NEWS
Cor Capital Fund
18 Feb 2015 - Australian Fund Monitors
The Cor Capital Fund returned +4.0% during January and 8.57% over the previous 12 months with a volatility of 4.94%. The return since inception in August 2012 was 6.34% per annum with a volatility of 5.62%.
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18 Feb 2015 - Cor Capital Fund
By: Australian Fund Monitors
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| Fund Overview | The Cor Capital Fund is a Multi- Asset Fund which combines a pre-determined strategic asset allocation with active but systemised rebalancing to generate returns and manage volatility whilst maintaining transparency and liquidity. The Fund strategy is not reliant on accurate market predictions, forecasts or timing for success. Returns are generated in a number of ways; 1) by maintaining sufficiently large positions in a diverse group of asset classes, 2) via the 'volatility harvesting' consequences of active rebalancing, and 3) from the offsetting behaviour of certain asset classes under specific conditions. The combined portfolio is expected to exhibit relatively low volatility and low turnover. In the interests of avoiding complexity, maintaining liquidity, and minimising reliance on third parties, the Fund strategy does not employ gearing, derivatives or short-selling. |
| Manager Comments | These results were achieved without the use of derivatives, gearing or short-selling. The Fund's expected return is 5% above the rate of inflation before fees. Following a surge in the gold price (+22% over the last quarter) relative to the other assets in the Fund, that position represented over 28% of the portfolio with cash falling to 23.46%. These weightings exceed the defined limits and so the Fund will be rebalanced at the start of February. |
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Optimal Australia Absolute Trust
17 Feb 2015 - Australian Fund Monitors
Optimal Australia Absolute Trust returned -1.88% in January, bringing performance since inception to 8.78% (ASX200 Accum Index 5.91%) and volatility of 3.68% (Index 14.47%).
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17 Feb 2015 - Optimal Australia Absolute Trust
By: Australian Fund Monitors
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| Fund Overview | The Fund's bias is likely to be net long under normal market conditions, with the core strategy being to construct a portfolio of listed equity securities priced at levels that do not adequately reflect their underlying value. The Fund will seek to boost returns and limit potential market downside by selective short selling of individual stocks which are priced at levels that are viewed as materially above their underlying value. The Fund will also use certain trading strategies both within its core portfolio (through rebalancing stock weights and overall market exposure in response to price movements) and in certain other situations (typically of a shorter-duration and/or opportunistic nature) with the objective of further increasing returns. |
| Manager Comments | The valuation gap between (loosely generalised) financial repression/low interest rate winners and cyclical losers has continued to blow out. Any stock with 'defensive yield' characteristics continues to be re-rated to valuations that are indefensible on any non-yield metric; yet no price is low enough for materials and cyclicals in view of earnings risk. Our longs, which include a small exposure to the latter category, lost 0.60% in NAV terms. Our shorts, which do feature 'indefensible valuation yield' as a common factor weight, were roiled by a further collapse in bond yields, losing 0.68%/NAV. Our index futures position compounded hedge costs. The big macro events of January and early February seemed similarly supportive of further yield-seeking investment strategies. Both the ECB quantitative easing program and locally the RBA cut 0.25% in cash rate down to record low 2.25% had intended effect of driving yields down further. So we watch and wait for further opportunities on this thematic, having tightened our risk management disciplines around this trade. |
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Fund Review: Bennelong Alpha 200 Fund Jan 2015
16 Feb 2015 - Australian Fund Monitors
The Alpha 200 Fund primarily invests within the top 200 by market capitalisation, using a similar "pairs trading" approach while remaining broadly market neutral on a cost basis. The Fund returned 2.18% in January and 4.13% since inception.
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16 Feb 2015 - Fund Review: Bennelong Alpha 200 Fund Jan 2015
By: Australian Fund Monitors
BENNELONG ALPHA 200 FUND
CPD Points are now available for all AFM Fund Reviews. Read the review and answer 5 questions to earn half a point toward your continuing professional development.
We would like to highlight the following aspects of the Fund:
- The Bennelong Alpha 200 Fund is a new fund opened in December 2013. The Fund is broadly modelled on the strategy used for Bennelong's original Equity Long Short Fund which uses a market neutral "pairs trading" approach to invest in Top 100 stocks, and which has been managed by Richard Fish since the inception of BLSEM in 2002.
- The Alpha 200 Fund however primarily invests within the top 200 by market capitalisation, using a similar "pairs trading" approach while remaining broadly market neutral on a cost basis.
- The Fund will hold 70 - 90 stocks comprising 35 to 45 pairs,although it can hold up to 100 stocks and 50 pairs. Each pair contains one long and one short position each of which is thoroughly researched and,where possible, from the same market sector. The pair positions are dollar neutral at cost, limited in terms of sector exposure, and give theportfolio a target beta of zero over time.
- In addition to Richard Fish, the team is composed of Sam Shepherd who joined BLESM from Credit Suisse, where he ran the Melbourne institutional equities desk. Shepherd's 20 year experience also covers JP Morgan and Norwich Investment Management. Tim Hall recently joined BLSEM as a specialist mid and small-cap portfolio manager to work on the expanded universe of the 200 Alpha Fund. The team is supported by experienced investment analyst, Sam Taylor.
If you have any questions in relation to the Fund Review, please do not hesitate to contact us.
Sean Webster
Research and Database Manager
Australian Fund Monitors
The Paragon Fund
11 Feb 2015 - Australian Fund Monitors
The Paragon Fund returned 3.22% (ASX 200 Accum 3.28%) during January 2015 with annual returns at 20.05% (Index 9.25%) with a volatility 12.04% (Index 10.88%).
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11 Feb 2015 - 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 | Since inception the Paragon Fund has returned +41.9% after fees vs. the market (All Ordinaries Accumulation Index) +17.1%. Key drivers of the Paragon Fund performance for January included solid returns from industrial firms Qantas and Orora, from our AREIT & Infrastructure stocks, Henderson Group and our gold stock picks. At the end of January the fund had 29 long positions and 14 short positions. |
| More Information | » View detailed profile of this fund |
Morphic Global Opportunities Fund
10 Feb 2015 - Australian Fund Monitors
Morphic Global Opportunities Fund rose 4.42% in January 2015 (Global Equity Index 3.27%) with a volatility of 8.68%.
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10 Feb 2015 - Morphic Global Opportunities Fund
By: Australian Fund Monitors
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| Manager Comments | The New Year began as the old one left off, with a continued decline in the Australian dollar more than offsetting falls in many global markets in local currency terms, especially the US. Of the major markets Europe did best, bolstered by the announcement of a more aggressive than expected programme of money printing by the European Central Bank, but weakness in the Euro partially offset even these gains. The Fund closed the month fully invested, with the main features being overweight positions in China and India against the rest of the emerging market complex, and an overweight position in Europe against the US. The overweight in Europe saw the instatement of a hedge against the Euro through a long position in Danish Krone. Although the two currencies are presently pegged, we believe a likely break in the peg would give us some protection if rising tensions between northern and southern Europe were to result in a messy break-up of the euro-zone. The Fund increased its underweight position in the Australian dollar during the month. |
| More Information | » View detailed profile of this fund |
Bennelong Alpha 200 Fund
9 Feb 2015 - Australian Fund Monitors
Bennelong Alpha 200 Fund returned 2.18% during January 2015, bringing the fund's annual return to 4.13% since inception.
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9 Feb 2015 - Bennelong Alpha 200 Fund
By: Australian Fund Monitors
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| Fund Overview | The core investment strategy of the Fund consists of the active selection of a series of paired long/short investments in Australian listed equities based upon the Investment Manager's fundamental research. The strategy seeks to capture stock Alpha whilst limiting portfolio exposure to market risk by adopting a dollar neutral portfolio market exposure position with the tactical capability to take net exposure of up to +/- 20% of gross assets. Stock selection is based on fundamental analysis to derive a view of a pair of individual stocks. The Investment Manager is style neutral in determining the stock's positioning. This primary 'pairs' strategy may be enhanced by other complementary strategies, including event driven, security and takeover arbitrage, thematic and momentum trading. The paired stock positions comprise long and short correlated securities that are in most cases simultaneously opened. A portfolio of approximately 30-100 stocks will be selected and actively managed in 15-50 pairs to comprise the core minimum (60%) of the Gross Asset Value. Up to a maximum of 40% of the portfolio's Gross Asset Value may be invested in uncorrelated securities and/or uncovered (long and/or short) positions. These 'satellite' positions are intended to enhance returns and to balance overall portfolio risk. In this regard, the Investment Manager recognises that it is not always possible to achieve a suitable paired profile within the S&P/ASX 200, and that a high conviction long or short stock idea might not always have a suitable pair. |
| Manager Comments | Fund performance was solid in a stronger month for the market. The bulk of the return was derived from the long book, notwithstanding the short book made a small positive contribution which was pleasing in a rising market. A broad range of pairs made a strong contribution to the return, while only one of the negative pairs was significant. Austal / Downer was our largest contributor with both sides making a positive contribution. Downer was weighed down by the sombre mood in the mining industry. Our poorest pair was Altium / UXC, SMS Management, caused by a weak half year sales announcement by Altium. The result was sufficiently different to our forecasts for us to cut the position. We are assessing a new pairing with UXC, SMS. |
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LHC Capital Australia High Conviction Fund Performance Report
4 Feb 2015 - Australian Fund Monitors
LHC Capital Australia High Conviction Fund returned 0.60% for January 2015 and since inception in May 2011 the fund has annualised returned 22.39%. Since inception the fund has recorded 80% positive months compare to the ASX 200 Total...
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4 Feb 2015 - LHC Capital Australia High Conviction Fund Performance Report
By: Australian Fund Monitors
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| Fund Overview | LHC Capital will also seek to identify or encourage events that may act as a catalyst for valuations to converge towards their intrinsic value. The emergence of catalyst events will also have an impact on how LHC Capital allocates the Fund's capital between competing investment opportunities. |
| Manager Comments | This return was achieved with lower volatility of 9.56% compare to the ASX 200 Accumulation Index of 11.89%. Since inception the Sharpe ratio of the fund is 1.86 (Index 0.44). The Fund returned 0.60% over January 2015 and 12.73% over the last 12 month and has recorded 80% of positive months (Index 64%). |
| More Information | » View detailed profile of this fund |
Monash Absolute Investment Fund
3 Feb 2015 - Australian Fund Monitors
Monash Absolute Investment Fund returned 1.50% during January in a more buoyant month for equity markets.
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3 Feb 2015 - Monash Absolute Investment Fund
By: Australian Fund Monitors
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| Fund Overview | The fund seeks to identify opportunities in the share market to make positive returns (long and short) irrespective of market conditions. It is style agnostic, as compelling investment opportunities exist across all investment styles from time to time. The Fund places a high priority on capital preservation, and has an absolute return focus in accepting market risk. The Manager's experience across value, growth and discounted cash flow styles allows them to use a comprehensive approach to investment decisions that applies all three. They also have the patience to seek out only compelling opportunities, rather than settling for relative value. The portfolio is somewhat concentrated, looking to diversify across industries and themes, rather than by trying to stay near an index. The portfolio may at times have a large amount of cash or other protection. However once investments are made turnover may be relatively high in order to lock in gains and avoid losses. |
| Manager Comments | The Fund had a net exposure of 85% and gross exposure of 110% at month-end and a VaR of 1.0%. Since inception (May 2012) Sharpe and Sortino ratios are 1.52 and 3.39 respectively. As we move into the February reporting season we have increased the weights in a number of our 'outlook' stocks. The number of 'event' trades in the portfolio has also picked up. Equity Beta has fallen to half that of the market. |
| More Information | » View detailed profile of this fund |
KIS Asia Long Short Fund
2 Feb 2015 - Australian Fund Monitors
KIS Asia Long Short Fund returned 0.26% during December and 4.76% for 2014 with a volatility of 2.72%.
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2 Feb 2015 - 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 | The Fund has returned 15.16% since inception in October 2009 with a volatility of 5.46%, Sharpe ratio of 2.00 and Sortino ratio of 4.53%. The surprise announcement by the Swiss National Bank regarding the removal of the peg of the Swiss Franc to the Euro has led to less reported significant losses than we would expect. There have obviously been winners and losers but we were surprised not to see an announcement from a corporate of any significant losses as a result of the move. This move emphasizes how dependent the markets have become on well flagged and considered moves by central bankers. We remain unconvinced that the financial measures that have been introduced, such as quantitative easing, actually stimulate the economy. These measures often artificially support financial asset prices, maybe that is their main aim; economies do not tend to thrive as financial asset prices crash! |
| More Information | » View detailed profile of this fund |
Avenir Capital Value Fund
30 Jan 2015 - Australian Fund Monitors
Avenir Value Fund returned -4.42% during December 2014 with annual performance of 15.38% and volatility of 11.11% since inception.
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30 Jan 2015 - Avenir Capital Value Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in securities where Avenir believes the company is simply mis-priced and deeply undervalued and offers significant potential for revaluation. The Fund will also invest in companies that are subject to specific corporate events such as mergers, acquisitions, restructurings, recapitalisations, spin-offs, demergers, management change, distressed situations, and other sharply delineated corporate events. The Fund will also selectively invest in short positions in companies where Avenir believes the company is significantly overvalued or where the company's business model is broken or structurally challenged. |
| Manager Comments | The Fund's Sharpe and Sortino ratio are 1.07 (Index 0.69) and 1.77 (Index 0.96) respectively. At month-end the Fund's geographic exposure was US 42%, W. Europe 13% Asia 14% Australia 1%, Other 10% with cash at 22%. |
| More Information | » View detailed profile of this fund |
