NEWS
Pengana Asia Special Events (Onshore) Fund
1 May 2013 - Australian Fund Monitors
The Pengana Asia Special Events (Onshore) Fund returned 0.83% for March 2013 and 4.31% for the year to end-March.
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1 May 2013 - Pengana Asia Special Events (Onshore) Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund seeks to profit from trading securities which are primarily subject to corporate events or from trading-related securities which the Investment Manager believes are mispriced by the market. The Fund invests in securities that are listed on Asian stock markets and other markets where related securities may be listed and in securities which are listed on markets outside of Asia where more than 70% (by assets or earnings) of the underlying business originates from an Asian country. The Fund aims to generate consistently positive returns which have a low correlation to the Asian stock markets. The objective is to generate 10-20% pa with a standard deviation of 6-10% |
| Manager Comments | The Fund finished up 3.3% for the first quarter of 2013. Earnings Surprise was the biggest positive contributor to performance over the quarter, followed by the Mergers & Acquisitions (M&A) and Capital Management strategies. The Fund generated strong returns in most markets, particularly Singapore, Japan and China. The Fund’s gross and net exposure for March averaged 183% and 14% respectively. Approximately 30% of the gross exposure relates to M&A, with Capital Management, Earnings Surprise and Stubs trades also receiving meaningful allocations. Markets began the year upbeat with the “fiscal cliff” overhang in the US evaporating and investors welcoming the improved macroeconomic environment. In March, macro headwinds out of Cyprus dominated headlines, briefly spooking markets. Volatility, measured through the VIX index, spiked briefly in late February but spent most of the period in the 12 to 14 range. After a healthy start to the year in January and February in terms of M&A activity, March was a quiet month with the Fund getting involved in 2 new situations. However, the volatility in the market has created opportunities in other strategies and a greater capital allocation towards the Stubs sub-strategy in particular. We have a number of potential deal bump/re-rate situations in the M&A portfolio with visible short term catalysts. |
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BlackRock Multi Opportunity Fund
30 Apr 2013 - Australian Fund Monitors
The BlackRock Multi Opportunity Fund had a sound March 2013 with a return of 1.09% against its benchmark of 0.23%.
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30 Apr 2013 - BlackRock Multi Opportunity Fund
By: Australian Fund Monitors
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| Fund Overview | - Australian and International Equity Long/Short - Global Fixed Income Long/Short - Global Macro - Commodity Alpha - Alpha Transport The Fund's goal is to provide investors with a source of consistent, risk-controlled, absolute returns that are over time, expected to have low correlations with the returns of major asset classes. The Fund aims to achieve a return of 8% p.a. before fees, above the RBA Cash Rate Target over rolling 3 year periods. In order to achieve its expected return objective, the Fund will target a total expected risk of between 4-6% p.a. over the same rolling 3 year period. |
| Manager Comments | The manager notes that global markets started the year strongly with a broad rally in equities in the first quarter. Japanese equities out-performed most other markets, rallying 21% buoyed by anticipated aggressive monetary policy easing under the new Abe regime. US equities finished up 11%, while equity returns in Europe were more mixed; German equities finished up 3.7% and Italian equities ended the quarter 6.2% lower due to the uncertain Italian election outcome. Despite the rally in equities, bond prices in most major markets generally firmed as investors retreated to safe have bonds following a resumption of concerns in peripheral Europe with the banking sector bailout in Cyprus and weaker data across Europe. The Multi-Opportunity Fund delivered positive performance in the first quarter. The fund returned 2.78% versus the RBA cash benchmark return of 0.71%, thereby delivering alpha of 2.07%. This is a solid start for the 2013 year to date. The fund delivered positive returns in each of the 3 months of the quarter. The European Equity Long/Short, Fixed Income Global Alpha, Global Equity Long/Short, Global Macro and Commodity Long/Short strategies added value while International Alpha Transport was relatively flat and the Australian Equity Market Neutral strategies detracted from performance. |
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Pengana Australian Equities Market Neutral Fund
29 Apr 2013 - Australian Fund Monitors
The Pengana Australian Equities Market Neutral Fund had a good March 2013 returning 3.2% as compared to the S&P/ASX 300 Accum Index which fell 2.3%.
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29 Apr 2013 - Pengana Australian Equities Market Neutral Fund
By: Australian Fund Monitors
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| Manager Comments | Two of the Fund's largest long positions in March were McMillan Shakespeare and Sirtex Medical, while two of the largest short positions were Transpacific Industries and Duet. Momentum was the best performing investment theme in our model for the month followed by Quality with small contributions from Earnings Revisions and Value. Momentum captures share price movements that are based on previous performance over the longer and short terms. With most of the performance coming from the longer term component of this factor, stock prices in March continued to follow a low risk high yield theme as risk appetite clearly stays out of favour. While this theme has been continuing for some time, the manager is starting to see a more discerning market with increased focus on the underlying fundamental Quality of stocks and their ability to maintain dividend policies. While the market is less concerned with Earnings Revisions and Value themes at this point, the performance from shorter term Momentum themes particularly across the defensive sectors indicates that the market is beginning to be more selective with stocks where valuations are stretched and earnings growth remains weak. |
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Monash Absolute Investment Fund
26 Apr 2013 - Australian Fund Monitors
The Monash Absolute Investment Fund returned 2.00% during March and its six month return to 17.17%.
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26 Apr 2013 - Monash Absolute Investment Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund places a high priority on capital preservation, and have an absolute return focus in accepting market risk. The Manager employs a comprehensive approach to making investment decisions utilising value, growth and discounted cash flow styles. The portfolio is somewhat concentrated and the manager looks to diversify the portfolio across industries and themes rather than staying near an index. The portfolio may at times have a large amount of cash or other protection. |
| Manager Comments | At the end of the month the portfolio had nine Outlook Driven stocks, nine Event Driven stocks and two sets of Pairs Trades. Gross exposure was 71% and our net exposure was 61%. The portfolio continues to avoid well covered defensives, preferring cash if there is no better alternative. It has no Telstra, consumer staples or utilities. However, the manager would be happy to invest in yield stocks with reliable growth at the right price as a result the Fund owns only one bank, NAB (apart from a CBA/Westpac pair trade). At the other end of the risk spectrum, there are no large miners and the Fund continues to look for more growth stocks with compelling valuations. |
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Allard Investment Fund
24 Apr 2013 - Australian Fund Monitors
The Allard Investment Fund was impacted by the weaker Australian dollar, falling 2.1% for the month.
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24 Apr 2013 - Allard Investment Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund's performance is notable for its low level of volatility with five year annualised volatility of 9.7% as compared to the MSCI Asia Pacific ex Japan volatility over the same period of 14.8%. In terms of geographic exposures the Fund was allocated; China/Hong Kong 29.7%, Singapore 12.5%,Korea 9.7%, India 6.3% and others 2%. Notably cash and fixed income was 31.7% of the portfolio. In terms of industry the largest exposure was financial services 15.7% followed by conglomerates 12.2%, telecomms 8.0% and retail 6.4% with other sectors 26%. The Fund's top 5 holdings are 36.4% with the next five holdings 15.7%. |
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Auscap Long Short Australian Equities Fund
23 Apr 2013 - Australian Fund Monitors
The Auscap Long Short Australian Equities Fund recorded a strong return of 1.46% over March, well above the Fund's benchmark return of 0.25%.
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23 Apr 2013 - 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 161.7% long and 45.2% short. Average net exposure over the month was +116.5%. At the end of the month the Fund had 29 long positions and 11 short positions. The Fund’s biggest exposures at month end were spread across the consumer discretionary, industrials, property trust (financials subset), healthcare & materials sectors. The Fund’s positive performance was a result of exposure to a number of particular sectors. On the long side, the Fund was invested in select property trusts, telcos and utilities for their strong growing dividends and earnings certainty. The Fund also had positions in the media and consumer discretionary space as a play on a slowly recovering east coast economy. On the short side the Fund had select positions in the healthcare space where high expectations had not been met through the reporting season. The Fund has largely avoided sectors with a high degree of uncertainty and low visibility around future earnings, such as the mining sector. |
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Magellan Global Fund
22 Apr 2013 - Australian Fund Monitors
The Magellan Global Fund recorded a return of 1.92% during March 2013 taking the 12 month performance to 19.78%.
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22 Apr 2013 - Magellan Global Fund
By: Australian Fund Monitors
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| Manager Comments | The five largest stocks in the portfolio at the end of March were; Google Inc 6.1%, Tesco Plc 5.8%, Microsoft Corp 5.7%, Lowe's 5.3% and eBay Inc 5.2%. The top ten holdings were 52% of the portfolio. Over the quarter, all stocks held within the portfolio produced positive local currency returns. Within the top ten holdings, the three stocks with the strongest returns in local currency were Novartis (+22%), Target Corp (+16%) and McDonalds (+14%) while the three stocks in the top ten holdings with the weakest local currency returns were eBay (+6%), Lowes (+7%) and Microsoft (+8%). The significant changes to the portfolio during the quarter were the result of active portfolio management regarding relative valuation and opportunity cost. The Fund sold the entire position of General Mills which had appreciated materially since investment and purchased a new stock, Microsoft which is trading well below our assessed intrinsic value. The Microsoft position was subsequently increased to the top ten holdings during the quarter. The portfolio remains fully invested, reflective of the manager's comfort with the current macroeconomic environment and subsequent view that it remains an attractive time to be investing in a select portfolio of extremely high quality multinational companies. The manager remains focused on prudent portfolio construction with emphasis on the avoidance of aggregation of risk within the portfolio and believe that it is likely to exhibit substantially less downside risk than the market in the event that global markets deteriorate materially. Within the current macro environment the manager sees value in high quality companies exposed to certain investment themes. The portfolio has material exposure to the following themes: - Emerging market consumption growth via investments in multinational consumer franchises. - The move to a cashless society. There continues to be a strong secular shift from spending via cash and cheque to cashless forms of payments, such a credit cards, debit cards, electronic funds transfer and mobile payments. - Internet/e-commerce convergence. There are a number of internet enabled businesses that have very attractive investment characteristics with increasing competitive advantages. - US housing Recovery. A recovery in new housing construction should drive a strong cyclical recovery in companies exposed to US housing and also provide a strong boost to the overall economy. - US interest rates normalising over the next 3-5 years as the US economy recovers. |
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Platinum Unhedged Fund March 2013 performance report
18 Apr 2013 - Australian Fund Monitors
The Platinum Un-hedged Fund returned 0.69% during March 2013 and 8.69% pa since inception.
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18 Apr 2013 - Platinum Unhedged Fund March 2013 performance report
By: Australian Fund Monitors
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| Fund Overview | The Fund's Portfolio will typically have about 90% exposure to stocks. The Fund's Portfolio is constructed in accordance with 'Platinum's Investment Methodology', except that no market risk management of either markets or currencies will be undertaken. The geographic disposition of the assets will determine the Fund's currency exposure. The Fund's Portfolio is constructed by the senior analysts of Platinum's investment team under one analyst's chairmanship. Since inception, the Portfolio has generally held 50 stocks with limited commonality to the Platinum International Fund. On account of the relatively concentrated nature of the Portfolio, holdings that carry great conviction will generally be larger than in the Platinum's risk managed products (i.e. the other Platinum Trust Funds). The Fund may use Derivatives to achieve long equity exposure. |
| Manager Comments | The Fund is 94% invested (with no shorting) and its major exposures are 29.6% North America an 26.3% to Japan. Major sector exposures are to Information Technology (19.9%), Consumer Discretionary (15.6%) and Financials (14.2%). Exposures to Utilities and Telcos are both under 2% of the portfolio. Notably the two largest exposures are to Microsoft at 4.6% and Toyota at 3.3%. The manager's recently released quarterly report notes that while the Fund is built one stock at a time for the purpose of investor communication it is useful to group some of these holdings by theme. Currently these themes include; US capital spending renaissance driven by a globally competitive supply of natural gas, Explosive growth in mobile data, The rise of local emerging world consumer giants, Consumer globalisation - western brands, retailers and service providers positioned for global growth, Post-patent cliff pharmaceuticals and personalised medicine, Japanese relation driven by a broad consensus on the need for change, Gold- a hedge against a self-reinforcing cycle competitive quantitative easing (QE) from the three large developed world currency blocs. The manager's outlook for markets notes that there is some complacency creeping back into markets in the face of data disappointments, particularly, in the Japanese and European periphery. However Platinum remains cautiously optimistic that a combination of a continued recovery in US investment spending and loosening global monetary policy will be sufficient to offset a moderate level of global fiscal tightening. |
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BlackRock Australian Equity Market Neutral Fund
17 Apr 2013 - Australian Fund Monitors
The BlackRock Australian Equity Market Neutral Fund records a return of 1.29% during March and 7.69% for the twelve months to March 2013.
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17 Apr 2013 - BlackRock Australian Equity Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's portfolio primarily consists of long and short Australian equity positions. The Fund may also invest in other funds managed by BlackRock. Derivative securities, such as futures, forwards, swaps and options, can be used to manage risk and return Key insights into the investment process include: Analyst Expectations, Relative Valuation, Earnings Quality, Market Signals and Timing. Short-Term return enhancing opportunities including: Dividend reinvestment plans, Manging index changes, Managing cash flows and Arbitrage, Initial public offerings and Seasoned Equity Offerings and Off Market Buybacks. |
| Manager Comments | The S&P/ASX200 rose 6.8% (8.1% accumulation) over the March quarter, but finished March down -2.7%, the worst month for the market since May 2012. There was some profit taking across much of the industrials after a very strong quarter, with the Cypriot banking crisis renewing global nervousness about the fragility of the European financial system. March also saw continued weakness in the resources sector due to uncertainty over the Chinese growth outlook and fears that rising commodity supply over the next two years could drive much weaker commodity prices. Domestically the economy showed some muted signs of strength, with improvements in consumer confidence, housing market activity and labour data causing the RBA to pause its easing cycle. Domestic cyclicals, especially consumer discretionary stocks, continued to outperform in March on anticipation of a turnaround in consumer spending. The search for yield was another theme that continued into March, concentrated largely in banks (+16.4%). The February reporting season highlighted companies’ focus on cost cutting, with margin expansion driving significant stock specific earnings improvements. The portfolio was largely unaffected by the global macro themes this quarter, however the Fund was caught in the first half of January by the sharp rally in specific domestic cyclical sectors (building materials, diversified financials) on anticipation of a domestic recovery. Performance since then has been dominated by stock specifics. The contribution from industry and risk factors was positive, while security specific returns detracted value over the quarter. |
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Optimal Australia Absolute Trust
16 Apr 2013 - Australian Fund Monitors
The Optimal Australia Absolute Trust had a flat return for March 2013 and a return of 1.37% for the year-ended March.
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16 Apr 2013 - 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 | Australian equities gave back part of their recent strong gains in March, and underperformed most other developed world equity markets. The Trust finished the month with a flat return. The manager comments that they had felt markets were due a pause, and maintained low net exposure for most of the month. Further they comment that investors need to be clearly aware that equity markets remain in thrall to central bank bond-buying and the consequent strangulation of interest rates. The impact of these policies on economic growth is unconvincing, but they have certainly served to distort liquidity flows and capital allocation on a grand scale. This has come as a boon to equity markets, which have re-rated earnings yields and dividend yields downwards in step with falling bond yields. But, in the absence of real growth, equity markets may be worshipping a false god. This environment is dangerous from the perspective of capital preservation, and increasingly so, because it requires wilful suspension of any risk consideration by equity investors other than “relative value” as measured against a highly artificial bond/cash yield construct. The manager has previously written at length about the unusually narrow breadth of market leadership in Australia, and the unusual concentration of returns in a handful of defensive/yield leaders. These trends continued through most of March, with Financials finishing the month flat, and Materials down another 10.5%. On a rolling year basis, Financials are up 29% and Materials are down 15%, while Consumer Staples are up 30%, Telcoms 37%, and Healthcare 43%. The manager comments that with an investment process grounded to a large extent in fundamental valuation, they are unable to buy grocery retailers at between 18-20x forward earnings, with low and declining earnings growth, with asset level ROIC that has already been rebased up sharply, and with the prospect of increasing competition and regulatory risk. Similarly, they could not regard dividend yield sourced from highly-leveraged financial equity featuring 70%+ payout ratios, astonishingly low credit loss provisions, and price-to-book multiples of 2-3x as a logical substitute for fixed income yield, even ignoring the apples/oranges duration mismatch. Yet it has been just those investments that have clearly paid, but, again, to an overwhelming extent, only due to the revaluation of yield. The performance gap between defensive industrials and resources stocks continues to confound the manager. This gap has reached levels unprecedented in Optimal's experience, at least for those time intervals when Chinese demand data points seem to be stabilising, and when the market has already worked itself into lather over well-advertised supply additions in the bulk commodity group. Major contributors to the Trust’s return for the month by industry sector included: Longs (-0.26% attribution) Positive: transport, media, gold, banks Negative: resources, energy, REITs. Shorts (0.29% attribution) Positive: REITs, staples, index futures Negative: gaming, diversified financials. |
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