Performance Report: Bennelong Kardinia Absolute Return Fund

12 Jul 2019 - Australian Fund Monitors

The Bennelong Kardinia Absolute Return Fund rose +2.82%, taking annualised performance since inception in May 2006 to +9.29% versus the ASX200 Accumulation Index's +6.34%.

12 Jul 2019 - Performance Report: Bennelong Kardinia Absolute Return Fund

By: Australian Fund Monitors

Report Date	12 July 2019
Manager	Kardinia Capital, a Bennelong boutique
Fund Name	Bennelong Kardinia Absolute Return Fund
Strategy	Equity Long/Short
Latest Return Date	June 2019
Latest Return	2.82%
Latest 6 Months	7.18%
Latest 12 Months	-4.63%
Latest 24 Months (pa)	0.76%
Annualised Since Inception	9.29%
Inception Date	01 May 2006
FUM (millions)	AU$115.33
Fund Overview	The Fund consists of a concentrated long/short portfolio typically comprising 20 to 50 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. On average since inception the Fund's exposure has averaged 40% net long. There is a slight bias to large cap stocks on the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. 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	The Bennelong Kardinia Absolute Return Fund rose +2.82%, taking annualised performance since inception in May 2006 to +9.29% versus the ASX200 Accumulation Index's +6.34%. The Fund's Sortino ratio of 1.38 versus the Index's 0.28, average negative return of -1.41% versus the Index's -3.26% and down-capture ratio of 40.11% highlight the Fund's focus on protecting investor capital in falling markets. The Fund's June return was driven by gold, financials, bond proxies and healthcare stocks. Top contributors included Polynovo, Northern Star, Evolution, Goodman Group, Atlas Arteria and Rhipe. Key detractors included Adairs, A2 Milk, Dubber and Netwealth. The largest detractor was a short position in Share Price Index Futures (-45bp contribution), partly offset by a modest positive contribution from the individual stock short book. Net equity market exposure was increased from 13.5% to 24.9% (67.3% long and 42.4% short), with the key changes being new long positions in National Australia Bank and Telstra as well as increased weightings in Commonwealth Bank, Atlas Arteria, Chorus, APA Group, Northern Star and Rio Tinto. This was partly offset by the sale of Tabcorp, Flight Centre, Netwealth and Adairs, four new individual stock shorts and an increase in the Fund's short position in Share Price Index Futures.
More Information	Fund Profile Manager's Report

Winning at the IPO Game

12 Jul 2019 - Dean Fergie | Cyan Investment Management

At Cyan, over this period, we have considered approximately 50 of these listings (we don't invest in resources or biotechnology which make up many of the new market entrants) and have put money into just 11. Despite both our cynical nature...

Who needs kids when we have Fluffy and Rex - The $125 billion growing Megatrend

9 Jul 2019 - Insync Fund Managers

Global pet care surpassed US$125 billion in 2018 (Euromonitor International). 73% of that was on pet food. What's more, when recession hits, pet food is the last item on the shopping list to be traded down to a lesser perceived quality or...

Performance Report: Bennelong Long Short Equity Fund

8 Jul 2019 - Australian Fund Monitors

The Bennelong Long Short Equity Fund rose +3.00% in June, taking annualised performance since inception in February 2002 to +14.81% versus the ASX200 Accumulation Index's +8.41%.

8 Jul 2019 - Performance Report: Bennelong Long Short Equity Fund

By: Australian Fund Monitors

Report Date	08 July 2019
Manager	Bennelong Long Short Equity Management, a Bennelong boutique
Fund Name	Bennelong Long Short Equity Fund
Strategy	Equity Market Neutral
Latest Return Date	June 2019
Latest Return	3.00%
Latest 6 Months	-4.19%
Latest 12 Months	-9.70%
Latest 24 Months (pa)	0.25%
Annualised Since Inception	14.81%
Inception Date	01 January 2003
FUM (millions)	AU$375.2
Fund Overview	Bennelong Long Short Equity Management applies a qualitative stock selection process to construct a diversified portfolio of paired securities based on relative value. The Bennelong Long Short Equity Management strategy invests primarily in the S&P/ASX 100 and is dollar neutral at cost. 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	The Bennelong Long Short Equity Fund rose +3.00% in June, taking annualised performance since inception in February 2002 to +14.81% versus the ASX200 Accumulation Index's +8.41%. The Fund has a down-capture ratio for performance since inception of -163.51%, Sortino ratio of 1.43 versus the Index's 0.48 and average negative return of -2.43% versus the Index's -3.07%. Bennelong say net improved fundamental news flows across the portfolio in May was a contributing factor to June's performance. At the sector level, Consumer Discretionary was the strongest, followed by Industrials, whilst Information Technology and Energy were the weakest. The number of positive pairs exceeded the number of negative pairs in June. Long Woolworths / short Metcash was the strongest pair after Metcash announced its full-year results which disappointed due to further weakness in its wholesale grocery business. Long Magellan / short Perpetual was also a solid contributor following consensus earnings upgrades to Magellan after strong fund performance. The weakest pair was long Link Administration / short Computershare following Link downgrading earnings. Long Challenger / short IOOF / short AMP was also a negative contributor following Challenger lowering its earnings outlook.
More Information	Fund Profile Manager's Report AFM Research Reports

Hedge Clippings | 05 July 2019

5 Jul 2019 - Australian Fund Monitors

This week the opposition huffed and puffed fighting against tax cuts before finally realising that the government's house, based on its recent election victory, was sturdy enough. So, what did they do? A 180 degree turn, and voted in the...

5 Jul 2019 - Hedge Clippings | 05 July 2019

By: Australian Fund Monitors

Hedge Clippings | Friday 05 July, 2019

If Hedge Clippings dredges back into his (or his children's) childhood far enough he can recall a tale of a big bad wolf threatening to "huff and puff and blow your house down". Of course, he failed when the house was sturdy and made of bricks.

This week the opposition huffed and puffed fighting against tax cuts before finally realising that the government's house, based on its recent election victory, was sturdy enough. So, what did they do? A 180 degree turn, and voted in the Senate to approve them. Pauline's One Nation abstained, and Cori Bernadi was absent, leaving only the Greens voting against.

The Greens voted "NO" but they vote NO to anything and everything. What's new?

Whether phase 3 of the tax package ever gets delivered in 2024 is a moot point, but if Albanese and Co are in power by then I'm sure if they wind them back they'll pay the price. That's nearly 2 more elections away, and fancy going to an election with a promise to increase income tax, even if it is for the higher (but not the highest) tax bracket?

The question is whether the immediate tax hand out, coupled with the RBA's rate cut, will be enough to make a difference to the economy. For those who say consumers will put the combined effects towards reducing debt rather than spending it, dream on. OK, some might, but most will do the obvious, even if not the most prudent thing, and spend it, whether at the local electrical outlet as Gerry Harvey hopes, or down at the TAB or the pub.

As far as the RBA's decision goes, it did seem a little panicky given the previous cut was only 28 days prior, the effects of which are yet to flow through, and the tax cuts were in the offing, even if not in the bag. Added to which reductions in mortgage rates only benefit those with a mortgage, while damaging those with bank savings. What we do concur with is the RBA's call that there's only so much that monetary policy can do.

Now it's up to ScoMo, business and consumers to follow through!

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Performance Report: Paragon Australian Long Short Fund

5 Jul 2019 - Australian Fund Monitors

The Paragon Australian Long Short Fund rose +0.9% after fees in June, taking annualised performance since inception in February 2013 to +9.45% versus the ASX200 Accumulation Index's +8.85%.

5 Jul 2019 - Performance Report: Paragon Australian Long Short Fund

By: Australian Fund Monitors

Report Date	05 July 2019
Manager	Paragon Funds Management
Fund Name	Paragon Australian Long Short Fund
Strategy	Equity Long/Short
Latest Return Date	June 2019
Latest Return	0.90%
Latest 6 Months	15.93%
Latest 12 Months	-12.88%
Latest 24 Months (pa)	4.75%
Annualised Since Inception	9.45%
Inception Date	28 February 2013
FUM (millions)	AU$37.4
Fund Overview	The Paragon Fund is a concentrated long/short Australian listed equities product that is fundamentally driven with a focus on the industrial and resource sectors. Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market.
Manager Comments	The Paragon Australian Long Short Fund rose +0.9% after fees in June, taking annualised performance since inception in February 2013 to +9.45% versus the ASX200 Accumulation Index's +8.85%. The Fund has risen +17.03% over the June quarter versus the Index's +7.97%. Positive contributors included Alacer Gold, Nearmap and Jumbo. These were offset by declines in Atrum and PowerApp. Paragon noted, as of 2 July, Sandfire had increased its interest in Adriatic to 11%. They expect Sandfire to pursue the rest of Adriatic at a premium in time. In June, Gold broke out above a long-term (6-yr) base of US$1,350/oz, with A$ gold continuing to break all-time highs. Paragon discuss their view on gold and A$ gold equities in their latest report. They consider gold a strong hedge to global market volatility and expect volatility to be an ongoing feature in global markets due to macro risk factors, slowing global growth and fears of a US recession.
More Information	Fund Profile Manager's Report

Does gold's breakout signal recovery ahead for gold miners?

4 Jul 2019 - David Baker, Baker Steel Gold Fund

The gold price rose to its highest in almost six years this week, in US dollar terms, breaking out of the trading range which has held since the end of the downturn in the gold sector several years ago. Gold producers' share prices remain...

Investment Review of the Gyrostat Absolute Return Income Fund

3 Jul 2019 - McGregor Asset Consulting

This investment report has been prepared by McGregor Asset Consulting Pty Ltd for the Filtered Research Committee of the Association of Independently Owned Financial Professionals.

Facebook's Libra

3 Jul 2019 - Marcel von Pfyffer, Arminius Capital

Libra is planned to be a global cryptocurrency suitable for international transfers. Its value will be stable because it is based on a Reserve of high quality assets. There are many unanswered questions about Libra's regulatory status,...

Digging Deep for Dividends

2 Jul 2019 - Dr Peter Gardner, Plato Investment Management

The 2018-2019 financial year has seen a dividend windfall for investors from Australian resource companies, an industry that isn't historically associated with high levels of income. The cause of this windfall has been strong commodity...

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12 Jul 2019 - Performance Report: Bennelong Kardinia Absolute Return Fund

12 Jul 2019 - Winning at the IPO Game

9 Jul 2019 - Who needs kids when we have Fluffy and Rex - The $125 billion growing Megatrend

8 Jul 2019 - Performance Report: Bennelong Long Short Equity Fund

5 Jul 2019 - Hedge Clippings | 05 July 2019

5 Jul 2019 - Performance Report: Paragon Australian Long Short Fund

4 Jul 2019 - Does gold's breakout signal recovery ahead for gold miners?

3 Jul 2019 - Investment Review of the Gyrostat Absolute Return Income Fund

3 Jul 2019 - Facebook's Libra

2 Jul 2019 - Digging Deep for Dividends

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