The DS Capital Growth Fund rose +2.29%, taking 12-month performance to +23.19% and annualised performance since inception in January 2013 to +15.52% with an annualised volatility of 7.10%.
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19 Dec 2019 - Performance Report: DS Capital Growth Fund
By: Australian Fund Monitors
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| Fund Overview | The investment team looks for industrial businesses that are simple to understand; they generally avoid large caps, pure mining, biotech and start-ups. They also look for: - Access to management; - Businesses with a competitive edge; - Profitable companies with good margins, organic growth prospects, strong market position and a track record of healthy dividend growth; - Sectors with structural advantage and barriers to entry; - 15% p.a. pre-tax compound return on each holding; and - A history of stable and predictable cash flows that DS Capital can understand and value. |
| Manager Comments | The Fund's Sharpe and Sortino ratios, 1.82 and 3.78 respectively, by contrast with the Index's Sharpe of 0.83 and Sortino of 1.24, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst avoiding the market's downside volatility over the long-term. The Fund's up-capture ratio of 59.7% and down-capture ratio of 19.4% indicate that, on average, the Fund has capture significantly more of the market's upside than its downside since the Fund began. The Fund aims to deliver an average return of at least 10% p.a. through the economic cycle, with a focus on capital preservation. The Fund comprises a concentrated portfolio of small and mid-cap investments selected through a process of quantitative and qualitative analysis. |
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Performance Report: Cyan C3G Fund
19 Dec 2019 - Australian Fund Monitors
The Cyan C3G Fund has risen +19.55% over the past 12 months and has returned +19.40% p.a. with an annualised volatility of 11.28%. By contrast the ASX200 Accumulation Index has returned +8.46% p.a. with an annualised return of 10.88% since...
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19 Dec 2019 - Performance Report: Cyan C3G Fund
By: Australian Fund Monitors
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | The Fund returned -3.2% in November. Cyan noted many of the companies in which they had enjoyed strong gains in prior months have endured selling pressure. They added that, while Cyan typically look at an investment timeframe in excess of 2 years, the stock market does value and price companies on a daily basis which can sometimes result in large fluctuations in short-term prices. Despite the underwhelming monthly return, Cyan remain optimistic about the Fund's outlook. They noted that, in addition to the positive expectations for their core holdings, there has been a deluge of corporate activity and new issues, some of which have the potential to be attractive longer-term investments. |
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China Journal, musings from a small cap investor
19 Dec 2019 - Nick Guidera, Analyst at Eley Griffiths Group
A trip to China can yield many outcomes for an investor. The sheer land mass and multitude of micro economies can make it difficult to ascertain whether a Hebei steel mill's bullish outlook lines up with the local property developer in...
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19 Dec 2019 - China Journal, musings from a small cap investor
By: Nick Guidera, Analyst at Eley Griffiths Group
Performance Report: Harvest Lane Asset Management Absolute Return Fund
18 Dec 2019 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund rose +0.61% in November. Since inception in July 2013, the Fund has returned +8.28% p.a. with an annualised volatility of 6.76%. Over the same period, the ASX200 Accumulation Index has returned +10.44%...
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18 Dec 2019 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
By: Australian Fund Monitors
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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 activity was predominantly driven by news flow in existing positions, although they continue to see a steady stream of deal flow. A handful of late stage deals completed, bringing a healthy amount of bonus franking credits with them which contributed to the effective return to investors and came in addition to the headline published returns. Harvest Lane's view is that 2019 was a somewhat frustrating year for prudently managed active investment approaches that don't gamble on broader market conditions. They expect 2020 to provide some very different market conditions to sort the wheat from the chaff. |
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Performance Report: Wheelhouse Global Equity Income Fund
18 Dec 2019 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund returned +3.39% in November, taking CYTD performance to +17.33%. Since inception in May 2017 the Fund has returned +10.04% p.a. with an annualised volatility of 7.41%. The Fund's November return...
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18 Dec 2019 - Performance Report: Wheelhouse Global Equity Income Fund
By: Australian Fund Monitors
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| Fund Overview | To pursue this objective, the Investment Manager is responsible for actively managing, monitoring and tailoring the integration of derivative contracts alongside the Morningstar Portfolio, while taking into account changing market and stock specific conditions. The Investment Manager is responsible for maximising the structural benefits of short option positions (lowered Volatility, improved capital preservation, higher income generation), whilst mitigating, minimising and monitoring the structural negatives (variable market exposure, option expiries, collateral management and asymmetric return profiles). In addition, long derivatives positions are also used to enhance the capital preservation characteristics of the Fund in more extreme market movements. As a consequence of the integration of Derivatives, returns of the strategy, intra-cycle, are expected to vary from the underlying Morningstar Portfolio due to these characteristics. For example in weak markets, or in extended sideways markets, the Fund is expected to outperform relative to the Morningstar Portfolio. Conversely in strong positive markets the Fund is expected to underperform. |
| Manager Comments | The Fund's November return comprised +1.57% from the portfolio (in USD) and +1.82% from the weakening AUD against the USD. Top contributors included ServiceNow, Amgen, Adobe, Guidewire Software and Western Union. Detractors included Elekta AB, Kao Corp, Richemont, KLA-Corp and Cheniere Energy. The strategy's high-income generation and active tail risk program are designed to lower risk and deliver equity returns with a smoother, more retiree-friendly return profile. As a result, Wheelhouse expect returns to add relative value in weak and low-growth markets and to drag in more positive markets. |
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Performance Report: Frazis Fund
18 Dec 2019 - Australian Fund Monitors
The Frazis Fund rose +7.5% in November, outperforming AFM's Global Equity Index by +3.1%. This follows from the Fund's October return of +7.6% and takes CYTD performance to +29.35% versus the Index's +27.55%.
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18 Dec 2019 - Performance Report: Frazis Fund
By: Australian Fund Monitors
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| Fund Overview | The manager follows a disciplined, process-driven, and thematic strategy focused on five core investment strategies: 1) Growth stocks that are really value stocks; 2) Traditional deep value; 3) The life sciences; 4) Miners and drillers expanding production into supply deficits; 5) Global special situations; The manager uses a macro overlay to manage exposure, hedging in three ways: 1) Direct shorts 2) Upside exposure to the VIX index 3) Index optionality |
| Manager Comments | The Frazis Fund rose +7.5% in November, outperforming AFM's Global Equity Index by +3.1%. This follows from the Fund's October return of +7.6% and takes CYTD performance to +29.35% versus the Index's +27.55%. The Fund benefited from strong contributions from Carvana and Amarin during November. Amarin is a US biotech company marketing pure EPA, a component of fish oil. Frazis noted research results released in Japan and also by Amarin both showed EPA to be capable of reducing the risk of heart attack on a similar order of magnitude as statins. Frazis remain excited about this opportunity. This month Frazis have also released an Insights article, 'A blood test for cancer', in which they discuss their views on Guardant Health, a new company in the portfolio developing a blood test for cancer. Frazis Capital Partners are pleased with how the fundamentals underlying the Fund's long-term investments are progressing. These are in companies they've discussed in previous months' performance reports, including Afterpay, Carvana, Pinduoduo, Amarin, Pointsbet, diagnostics and US software. They noted that, after a long period of investment over the past year, they are hoping to reap the rewards of these investments over the next few years and are also optimistic the Fund's good fortune in the life sciences will continue. |
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The Best Protection in a Market Downturn
18 Dec 2019 - Alex Pollak (CIO)
We believe the key to investor protection from broad market declines is delivered by our stock selection and portfolio construction process. Our process is inherently biased towards large market capitalisation quality companies which are...
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18 Dec 2019 - The Best Protection in a Market Downturn
By: Alex Pollak (CIO)
Performance Report: Bennelong Australian Equities Fund
17 Dec 2019 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +5.82% in November, outperforming the ASX200 Accumulation Index by +2.54% and taking annualised performance since inception in February 2009 to +14.20% versus the Index's +11.13%.
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17 Dec 2019 - Performance Report: Bennelong Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Bennelong Australian Equities Fund seeks quality investment opportunities which are under-appreciated and have the potential to deliver positive earnings. The investment process combines bottom-up fundamental analysis with proprietary investment tools that are used to build and maintain high quality portfolios that are risk aware. The investment team manages an extensive company/industry contact program which helps identify and verify various investment opportunities. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to the ASX-listed securities. The Fund typically holds between 25-60 stocks with a maximum net targeted position of an individual stock of 6%. |
| Manager Comments | The Bennelong Australian Equities Fund rose +5.82% in November, outperforming the ASX200 Accumulation Index by +2.54% and taking annualised performance since inception in February 2009 to +14.20% versus the Index's +11.13%. The Fund's up-capture and down-capture ratios, 121.6% and 95.6% respectively, indicate that, on average, the Fund has outperformed in both rising and falling markets since inception. As at the end of November, the Fund's weightings had been increased in the Discretionary, Health Care, Consumer Staples and Materials sectors, and decreased in the IT, Communication, Industrials, REIT's and Financials sectors. The Fund's top holdings included CSL, BHP Billiton and James Hardie Industries PLC. The Fund aims to invest in high quality companies with strong growth outlooks and underestimated earnings momentum. The Fund's portfolio characteristics, as detailed in the latest report, indicate that the Fund is in line with the manager's investment objective. |
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Performance Report: Datt Capital Absolute Return Fund
17 Dec 2019 - Australian Fund Monitors
The Datt Capital Absolute Return Fund rose +1.31% in November, taking 12-month performance to +13.15% and annualised performance since inception in August 2018 to +9.62%.
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17 Dec 2019 - Performance Report: Datt Capital Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Our investment objectives are: 1) To minimise the risk of permanent capital loss 2) Generate a net return of 10% through the economic cycle An unconstrained, concentrated approach focused on superior risk-adjusted returns. The investment strategy: - targets long-term capital growth in a prudent manner, with an emphasis on capital preservation and low volatility in returns - aims to outperform in markets where equities are down - diversifies investments across asset classes and duration to reduce risk while maintaining relatively concentrated exposure to attractive investment opportunities - is an application of the Manager's investment process, that has no institutional constraints and is completely benchmark unaware |
| Manager Comments | As at the end of November, the Fund comprised 38% CRE debt, 52% equities and 10% cash. During the month Datt Capital increased the Fund's position in Adriatic Metals which they believe is chronically undervalued due to an over exaggerated perception of sovereign risk. Top equity performers included Adriatic Metals and Afterpay, while Lynas and Alice Queen were the main equity detractors. Datt Capital believe they are well positioned leading into the new year given the Fund's cash holdings and the portfolio's skew towards opportunities which the manager considers ripe for consolidation. They noted all of their holdings hold high quality and desirable assets which the manager feels reduces their potential downside over time and provides them positive leverage in instances where a sector may be in decline overall. |
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