NEWS
Fund Review: Supervised High Yield Fund Sept 2014
24 Oct 2014 - Australian Fund Monitors
Supervised High Yield Fund returned 0.31% in September and 6.60% for the prior 12 months compared to the RBA Cash Rate of 2.50% over that period. Volatility over the year was 0.73% and all months recorded positive returns.CPD Points are...
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24 Oct 2014 - Fund Review: Supervised High Yield Fund Sept 2014
By: Australian Fund Monitors
Supervised High Yield Fund AFM Review Sept 2014 (pdf format)
SUPERVISED HIGH YIELD 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 Supervised High Yield Fund (SHYF) has a 5 year track record investing in fixed interest investments. The Investment strategy aims to deliver returns with zero correlation to equity markets by investing in debt securities with minimal default probability and offering a premium return above the risk free rate.
- The Fund is managed by Philip Carden whose experience in debt and capital markets spans 32 years, including time with JB Were's Capel Court Securities and Macquarie Bank, where he was the Executive Director responsible for the Debt Markets Division.
- SHYF is an Alternative Income fund which invests in Global and Australian debt markets, with all foreign currency receivables hedged back to Australian dollars.
- The Fund utilises a top down analysis of the economic environment and market to screen and identify debt market opportunities which it believes offer low risk with high yield. The next stage is the development of a risk matrix and investment strategy, following which detailed research is undertaken on specific investment opportunities which meet the pre-defined criteria established in the investment strategy.
- Prior to approving an investment for the Fund each potential investment is subject to two stress tests. The first of these is for credit and default risk, in which the investment is stress-tested to ensure that in a worst case economic environment it can repay 100% of its principal and interest obligations case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided The second test examines market risk. In this case Carden looks at the worst case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided.
Research and Database Manager
Australian Fund Monitors
Supervised High Yield Fund AFM Review Sept 2014 (pdf format)
Aurora Fortitude Absolute Return Fund
24 Oct 2014 - Australian Fund Monitors
In a weak month for domestic equities, which fell 5.38%, the Aurora Fortitude Absolute Return Fund returned -0.07% with a volatility of 0.98%.
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24 Oct 2014 - Aurora Fortitude Absolute Return Fund
By: Australian Fund Monitors
Supervised High Yield Fund AFM Review Sept 2014 (pdf format)
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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 (Feb 2005) Sharpe and Sortino ratios are well above the Index at 1.13 and 2.30. Our Fund produced a small draw-down (-0.07%). Increased uncertainty and the increase in option prices benefited our Option Strategy (+0.25%). The most significant contributions came from downside exposure to high yielding names such as the major banks and Telstra. Our analysis shows that it is extremely rare for the market to have a fall of this extent without significantly higher realisable volatility (please contact us for a copy of this study) and as a result the steady nature of the sell-off made it difficult to realise any significant gains on the broader market. |
| More Information | » View detailed profile of this fund |
Supervised High Yield Fund AFM Review Sept 2014 (pdf format)
Fund Review: Morphic Global Opportunities Fund September 2014
23 Oct 2014 - Australian Fund Monitors
The September Fund Review shows performance at 3.20% for the Morphic Global Opportunities Fund well ahead of the domestic equity Index (down 5.38%) and a 12 month Sharpe ratio of 1.73. CPD Points available.
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23 Oct 2014 - Fund Review: Morphic Global Opportunities Fund September 2014
By: Australian Fund Monitors
MORPHIC GLOBAL OPPORTUNITIES FUND
Attached is our most recently updated Fund Review on the Morphic Global Opportunities 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.
Key points include:
- The Fund is a global equity long/short manager with a long bias and a macro-economic overlay. The mandate allows the Fund to short sell, use derivatives and invest in assets such as commodities & currencies.
- Morphic's philosophy is that only funds with flexible investment and hedging strategies will be able to deliver acceptable, steady, real, absolute returns over the investment cycle.
- The Fund is an early stage, boutique, Sydney-based fund established in 2012 with experienced CIO's, and an investment team of 6 including a risk manager.
- The Board has a majority of independent members with significant risk and investment experience.
For further details on the Fund, please do not hesitate to contact us.
Sean Webster
Research Manager
Australian Fund Monitors
Nanuk Global Alpha Fund
23 Oct 2014 - Australian Fund Monitors
Nanuk Global Alpha Fund returned -1.69% in September, a difficult month in which global equities fell 2.9%, with the Fund's twelve month return 8.86%.
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23 Oct 2014 - Nanuk Global Alpha Fund
By: Australian Fund Monitors
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| Fund Overview | In 2013 Nanuk started to expand the focus of the fund away from just energy and include other industries related to the overarching theme of environmental sustainability, specifically water, waste, recycling, pollution control and agriculture. Nanuk is now investing across a universe in excess of 600 stocks and an aggregate market capitalisation over US$2 trillion. This was a logical move because, while the industries themselves are different, their characteristics and long term drivers are very similar. Nanuk has identified a large, diverse global universe of companies positively exposed to these shifts. Nanuk combines deep fundamental research into these companies with detailed analysis of technological development, policy direction and related economics within each of the relevant sectors to identify profitable trends and opportunities suitable for inclusion in the Fund. Nanuk's principal strategy is to invest, long and short, in securities that are mis-priced on an absolute or relative basis. The Fund aims to achieve long term capital appreciation while reducing volatility of returns and risk of capital loss through appropriate hedging and risk management strategies. |
| Manager Comments | The key contribution to negative performance were long positions in the solar sector, and to smaller capitalisation stocks in Hong Kong and the US. The fund's exposure to the the solar sector was increased following the publication of what we believe is a highly favourable policy announcement in China, but the sector suffered from market weakness in Hong Kong, where a number of our holdings were listed, and an adverse policy development in Japan, where a number of utilities announced the suspension of applications for the grid connection of new solar projects. |
| More Information | » View detailed profile of this fund |
Fund Review: Monash Absolute Investment Fund Sept 2014
22 Oct 2014 - Australian Fund Monitors
Monash Absolute Investment Fund declined 4.30% in September and returned 8.26% for the previous 12 months. The Fund's investment strategy is best described as long biased, equity long-short, with a strong focus on absolute returns rather...
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22 Oct 2014 - Fund Review: Monash Absolute Investment Fund Sept 2014
By: Australian Fund Monitors
MONASH ABSOLUTE INVESTMENT FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile
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:
- The Fund is a research driven, active equity long/short strategy investing in listed ASX companies.
- 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.
For further details on the Fund, please do not hesitate to contact us.
Sean Webster
Research Manager
Totus Alpha Fund
22 Oct 2014 - Australian Fund Monitors
Totus Alpha Fund returned 1.02% in September a month in which domestic equities fell 5.38%, bringing the annual performance to 30.85%.
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22 Oct 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 | The prospect of the US Federal Reserves "QE3" ending in this month has seen a spike in volatility, a rally in the US$, a strong bid to government bonds (falling yields) and a sharp correction in many "risk" assets around the globe (US small caps, commodities, junk debt, the A$ to name in few). The fact that IMF is downgrading global growth forecasts (particularly in Europe) and that central bankers appear to be content with "jawboning" markets rather than taking action has added to the excitement. In isolation none of these events is particularly concerning but taken together they look to us like deflation (i.e. falling asset prices). In this kind of environment the ability to protect capital via short selling (which we see as one of our core competencies) becomes increasingly valuable. |
| More Information | » View detailed profile of this fund |
Fund Review: Bennelong Kardinia Absolute Return Fund Sept 2014
21 Oct 2014 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund fell
-0.31% in Sept. Net equity market exposure (including derivatives) averaged around 55% during the month, but was reduced to 36% at month end. CPD Points are now available.
-0.31% in Sept. Net equity market exposure (including derivatives) averaged around 55% during the month, but was reduced to 36% at month end. CPD Points are now available.
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21 Oct 2014 - Fund Review: Bennelong Kardinia Absolute Return Fund Sept 2014
By: Australian Fund Monitors
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.
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.
- The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies with an eight year track record.
- The Bennelong Kardinia Absolute Return Fund fell -0.31% in September. Net equity market exposure (including derivatives) was progressively decreased to 21.7% (47.6% long and 25.8% short) at month-end. Short positions in Share Price Index Futures contracts (hedging market risk), AGL Energy and Metcash were the largest positive contributors, whilst long positions in Oil Search, Challenger and Crown Resorts were the largest detractors from performance.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Mark Burgess and Kristiaan Rehder have significant market experience, while the Bennelong Group provide infrastructure, operational, compliance and distribution capabilities.
For further details on the Fund, please do not hesitate to contact us.
Sean Webster
Research Manager
Auscap Long Short Australian Equities Fund
21 Oct 2014 - Australian Fund Monitors
Auscap Long Short Australian Equities Fund delivered -2.09% in weak month for equities (ASX 200 Acc -5.38%) and 34.01% for the year with volatility of 7.61%.
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21 Oct 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 | Average gross capital employed by the Fund was 148.9% long and 29.6% short. Average net exposure over the month was +119.3%. At the end of the month the Fund had 33 long positions and 12 short positions. The Fund's biggest stock exposures at month end were spread across the consumer discretionary, financials and materials sectors. The Fund's monthly report is entitled 'Global Steel Supply & Demand: Putting China In Context'. The Report begins 'There are many amazing statistics borne from China's phenomenal growth story over the last few decades, perhaps none more than those surrounding China's growth in the production and consumption of steel. And certainly for Australia's economy, there are few more important statistics.' The full report is available on the AFM website under the Fund's profile. |
| More Information | » View detailed profile of this fund |
The Paragon Fund
20 Oct 2014 - Australian Fund Monitors
The Paragon Fund returned 0.30% in September as compared to the ASX 200 Acc Index which fell 5.38% and the twelve month return was 33.18% (Index 5.93%) and a volatility of 13.87%.
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20 Oct 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 and Sortino ratios were 1.98 and 5.90 for the previous year with the Fund recording Up and Down Capture ratios of 1.31 and -0.65 respectively. Key drivers of the Paragon Fund performance for September included solid returns from LNG Ltd, short positions in the major Banks, Rio Tinto, Syrah Resources and Sirius Resources, offset by falls in Orocobre, G8 Education and TFS Corp. At the end of September the fund had 17 long positions and 12 short positions. The Fund's Monthly Report is headed Resources - Paragon's perspective and is on the AFM website under the Fund's profile. |
| More Information | » View detailed profile of this fund |
Alpha Beta Asian Fund
20 Oct 2014 - Australian Fund Monitors
Alpha Beta Asian Fund returned -0.70% during September, a weak month for global equity markets, and with the annual return 7.07% and a volatility of 3.99%.
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20 Oct 2014 - Alpha Beta Asian Fund
By: Australian Fund Monitors
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| Fund Overview | The investment objective of the Fund is to produce positive annual returns without excessive risk. This is achieved through the use of a quantitative approach to invest both long and short in large cap companies listed on Asian stock exchanges. The Fund may also use index futures to manage risk. Stock prices and company fundamental data are decomposed into directional and mean reverting components. Each of Alpha Beta's models are based on either of these known behaviours with capital management built into each model. The benefit of a quantitative approach is that it is both repeatable and unemotional, and allows a different source of returns to be extracted from a very noisy market environment. |
| Manager Comments | The Sharpe and Sortino ratios were 1.12 and 2.20 respectively over the last year. The since inception (June 2012) correlation to the MSCI Asia Pacific Index was 0.20 and the beta 0.11. At month-end the had a gross exposure of 164% and a net exposure of 17% across 375 positions. |
| More Information | » View detailed profile of this fund |
