NEWS
14 May 2019 - Performance Report: NWQ Fiduciary Fund
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Fund Overview | 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 'melt up' as the S&P500 entered new territory was a tailwind for the Fund's Beta managers, however, it was a more challenging environment for the Alpha managers with fundamentally supported relative value opportunities scarce as stocks rose indiscriminately. NWQ noted the trend of desynchronization in growth outlooks and policy settings across the major global economies continued in April. They pointed out the latest manufacturing PMI data (a barometer of economic activity) indicates that the US economy is relatively strong compared with those in Europe and Asia. However, they added, due to stubbornly low inflation in the US, traders are betting the next move from the Fed will be a rate cut. |
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14 May 2019 - Performance Report: Cyan C3G Fund
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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 | Top contributors in April included Alcidion, Freelancer, and Readcloud. Key detractors included Atomos and Jaxsta. Cyan have met with all of their core holdings in the past couple of months and remain excited about their medium-term outlooks. They reiterate that, whilst month-to-month volatility can be expected, they have a firm view of long-term opportunity and remain confident in the outlook for the Fund into the future. |
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13 May 2019 - Performance Report: Bennelong Kardinia Absolute Return Fund
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Fund Overview | The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. Detailed analysis of company valuations using financial statements and forecasts, particularly focusing on free cash flow, is conducted. Technical analysis is used to validate the Manager's fundamental research and valuations and to manage market timing. A significant portion of the Fund's overall performance can be attributed to the attention and importance given to the macro economic outlook and the ability and willingness to adjust the Fund's market risk. |
Manager Comments | Top contributors included A2 Milk (+35 basis point contribution), Polynovo (+23bp), Afterpay (+17bp) and Macquarie Group (+16bp). Detractors included Northern Star (-15bp), Independence Group (-14bp), Charter Hall (-14bp), Fortescue Metals (-12bp), Rio Tinto (-10bp) and Oz Minerals (-10bp). The short book made a negative contribution of -46bp, with shorts in financials and Share Price Index Futures the key detractors. Net equity market exposure was increased from 38.9% to 51.5% (57.0% long and 5.6% short), with the key changes being new positions in Commonwealth Bank, Fortescue and Rhipe, increased weightings in Macquarie Group, A2 Milk and Polynovo, and a reduction in several short positions, including Share Price Index futures contracts. |
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13 May 2019 - Performance Report: NWQ Global Markets Fund
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Fund Overview | This is achieved through active allocations to a select number of liquid alternative managers that employ a variety of strategies. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record. |
Manager Comments | The Fund's currency and equities exposures delivered strong positive returns in April with contributions from the relative value positioning in both developed and developing market currencies and relative value positioning in European equities vs. US equities. The Fund's fixed income positions combined to produce a modest loss while there was a small gain overall from the Fund's commodities positions. NWQ noted the trend of desynchronization in growth outlooks and policy settings across the major global economies continued in April. They pointed out the latest manufacturing PMI data (a barometer of economic activity) indicates that the US economy is relatively strong compared with those in Europe and Asia. However, they added, due to stubbornly low inflation in the US, traders are betting the next move from the Fed will be a rate cut. Against this backdrop there were positive contributions to the Fund's overall return from both the systematic (+1.49%) and discretionary (+0.84%) managers. |
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10 May 2019 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
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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 the portfolio made quick time in recouping a significant portion of March's losses. The gain was attributed mainly to two positions that showcased the additional upside the strategy has in the presence of competing bids. The remainder of the portfolio saw broad based gains that rounded out a strong month. Harvest Lane believe corporate activity levels continue to show strength and the portfolio remains well positioned to capitalise for the remainder of the financial year and beyond. |
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10 May 2019 - Performance Report: Bennelong Long Short Equity Fund
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Fund Overview | In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. The Bennelong Market Neutral Fund, with same strategy and liquidity is available for retail investors as a Listed Investment Company (LIC) on the ASX. |
Manager Comments | Bennelong noted Fund volatility continued to settle down in April. At the sector level Consumer Discretionary was the strongest contributor and Healthcare was the greatest detractor, with both similar in magnitude. More than half of the Fund's pairs were positive, with both positive and negative pair returns generally muted. Top pairs included long Magellan / short Perpetual and long Caltex / short Viva Energy. The worst performing pairs included long Ramsay Health Care / short Healius and long Challenger / short IOOF/ANZ. |
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7 May 2019 - Fund Review: Bennelong Long Short Equity Fund April 2019
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index, with over 16-years' track record and an annualised returns of 14.93%.
- The consistent returns across the investment history highlight the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 0.89 and 1.44 respectively.
For further details on the Fund, please do not hesitate to contact us.
6 May 2019 - Why conventional wisdom regarding China is wrong
3 May 2019 - Hedge Clippings | 03 May, 2019
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3 May 2019 - Performance Report: Insync Global Quality Equity Fund
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Fund Overview | 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 typically of 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. |
Manager Comments | The Insync Global Quality Equity Fund rose +2.16% in March, outperforming AFM's Global Equity Index by +0.93% and taking annualised performance since inception in October 2009 to +12.74% versus the Index's +11.06%. The Fund's Sharpe and Sortino ratios, 1.00 and 1.90 respectively, by contrast with the Index's Sharpe ratio of 0.84 and Sortino ratio of 1.40, highlights the Fund's capacity to achieve superior risk-adjusted returns whilst avoiding the market's downside volatility. In addition, the Fund's down-capture ratio of 60.35% indicates that, on average, the Fund has outperformed in falling markets since inception. The Global Quality Equity Fund differs from the Global Capital Aware Fund only in that it has no put-protection, otherwise the portfolio and strategy are exactly the same. Positive contributors in March included Accenture, Intuit, Visa, Amadeus IT and Tencent. Negative contributors were RELX, Boston Scientific, Wirecard AG, Twenty-First Century Fox - B and Biogen Idec. No currency hedging continues across both the Global Capital Aware Fund and the Global Quality Equity Fund as Insync consider the main risks to the Australian dollar to be on the downside. |
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