APN Asian REIT Fund

Attached is our most recently updated Fund Review on the APN Asian REIT Fund.

We would like to highlight the following aspects of the Fund;

• APN is an ASX-listed fund manager specialising in property investment, with an investment team of six. Established in 1996, APN now has FUM of $A2.4bn including four REIT (Real Estate Investment Trust) funds.
• The APN Asian REIT Fund (Fund) is a property securities fund that invests in a quality portfolio of Asian REITs, listed on the securities exchanges of the Asian Region, with the ability to hold some cash and fixed interest investments. 
• The Fund aims to deliver a competitive yield with lower risk than the market. The underlying stocks are selected based on a highly disciplined investment approach that focuses on the fundamentals and number of valuation approaches. The universe can include new IPO's, other corporate actions take place and / or corporate governance improvements at country or REIT level bring new stocks into focus.
• The Fund provides access to a wide spread of property-based revenue streams that are specifically analysed, selected and weighted with the aim of delivering strong and sustainable income returns. The Fund is an unhedged product.
• APN's Asian REIT Fund invests in a portfolio of 25-40 listed Asian REITs with a core philosophy of investing in properties with sustainable rental income streams.
• The Fund has delivered an annualised return of 14.26% p.a., since inception in July 2011 with a standard deviation of 9.50% p.a. The Sharpe and Sortino ratios are 1.18 and 2.08 respectively.

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - January 2017 (pdf format)

Bigger ain't necessarily better...

This week's Hedge Clippings comes to you from New Zealand or Aotearoa - the "land of the long white cloud" - a name which seems ironic as the country is in the grip of a drought, with bushfires in both the North and South Island, and not a drop of rain. Hence the magnificent countryside is more reminiscent of outback Australia than NZ's usual verdant green.

One cannot help but be impressed by New Zealand. Geographically it is stunning. Moving around is easy, (with the exception of peak hour in Auckland) courtesy of a population of less than 5 million people, who, either by nature or lack of pressure, or both, seem universally polite and friendly. The locals seem to have both the time and inclination to make sure visitors are enjoying their country, of which they are justifiably proud. Understandably we don't raise the subject of rugby.

New Zealand, and New Zealanders, punch above their weight in so many respects, and not only on the rugby field. I am not sure if this is their natural instinct, or a necessity in order to make their presence felt on the world stage amongst countries with populations, and resources, many times larger than their own. Whichever, they succeed in so many areas - and have adapted where necessary to do so, swapping sheep farming to dairy production, creating a world-class wine industry producing some wonderful (trust me) vintages of chardonnay and pinot noir.

To its credit NZ can lay claim to a number of firsts: The first country, way back in 1893, to give women the vote, and in 1898 the first country in the British Empire to introduce pensions. Sensibly (Malcolm, you'd love this) NZ has only one house of parliament, with the upper house abolished in 1950. In spite of this, or possibly because of it, New Zealanders can point to a history of one of the most stable governments in the world.

There's a similarity in many ways with the fund management industry, and hedge funds in particular. While size is important, bigger is not necessarily better. Smaller fund managers rely on performance more than FUM, and being smaller are more adaptable to change - either economic or market driven. And while some may grumble about their fees compared with large, index orientated, long-only funds, performance is worth paying for, provided of course that they provide appropriate levels of risk and reward. 

Back to the similarity with NZ, where a good bottle of pinot noir costs as much as a dozen of a lesser variety. Meanwhile our Kiwi friends have made an art form of charging top dollar for top end tourism spots such as Huka Lodge and Cape Kidnappers - the latter coincidentally or otherwise developed and owned by Julian Robertson, founder of the US Tiger hedge fund - and where tourists from the US and Europe are prepared to travel, and pay, for the privilege.

PERFORMANCE NEWS

January represented a mixed performance across the share markets. The local market declined slightly (S&P/ASX 200 Index -0.8%) with most sectors declined over the month. The Asian markets were also a mixed bag with the MSCI Asia ex-Japan Index up +6.2%, while Japan flat (Nikkei Index -0.4%). The S&P 500 Index and the MSCI ACWI were up +1.8% and +2.73% respectively.

Bennelong Long Short Equity Fund returned +4.95% in January, outperforming the S&P/ASX 200 Accumulation Index by 5.74%. The Fund has an annualised return since inception in January 2003 of 16.41% p.a.

Allard Investment Fund returned +0.83% for the month of January 2017. The Fund has returned +14.27% over the past 12 months, taking the annualised return since inception in July 2003 to 9.03% p.a.

Cyan C3G Fund increased 1.90% in January, outperforming the Small Industrials Index that fell 3.8%, by 5.70%. The Fund has returned +17.96% over the latest 12 months, taking the annualised return since inception to 27.09% p.a.

Bennelong Kardinia Absolute Return Fund returned +0.12% in January 2017, taking the latest 12 months return to +1.13%. Since inception in May 2006, the Fund has an annualised return of 11.14% p.a.

Optimal Australia Absolute Trust returned -1.0% in January.  taking the most recent 12 months return to +3.68%. Since inception in September 2008, the Fund has an annualised return of 8.32% p.a.

Paragon Australian Long Short Fund rose 2.30% in January, taking the most return 12 months return to +9.79%. The Fund has an annualised return since inception in February 2013 of 15.44% p.a.

APN Asian REIT Fund returned -0.39% in January, against the Bloomberg Asia REIT Index which returned -1.07%. The Fund has returned +5.96% over the past 12 months, taking the annualised return since inception to 14.26% p.a.

KIS Asia Long Short Fund rose 1.43% in January, taking the return for the most recent 12 months to 15.55%. Since inception in October 2006, the Fund has an annualised return of 14.67% p.a.

Totus Alpha Fund returned -2.0% in January, taking the annualised return since inception to 20.12% p.a.

Bennelong Australian Equities Fund beat the market posting a positive return of 0.79% for the month of January. The Fund has returned +8.10% over the past 12 months, taking the annualised return since inception to 13.19% p.a.

Affluence Investment Fund increased 0.33% in January resulting in a +11.84% return for the latest 12 months, taking the annualised return since inception to 9.78% p.a.

APN AREIT Fund returned -3.81% in January to take the latest 12 months return to 8.80%. Since inception, the Fund has an annualised return of 16.46% p.a.

Pengana Global Small Companies Fund generated 2.60% in December 2016, taking the latest 12 months return to +12.38%. Since inception in April 2015, the Fund has an annualised return of 5.75% p.a.

Insync Global Titans Fund returned +2.76% in December, however, fell -2.24%, taking the annualised return since inception to 8.75% p.a.

FUND REVIEWS released this week: QATO Capital Market Neutral Long/Short Fund; Insync Global Titans Fund; Bennelong Kardinia Absolute Return Fund; Bennelong Long Short Equity Fund;

And on that note, have a great weekend. Now where's that pinot.....?

Regards,

Chris
CEO, AUSTRALIAN FUND MONITORS

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Australian Fund Monitors are helping to raise awareness to support research into prevention and cure for cerebral palsy. For more information visit www.cpresearch.org.au or contact me by email.