NEWS
Performance Report: Pengana Global Small Companies Fund
6 Apr 2018 - Australian Fund Monitors
The Pengana Global Small Companies Fund returned +0.23% for February, outperforming its benchmark which was down -0.40%. Since inception in April 2015, the Fund has returned +11.6% per annum with a volatility of 8.38%.
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6 Apr 2018 - Performance Report: Pengana Global Small Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed by Founder & CIO Leah Zell, and Portfolio Managers Jon Moog and David Li. The Lizard investment team have over 50 years combined investment experience in global small cap investing. Leah Zell has over 30 years of experience and is a recognized expert in international investing in the international small-cap category. The Fund's investment team uses a value-oriented investment approach to small and mid-cap global equities that seeks to identify and invest in quality businesses that create significant value but are mispriced, overlooked or out-of-favour. The investment manager believes that unique opportunities exist due to limited available research, corporate actions or unfavourable investor perception. The portfolio construction process aims to develop portfolios that incorporate the best investment ideas from the investment manager's research while allowing for liquidity constraints and perceived risk. The Fund's investment manager will not typically hedge currency exposures, however during periods of currency extremes, some currency hedging may be employed. Derivatives may be used to achieve long or short exposures, reduce risk and reduce transaction costs. Derivatives will not be used for the purposes of leverage and the Fund's net exposure will never be short. |
| Manager Comments | Pengana exited one position in February due to concerns regarding the depth of the management team and financial controls they employed. Pengana noted that, despite the company being a good business, they are not prepared to take the risk of weak management. Pengana have initiated a new position in the food industry. Pengana mention that they are currently not seeing widespread opportunities to allocate capital across current or new investments. In last month's report the Manager highlighted the option value of cash, in this month's report they note the value of this option is greater than ever. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
5 Apr 2018 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +1.89% in February, taking annualised performance since inception to +18.36%.
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5 Apr 2018 - Performance Report: Bennelong Concentrated Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The overriding objective of the Concentrated Australian Equities Fund is to seek investment opportunities which are under-appreciated and have the potential to deliver positive earnings, while satisfying our stringent quality criteria. Bennelong's investment process combines bottom-up fundamental analysis together with proprietary investment tools which are used to build and maintain high quality portfolios that are risk aware. The portfolio typically consists of 20-35 high-conviction stocks from the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to ASX-listed securities. Derivative instruments are mainly used to replicate underlying positions and hedge market and company specific risks. |
| Manager Comments | By the end of the month the Fund's weightings had been increased in the Health Care and Materials sectors and decreased in the Discretionary, Consumer Staples, Industrials and Financial sectors. The Fund's top 3 holdings as at the end of February were CSL, Flight Centre Travel and BHP Billiton. |
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Performance Report: Insync Global Titans Fund
4 Apr 2018 - Australian Fund Monitors
The Insync Global Titans Fund rose +1.19% in February, outperforming the MSCI ex Aus Index by +1.66%. Since inception in October 2009, the Fund has returned +10.07% per annum after the cost of fees and protection.
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4 Apr 2018 - Performance Report: Insync Global Titans Fund
By: Australian Fund Monitors
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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 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 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. Insync continue to utilise put options to buffer sharp falls in equity markets. |
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Performance Report: Pengana PanAgora Absolute Return Global Equities Fund
3 Apr 2018 - Australian Fund Monitors
The Pengana PanAgora Absolute Return Global Equities Fund returned -1.20% in February. Since inception in September 2010, the Fund has returned +8.35% per annum with an annualised volatility of 5.32%.
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3 Apr 2018 - Performance Report: Pengana PanAgora Absolute Return Global Equities Fund
By: Australian Fund Monitors
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| Fund Overview | PanAgora believes the best way to find opportunities in the global markets is to combine fundamental analysis with robust quantitative techniques in order to filter the investment universe and select the investments. The Fund invests primarily in listed equity securities from a global universe of developed markets and a select group of emerging market countries. The Fund's objective is to seek absolute returns by identifying and exploiting multiple inefficiencies that may exist in global equity markets. These inefficiencies are primarily exploited through the use of a long/short equity strategy which aims to construct a portfolio that is generally neutral to market movements. As such the performance of the investment strategy is largely independent of the market's performance. The Fund seeks to achieve its objective by using a diversified set of strategies that have low correlation to one another. In addition, because many of these strategies are designed to generate profit under different market conditions, their combination is expected to result in more stable returns over time than any individual strategy in and of itself. |
| Manager Comments | The long-term portfolio detracted -0.87% with most of the underperformance coming from the U.S. large capitalisation stocks. Intermediate-terms strategies detracted -0.45%, while short-term strategies contributed +0.11%. In the long-term portfolio, detractors included Spirit AeroSystems and Edgewell Personal Care, both of which remain long positions in the portfolio due to their good alpha scores. International positions in developed markets contributed +0.47% with good performance coming from Europe, in particular the UK and Sweden. Emerging Markets positions contributed +0.14%, with South Africa and Turkey contributing the most. The intermediate strategies detracted -0.36% due to U.S. merger arbitrage related trades where spreads widened in a volatile market. Pengana noted that this presents an opportunity to enter in to new trades at attractive levels. The short-term strategies contributed +0.09%, primarily due to good performance coming from Pengana's Analyst Day strategy. |
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Performance Report: Touchstone Index Unaware Fund
2 Apr 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund fell -1.57% in February. Since inception in April 2016, the Fund has returned +13.47% per annum.
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2 Apr 2018 - Performance Report: Touchstone Index Unaware Fund
By: Australian Fund Monitors
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| Fund Overview | The portfolio is constructed using Touchstone's Quality-At-a-Reasonable-Price ('QARP') investment process. QARP is a fundamental bottom-up process, however, it also incorporates a top-down risk management framework designed to successfully manage the portfolio during varying market conditions and economic cycles. The Touchstone Fund is concentrated, typically holding between 15-20 stocks. No individual stock will ever make up more than 10% of the portfolio at any one time. The Investment Manager may temporarily exceed the exposure limits of the Fund occasionally, particularly during periods of market volatility, to allow for holdings in excess of this 10% limit where the increase in value of the underlying security is due to market movement. The Fund may also hold between 0-50% of the portfolio in cash. The Fund has a high level of associated risk, therefore, the minimum suggested investment time-frame is 5 years. |
| Manager Comments | The Touchstone Index Unaware Fund primarily selects stocks from the S&P/ASX 300 Index and typically holds 10-30 stocks. It seeks to invest in reasonably priced, good quality companies with a significant share of expected returns coming from sustainable dividends. |
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Performance Report: Qato Capital Market Neutral Fund
30 Mar 2018 - Australian Fund Monitors
The Qato Capital Market Neutral Fund rose +1.27% in February, outperforming the ASX200 Accumulation Index by +0.91%.
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30 Mar 2018 - Performance Report: Qato Capital Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund seeks to preserve capital and maximise absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks by generally holding up to 50 S&P/ASX-100 positions (up to 25 long positions & 25 short positions). Historically, the strategy has been uncorrelated to traditional asset classes with a negative beta to equity markets. Qato Capital's process is entirely systematic - stock selection and risk management are all employed in a rules based approach. Positions in Qato's long-portfolio and short-portfolio are rotated monthly dependent upon their Q-Score ranking. The strategy employs no financial leverage/gearing to purchase securities, no derivatives and no financial products to imitate leverage. |
| Manager Comments | Reporting companies that impacted the Fund's performance included Bluescope Steel (long, +12.62% for February), Fairfax (long, +7.90% for February), Northern Star (long, +8.64% for February), Newcrest (long, -6.26% for February), South32 (long, -13.09% for February), Vocus (short, -18.06% for February) and Harvey Norman (short, -11.28% for February). |
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Performance Report: Quay Global Real Estate Fund
29 Mar 2018 - Australian Fund Monitors
The Quay Global Real Estate Fund returned -2.1% in February. Since inception in July 2014, the Fund has returned +11.62% per annum.
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29 Mar 2018 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | The largest detractors during the month were Ventas (US, Healthcare) and Scentre (Australia, Retail). Top contributors at the stock level were Hysan (HK Diversified) and Sun Communities (US, Manufactured Housing). The Manager noted the ongoing headwind created by rising long-dated treasury yields and a lack of interest in defensive and so-called 'interest rate sensitive' sectors, has been impacting returns. In their latest report, the Manager briefly discusses a recently published Economic Letter from the Federal Reserve of San Francisco titled 'Economic Forecasts with the Yield Curve', with specific reference to a chart the Manager says provides perspective on where in the cycle the US economy may be. The chart shows the term spread (the difference between long-term and short-term interest rates) and recessions, and highlights how the term spread is a strikingly accurate predictor of economic activity. In fact, the Manager notes, every recession in the past 60 years was preceded by a negative term spread of inverted yield curve. |
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Performance Report: Glenmore Australian Equities Fund
28 Mar 2018 - Australian Fund Monitors
The Glenmore Australian Equities Fund returned -0.30% in February, the Fund's first negative month since inception in June 2017. The Fund has returned +32.61% cumulatively since inception.
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28 Mar 2018 - Performance Report: Glenmore Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | 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 | Glenmore noted companies invested in by the Fund had a strong reporting season, with a number of companies delivering very positive results and outlooks and no major negative surprises. Top contributors included Appen (+18.4%), NRW Holdings (+14.2%) and Pioneer Credit (+10.9%). Negative contributors included Pacific Current (-8.9%) and Hotel Property Investments (-6.0%). The Fund exited HUB24 and Praemium early in the month due to their share prices reaching Glenmore's valuations. Glenmore noted that, while the earnings outlook remains positive for both, PE multiple expansion has been very aggressive for the last 6 months. |
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Performance Report: Bennelong Australian Equities Fund
27 Mar 2018 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +2.95% in February, outperforming the ASX200 Accumulation Index by +2.59% and taking annualised performance since inception to +14.07%.
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27 Mar 2018 - Performance Report: Bennelong Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Bennelong Australian Equities Fund seeks quality investment opportunities which are under-appreciated and have the potential to deliver positive earnings. The investment process combines bottom-up fundamental analysis with proprietary investment tools that are used to build and maintain high quality portfolios that are risk aware. The investment team manages an extensive company/industry contact program which helps identify and verify various investment opportunities. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to the ASX-listed securities. The Fund typically holds between 25-60 stocks with a maximum net targeted position of an individual stock of 6%. |
| Manager Comments | By the end of the month, the Fund's weightings had been increased in the Discretionary, Health Care, Consumer Staples, IT and Materials sectors and decreased in the Industrials and Financials sectors. |
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Performance Report: Pengana Absolute Return Asia Pacific Fund
26 Mar 2018 - Australian Fund Monitors
The Pengana Absolute Return Asia Pacific Fund fell -2.2% in February. Since inception in October 2008, the Fund has returned +8.17% per annum with an annualised volatility of 6.05%.
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26 Mar 2018 - Performance Report: Pengana Absolute Return Asia Pacific Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will usually hold 40 to 80 positions and will be well diversified across the various event strategies. In keeping with the absolute return focus the Manager will eliminate market risk where appropriate by hedging market and foreign currency risks. Since inception the Fund has averaged a net equity market exposure of ~10%. Sizing of an investment position will depend on the expected risk adjusted returns while taking account the liquidity and volatility of the stock. In addition, the maximum potential loss on any one position should be greater than 0.5% of the NAV and the position should not exceed 30% participation of stressed volume assuming a $200m NAV. Other criteria considered are ability to hedge and the availability of pair candidates as well as the average bid-ask size. For M&A strategies average long position is 3 to 5.5% and average short position 2 to 5%. |
| Manager Comments | Pengana noted the return of volatility to equity markets is creating opportunities to capture pricing inefficiencies in the Fund's Relative Value and M&A sub-strategies. Pengana have therefore increased the Fund's Relative Value gross exposure to 112% and M&A exposure to 101%, whilst reducing the Directional Alpha book net exposure to 13.3%. The Manager has also partially hedged the Alpha exposure with puts and put-spread strategies to hedge out potential tail risk. The Fund's net and gross exposures were 13.3% and 242.3% respectively at the end of the month. |
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