Fund Review: Bennelong Long Short Equity Fund November 2018

12 Dec 2018 - Australian Fund Monitors

Latest Fund Review for the Bennelong Long Short Equity Fund is now available. The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index...

Bennelong Twenty20 Australian Equities Fund November 2018

11 Dec 2018 - Australian Fund Monitors

The latest Fund Review on Bennelong Twenty20 Australian Equities Fund is now available. The Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of ex-20 stocks.

Fed's Bad Santa

10 Dec 2018 - Geoff Wood, Morphic Asset Management

In our office, we have switched from Secret Santa to Bad Santa. In Bad Santa, each member of the office draws a number from a hat. The lowest number then starts by picking and opening a present from a pile of wrapped presents. The next...

Hedge Clippings - 7 December, 2018

7 Dec 2018 - Australian Fund Monitors

There's not much good news around unless you're an extreme, and possibly unrealistic, optimist!

7 Dec 2018 - Hedge Clippings - 7 December, 2018

By: Australian Fund Monitors

There's not much good news around to welcome Santa!

Nearly every economist got this week's GDP figures for the September quarter wrong (+0.3% and 2.8% YoY). Now there's speculation that the R word will be back on the agenda. And if not a Recession, then possibly a slowdown, and rate cuts down the track from the RBA if the December quarter figures are equally disappointing. That's a big turnaround in expectations, even if most experts weren't expecting an upward movement in rates any time soon.

Anecdotally, based on going to a department store earlier this week, and worse still, a shopping mall, (which Hedge Clippings generally tries to avoid like the plague unless absolutely necessary) there doesn't seem to be much Christmas cheer running through retailers' cash registers. Maybe consumers are all shopping online, maybe they're waiting until the last moment (like yours truly), but quite possibly they're just pulling their heads in.

Why? Because as noted above, there's not much good news around unless you're an extreme, and possibly unrealistic optimist!

As recently as May this year one of the (so called) expert real estate commentators downgraded their 2018 housing price forecast on a weighted capital city basis to between -2% to +2%. Fast forward just 6 months and with the property market down 10% they're realising a further 10% fall is not out of the question as banks pull their heads (sorry, lending criteria) in and faith in the financial markets has been tested by the exposure of the Hayne Royal Commission on the front pages and TV nightly news.

Irrespective of one's political preferences there's a general lack of confidence in our glorious pollies, and an election, and a change in government is just around the corner.

Globally the Trump / China spat is far from resolved, creating uncertainty in US markets. Brexit is uncertainty personified, and even the German economy - not long ago the envy of the world - is suffering.

In the US, 10 year bond yields, having recently threatened to rise above 3.5% and spoil the equity market's party, are now threatening to fall below 3% based on concerns about a US slowdown in 2019. The yield curve is close to inverting as 10 and 2 year bond rates are dangerously close to each other.

Every US recession for more than half a century has been preceded by an inversion of the curve, although to be accurate not every inversion has been succeeded by a recession.

Could the unthinkable - an end to Australia's record growth run - happen? Hopefully not, but there are enough signs, and opinions pointing in that direction, that it would be unwise to rule it out completely.

You Have Been Warned

7 Dec 2018 - Marcel von Pfyffer, Arminius Capital

For the last twelve months Arminius has been pointing out that the next financial crisis is fast approaching, and that it will be very different from the GFC. The GFC was a banking crisis triggered by massive defaults on securitised...

Performance Report: NWQ Fiduciary Fund

6 Dec 2018 - Australian Fund Monitors

The NWQ Fiduciary Fund returned -3.44% in October, outperforming the ASX200 Accumulation Index by +2.51% and taking 12-month performance to +3.59%.

6 Dec 2018 - Performance Report: NWQ Fiduciary Fund

By: Australian Fund Monitors

Report Date	06 December 2018
Manager	NWQ Capital Management Pty Ltd
Fund Name	NWQ Fiduciary Fund
Strategy	Multi Strategy
Latest Return Date	October 2018
Latest Return	-3.44%
Latest 6 Months	-2.68%
Latest 12 Months	3.59%
Latest 24 Months	8.96%
Annualised Since Inception	6.03%
Inception Date	01 May 2013
FUM (millions)	AU$79
Fund Overview	The NWQ Fiduciary Fund (Fund), managed by NWQ Capital Management, is a diversified multi-manager portfolio, modelled on NWQ's Fiduciary Model Portfolio. The principal investment objective of the Fund is to produce attractive positive returns irrespective of market direction. This is achieved through active allocations to selective fund managers that employ a variety of traditional and absolute return strategies. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record. The Fund aims to produce returns, after management fees and expenses of between 8% to 11% p.a. over rolling five-year periods. Furthermore, the Fund aims to achieve these returns with volatility that is a fraction of the Australian equity market, in order to smooth returns for investors.
Manager Comments	The NWQ Fiduciary Fund returned -3.44% in October, outperforming the ASX200 Accumulation Index by +2.51%. Over the past 12 months the Fund has risen +3.59% with a volatility of 4.98 versus the Index's return of 2.94% with a volatility of 9.43%. The Fund's Sortino ratio of 1.39 versus the Index's 0.61 and down-capture ratio of 1.62% highlight the Fund's capacity to avoid the market's downside and hence protect investors' capital. NWQ noted amidst the October turmoil there was a sharp rotation from high-quality growth stocks, which are those expected to outperform in the medium to long term and are typically favoured by the Fund's underlying managers, into defensive value stocks, which are typically candidates for being shorted by the Fund's underlying managers. As a result of this rotation, the short portfolio did not provide sufficient hedge to offset the losses in the long portfolio. NWQ noted there are positive early signs in November that this rotation is reversing. The NWQ Fiduciary Fund is a diversified multi manager portfolio. The principal investment objective of the Fund is to produce attractive positive returns irrespective of market direction. This is achieved through active allocations to selected Australian equity fund managers that employ a variety of traditional and absolute return strategies. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record.
More Information	Fund Profile Manager's Report

Performance Report: Wheelhouse Global Equities Income Fund

5 Dec 2018 - Australian Fund Monitors

The Wheelhouse Global Equity Income Fund has returned +9.84% over the past 12 months versus AFM's Global Equity Index's +7.75%. This has been achieved with a volatility of 7.72% versus the Index's 9.36%.

5 Dec 2018 - Performance Report: Wheelhouse Global Equities Income Fund

By: Australian Fund Monitors

Report Date	05 December 2018
Manager	Wheelhouse Investment Partners, a Bennelong boutique
Fund Name	Wheelhouse Global Equities Income Fund
Strategy	Equity Income
Latest Return Date	October 2018
Latest Return	-4.39%
Latest 6 Months	5.29%
Latest 12 Months	9.84%
Latest 24 Months
Annualised Since Inception	7.69%
Inception Date	26 May 2017
FUM (millions)	AU$6.99
Fund Overview	The strategy of the Fund is based on the Morningstar Developed Markets ex Australia Wide Moat Focus Index ('Morningstar Portfolio'). However, in addition to this, it is designed to deliver returns with lower volatility, improved capital preservation, and higher income generation as a component of total return. 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 Wheelhouse Global Equity Income Fund has returned +9.84% over the past 12 months versus AFM's Global Equity Index's +7.75%. This has been achieved with a volatility of 7.72% versus the Index's 9.36%. The Fund's up-capture and down-capture ratios over the past 12 months indicate that, on average, the Fund has captured almost 80% of the market's upside and only 47% of its downside. The Fund returned -4.39% in October, ahead of the benchmark (MSCI World Index ex Australia) return of -5.40%. This return comprised a return of -6.34% from the portfolio (in USD) and a positive return of +1.95% from the weakening of the Australian dollar against the US dollar. The Wheelhouse Global Equity Income Fund is designed to deliver equity returns with higher income generation and active downside protection. 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 intend for returns to add relative value in weak and low-growth markets and to drag in more positive markets.
More Information	Fund Profile Manager's Report

Performance Report: Bennelong Emerging Companies Fund

5 Dec 2018 - Australian Fund Monitors

The Bennelong Emerging Companies Fund has returned +19.93% over the past 12 months versus the ASX200 Accumulation Index's +2.94%.

5 Dec 2018 - Performance Report: Bennelong Emerging Companies Fund

By: Australian Fund Monitors

Report Date	05 December 2018
Manager	Bennelong Australian Equity Partners (BAEP), a Bennelong boutique
Fund Name	Bennelong Emerging Companies Fund
Strategy	Equity Long
Latest Return Date	October 2018
Latest Return	-12.03%
Latest 6 Months	0.65%
Latest 12 Months	19.93%
Latest 24 Months
Annualised Since Inception	19.93%
Inception Date	01 November 2017
FUM (millions)	AU$13.54
Fund Overview	The Fund invests in ASX-listed securities of small and micro capitalised companies that are covered by the investment research capabilities of Bennelong Australian Equity Partners ('BAEP'). 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 has returned +19.93% over the past 12 months versus the ASX200 Accumulation Index's +2.94%. The Fund's Sharpe and Sortino ratios, 0.84 and 1.23 respectively, by contrast with the Index's Sharpe of 0.20 and Sortino of 0.19, highlight the Fund's capacity to achieve superior risk-adjusted returns in both rising and falling markets. In addition, the Fund's up-capture ratio of 241.1% indicates that, on average, the Fund has captured more than double the market's performance in the months the market has risen. The Fund's top holdings as at the end of October were Baby Bunting, Clover, Helloworld, Cml and Pinnacle Investment Management. The Fund invests predominantly in micro and small-cap stocks listed on the ASX. It is managed via a research-intensive and predominantly bottom-up investment approach. The Fund focuses on high quality stocks and seeks to avoid the higher risk that usually comes with micro and small-cap stocks.
More Information	Fund Profile Manager's Report

Performance Report: Insync Global Capital Aware Fund

4 Dec 2018 - Australian Fund Monitors

The Insync Global Capital Aware Fund has returned +9.98% over the past 12 months versus AFM's Global Equity Index's +7.75%. This return has been achieved with a similar level of volatility and includes the cost of fees and put protection.

4 Dec 2018 - Performance Report: Insync Global Capital Aware Fund

By: Australian Fund Monitors

Report Date	04 December 2018
Manager	Insync Fund Managers
Fund Name	Insync Global Capital Aware Fund
Strategy	Equity Long
Latest Return Date	October 2018
Latest Return	-5.82%
Latest 6 Months	3.32%
Latest 12 Months	9.98%
Latest 24 Months	31.91%
Annualised Since Inception	9.86%
Inception Date	07 October 2009
FUM (millions)	AU$28.7
Fund Overview	Insync's investment strategy is driven by fundamentals combined with active risk management with the aim of to investing in high quality, large cap global companies at attractive prices. Insync looks for companies that can consistently pay rising dividends and earn high returns on invested capital. Insync aims to provide investors with long term capital growth and some income. The Global Capital Aware Fund is a concentrated portfolio of large cap global companies with downside protection. 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 Insync Global Capital Aware Fund has returned +9.98% over the past 12 months versus AFM's Global Equity Index's +7.75%. This return has been achieved with a similar level of volatility and includes the cost of fees and downside protection. Since inception in October 2009, the Fund has returned +9.86% per annum after fees and protection versus the Index's +10.89%. The Fund's strength in protecting investor capital from market falls is demonstrated by the Fund's down-capture ratio since inception of 54.1%, indicating that, on average, the Fund has only fallen half as much as the market during negative months. This trend is consistent for the Fund's performance over the past 12, 24, 36, 48 and 60 months. The Fund posted -5.82% after fees and downside protection in October. Insync noted that, unlike most long-only managers, they don't have a high cash allocation in the Fund should they believe danger lies ahead in shorter term valuations. They believe this enables them to maximise returns by staying focused on longer term outcomes. Additionally, Insync add that, given the indirect way in which they tend to gain exposure to the many positive trends occurring within several emerging markets, the current negative turmoil they are facing has had a very limited negative impact on the Fund. 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.
More Information	Fund Profile Manager's Report AFM Research Reports

Performance Report: Glenmore Australian Equities Fund

4 Dec 2018 - Australian Fund Monitors

The Glenmore Australian Equities Fund has risen +14.68% over the past 12 months versus the ASX200 Accumulation Index's +2.94%. Since inception in June 2017, the Fund has returned +24.87% per annum.

4 Dec 2018 - Performance Report: Glenmore Australian Equities Fund

By: Australian Fund Monitors

Report Date	04 December 2018
Manager	Glenmore Asset Management Pty Ltd
Fund Name	Glenmore Australian Equities Fund
Strategy	Equity Long
Latest Return Date	October 2018
Latest Return	-8.70%
Latest 6 Months	6.24%
Latest 12 Months	14.68%
Latest 24 Months
Annualised Since Inception	24.87%
Inception Date	06 June 2017
FUM (millions)	AU$5.4
Fund Overview	The Fund is index unaware with an absolute return focus. The Fund seeks to invest in companies generating strong cashflows at attractive valuations. In absence of attractive investments being identified, the fund will hold cash. Glenmore will use a fundamental, research driven investment process to identify undervalued securities. 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 Glenmore Australian Equities Fund has risen +14.68% over the past 12 months versus the ASX200 Accumulation Index's +2.94%. Since inception in June 2017, the Fund has returned +24.87% per annum versus the Index's +5.57% per annum. The Fund's Sharpe and Sortino Ratios, 1.72 and 2.67 respectively, by contrast with the Index's Sharpe of 0.51 an Sortino of 0.63 for performance over the same period, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst ensuring investors' capital is protected from the market's downside. The Fund's up-capture and down-capture ratios since inception, 200.74% and 39.24% respectively, indicate that, on average, the Fund has performance twice as well as the market in rising markets whilst falling less than half as much as the market in negative months. The Fund returned -8.7% in October. This return was driven by a large number of portfolio stocks falling by more than 5% despite no company-specific announcements. Glenmore noted sentiment was the dominant driver of stock prices during the month, with the result that most stocks' prices declined regardless of business quality and earnings growth prospects. In particular, small/mid cap stocks (which the Fund has a strong exposure to) were sold off much more than larger cap stocks, with the Small Ords Accumulation Index declining -9.6%. Glenmore added that it is frustrating to see good quality businesses falling 10-20% on no news, however, they believe at times investors must be willing to incur periods of underperformance in order to achieve above average long-term returns. Key detractors included Pinnacle Investment Management (-30.6%), WorleyParsons (-24.7%) and Navigator Global Investments (-16%). Glenmore remain confident in the composition of the portfolio. Importantly, they noted that during the month there were no negative announcements regarding operational performance from any of the Fund's investments.
More Information	Fund Profile Manager's Report

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12 Dec 2018 - Fund Review: Bennelong Long Short Equity Fund November 2018

11 Dec 2018 - Bennelong Twenty20 Australian Equities Fund November 2018

10 Dec 2018 - Fed's Bad Santa

7 Dec 2018 - Hedge Clippings - 7 December, 2018

7 Dec 2018 - You Have Been Warned

6 Dec 2018 - Performance Report: NWQ Fiduciary Fund

5 Dec 2018 - Performance Report: Wheelhouse Global Equities Income Fund

5 Dec 2018 - Performance Report: Bennelong Emerging Companies Fund

4 Dec 2018 - Performance Report: Insync Global Capital Aware Fund

4 Dec 2018 - Performance Report: Glenmore Australian Equities Fund

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