NEWS
KIS Asia Long Short Fund
23 Jun 2014 - Australian Fund Monitors
KIS Asia Long Short Fund returned 0.21% during May and 11.23% for the year ended May 2014.
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23 Jun 2014 - KIS Asia Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Whilst the Fund's primary strategy is focused on long/short equities, the ability to retain discretionary powers to allocate across a number of other investment strategies is reserved. These strategies may include, but not be limited to: convertible bond investments, portfolio hedging, equity related arbitrage, special situations (e.g. merger arbitrage, rights offerings, participation in international public offerings and placements, etc.). The Fund's geographic focus is Asia excluding Japan, but including Australia). The Fund may invest outside of this region to the extent that: 1. The investment decision is driven from the Asian region or; 2. The exposure is intended to mitigate risk or enhance return from factors external to the Asian region. |
| Manager Comments | There is an old stock market adage of "sell in May and go away". Academic studies have found that there is some degree of seasonality over this period but this is skewed by some extreme movements such as the collapse of LTCM in 1998 and the October 1987 stock market crash. This May, equity markets were generally higher with the MSCI world index +1.6%, the US Markets were a notable outperformer with the S&P500 +2.1% and the NASDAQ composite +3.1%. One notable weak area was the price of Iron Ore which continued to fall in May as it has for the year so far. This is obviously detrimental to Australia as Iron Ore represents circa 20% of Australia's exports. This may lend itself to a softening bias from the RBA, especially if the Australian budget leads to slower growth as well. Anecdotally we have recently noticed that Australian assets, such as the Australian dollar itself and Australian equity index futures, seem to 'catch a bid' during US market hours but this fades in Australian market hours. This would seem to indicate a more positive external view of Australia. That is also seen in the M&A events announced this month with more than 80% of the buying coming from offshore entities. |
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Laminar Credit Opportunities Fund
23 Jun 2014 - Australian Fund Monitors
Laminar Credit Opportunities Fund returned 0.62% during May and a sound 11.78% for the prior twelve months.
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23 Jun 2014 - Laminar Credit Opportunities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may also invest in derivatives for hedging purposes. The portfolio of the Fund comprises primarily Investment Grade holding of 75% of the Fund's assets. Benchmark allocations are Australasia 50% to 100%, North America 0% to 50% and Europe 0% to 50%. Currency hedging may take place depending on benefits to the Fund. |
| Manager Comments | Month-end exposures were RMBS 64%, Listed Securities 4%, Corporate 16% and Short Dated Loans 13%. Cash holdings 3% were of NAV. While risk assets have experienced a steady grind higher this year, the interest rates market has shifted around. Yields on US 10yr treasuries hit a recent high of 3% in January. They since rallied to 2.44% and recently sold off to 2.6%. While this market has not been overly volatile, it has caused some anxiety with fixed income fund managers with an interest rate exposure. |
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Insync Global Titans Fund
20 Jun 2014 - Australian Fund Monitors
Insync Global Titans Fund took advantage of stronger equity markets and returned 1.70% during May with the annual return 12.50%
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20 Jun 2014 - Insync Global Titans Fund
By: Australian Fund Monitors
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| Manager Comments | Since inception the Fund has delivered 10.14% pa with a volatility of 8.43%. Key positive contributors for the month came from our holdings in Reckitt Benckiser, Zimmer, Directv, Express Scripts and Discover. The main negative contributors were Coach, Safran and Wyndham. The Fund continues to have no foreign currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. |
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Auscap Long Short Australian Equities Fund
19 Jun 2014 - Australian Fund Monitors
Auscap Long Short Australian Equities Fund returned a 3.82%, a sound return in choppy market, with the full year return 55.82%.
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19 Jun 2014 - Auscap Long Short Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund focuses on fundamental long and short investments. The Fund may utilise a multi-strategy approach if short term opportunities to increase returns, hedge the portfolio, protect capital or minimise volatility are found. The Fund is a high conviction fund and the combined portfolio will typically have 25-45 positions, investing primarily in stocks in the ASX200. The Fund may be net long, short or neutral depending on the strategies employed at the time. The Fund may hold cash so that it is in a position to take advantage of market volatility and compelling investment opportunities as and when they arise. The Fund may be geared up to 200% gross long or short and up to 150% net long or short. |
| Manager Comments | The Sharpe ratio was notable at 5.50 and the Fund has no negative months in the year to May. Up and Down capture ratios were 1.55 and -1.98 respectively. Average gross capital employed by the Fund was 117.4% long and 43.5% short. Average net exposure over the month was +74.0%. At the end of the month the Fund had 35 long positions and 10 short positions. The Manager's Newsletter is entitled Avoiding The Double Whammy �" Why We Prefer Value To Growth' and is available on the AFM website. |
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Aurora Fortitude Absolute Return Fund
18 Jun 2014 - Australian Fund Monitors
Aurora Fortitude Absolute Return Fund returned 0.19% during May for an annual return of 5.34% with a volatility of 1.00%.
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18 Jun 2014 - Aurora Fortitude Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund aims to produce positive returns irrespective of the direction of the share market. For each investment the manager considers the risk, the timeline of that risk occurring and then the potential return. Low transaction costs and liquidity are other important factors in the success and implementation of the strategies. |
| Manager Comments | Since inception in March 2005 the Fund has returned 7.94% (Index 7.65%) with a volatility of 2.70% (Index 13.98%). The Sharpe ratio over this time was 1.19 compared to 0.27. Aurora Oil and Gas was the stand-out in the Merger & Acquisition strategy (+0.145%) with yield (+0.196%) again the best performing strategy for the month. The Protective Option Overlay was again a draw-down on performance (-0.30%). The lack of volatility in global markets has been a major discussion point in the financial press with the continuation of easy monetary policy and low interest rates being seen as the major factors contributing to this ongoing phenomenon. One of the benefits of the option strategy is that it allows us to trade some riskier positions in larger size, and this was reflected in more positive returns in our Long/Short Portfolio (+0.13%). |
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Microequities Deep Value Microcap Fund
17 Jun 2014 - Australian Fund Monitors
Microequities Deep Value Microcap Fund returned -0.46% in May with the 12 month return a robust 28.56%.
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17 Jun 2014 - Microequities Deep Value Microcap Fund
By: Australian Fund Monitors
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| Fund Overview | The objective of the Fund is to identify undervalued Microcap companies, invest in them and, through a medium to long term commitment, attempt to deliver superior investment returns. The Fund invests primarily in ASX listed Microcap companies, which at the time of initial investment are generally below a market capitalisation of A$250 million. The Fund may also invest in companies with a higher market capitalisation, but these will be limited to no more than 20% of the assets of the Fund. At times the Fund may invest in pre-IPO securities that are due to be listed on the ASX within 3-6 months, and have lodged a prospectus with ASIC. These investments will also be limited to no more than 10% of the assets of the Fund. The Fund will be limited to investing no more than 20% of the Fund's assets in any one security or company. The Fund will make investments with a medium to long term time horizon of between 3-5+ years. The Fund will not speculate in derivatives. It will be permitted to hold other securities that are directly associated with a particular investment such as options granted with a specific company issue etc. The Fund will not engage in short selling or stock lending. The Fund will not hold financial debt of any kind. |
| Manager Comments | Since inception (March 2009) the fund has returned an annualised 29.82% (Index 14.89) with a volatility of 15.09% (Index 12.63%). The Sharpe ratio is 1.58 and the Up and Down Capture ratios 1.18 and 0.25 respectively. Notable given the Fund's investment in microcaps is the Fund's average negative return of -2.22 (index -3.00%) and maximum draw-down of 10.86% (Index 15.13%). The month saw no changes to our Fund's constituents. We continued to accumulate the top 5 positions which now make up approximately 40% of the Fund's asset value. These top 5 business partnerships represent our best investments within the context of a risk/reward relationship. |
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Totus Alpha Fund
16 Jun 2014 - Australian Fund Monitors
Totus Alpha Fund had a sound month returning 3.99% during May and 42.05% over the previous twelve months.
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16 Jun 2014 - Totus Alpha Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is a long/short investment fund principally investing in listed entities, commodities, futures and options in Australia and internationally. The Fund is not a market neutral fund and accordingly may switch between net long positions and net short positions. The Fund may use short sales and derivatives. Gearing may be used to enhance returns and the Fund may be geared in excess of 100% of the Fund's Net Asset Value. There is a limit to net exposure of 150%. |
| Manager Comments | At month-end the Fund had net exposure of 50% and a gross exposure of 217% with 112 positions. From an absolute return point of view the last 6 months has been challenging. Many of the optimistic scenarios being touted at the end of 2013 have failed to eventuate and the many of the companies we have had contact with recently are finding things tough (just this week we have seen profit warnings from TRS, PBG and FLT to name a few). |
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Morphic Global Opportunities Fund
13 Jun 2014 - Australian Fund Monitors
Morphic Global Opportunities Fund took advantage of stronger global markets to return 3.91% during May with a return of 21.73% for the prior twelve months.
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13 Jun 2014 - Morphic Global Opportunities Fund
By: Australian Fund Monitors
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| Manager Comments | At month-end the Fund exposures were 167% gross and 101% long with a VaR of 1.06%. Up and Down Capture ratios were 0.62 and -0.86 over the prior year. The Fund closed the month still fully invested, with limited regional biases other than the overweight in India, reflecting the manager's preference not to have large regional positions currently. The continuing rise of the Australian dollar is being partially offset by the Fund having hedging over part of its offshore exposure. The recent move by the European Central Bank to impose negative rates on excess bank deposits and start money printing suggests the local unit's rally may be even more resilient than we expected a month ago. |
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The Paragon Fund
12 Jun 2014 - Australian Fund Monitors
The Paragon Fund had a strong month returning 3.2% bringing the twelve month return to 26.19% with volatility in line with the Index.
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12 Jun 2014 - The Paragon Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon accepts that markets are not always efficient in pricing information into securities and that no one investment style works in every stage of the investment cycle. Subsequently Paragon adopts a top down thematic led approach to identify companies exhibiting sustainable or improving returns on capital driven by volume growth, pricing power and competitive advantages. Paragon utilises both quantitative analysis to provide probability weighted high/low/base case valuations and qualitative analysis in assessing management, the business model and likely direction of returns. Paragon will allocate assets to each investment opportunity based on a risk/reward profile. Positions have defined investment parameters and risk limits, which are then monitored on an ongoing basis. |
| Manager Comments | The Sharpe ratio was 2.46 (Index 1.49) and the Sortino ratio 4.88 (Index 2.92) were well ahead of the Index, also over the last 12 months. The Up and Down capture ratios were notable at 0.89 and -0.54 respectively. At month-end the Fund was 74.1% long and 2.9% short for net exposure ratio of 71.2%. The top 5 stocks were 25.6% of the Fund. The Fund Update covers two Fund holdings and is available on the AFM website under the Fund Profile. |
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Bennelong Kardinia Absolute Return Fund
11 Jun 2014 - Australian Fund Monitors
Bennelong Kardinia Absolute Return Fund returned 0.36% during May and 7.49% over the previous twelve months with a low volatility of 4.27%.
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11 Jun 2014 - Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| 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. There is a slight bias to large cap stocks in 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. |
| Manager Comments | The Fund's net equity market exposure including derivatives was reduced to 29.5%(49.7% long and 20.2% short). The Bennelong Kardinia Absolute Return Fund rose 0.36% in May. Long positions in Oil Search, CSL and Ansell were the largest positive contributors, whilst short positions in Treasury Wine Estate and Share Price Index Futures (hedging long exposures) were the largest detractors. |
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