INSYNC GLOBAL TITANS FUND

Attached is our most recently updated Fund Review on the Insync Global Titans Fund.

We would like to highlight the following:

• The Fund's unit price rose 2.76% in December. The performance was driven by positive contributions from the holdings in eBay, BAT, Nestle and Microsoft Corp. The main negative contributors were Gilead Sciences, Oracle and S&P Global. 

• The Global Titans Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend growth and downside protection.

• Portfolio selection is driven by a core strategy of investing in companies with sustainable growth in dividends, high returns on capital, positive free cash flows and strong balance sheets.

• Emphasis on limiting downside risk is through extensive company research, the ability to hold cash and long protective index put options.

For further details on the Fund, please do not hesitate to contact us.

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - December 2016 (pdf format)

QATO Capital Market Neutral Long/Short Fund

Attached is our most recently updated Fund Review on the QATO Capital Market Neutral Long/Short Fund.

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

• Qato Capital is a Melbourne-based boutique fund manager backed by single family office, Larkfield Funds Management.
• Qato has a systematic, market-neutral strategy which invests exclusively in S&P/ASX 100 stocks.
• The QATO Capital's Q-score process captures and quantifies six broad fundamental factors, which assess multiple underlying sub-categories. Those companies with the top score (quality companies) are included in the "long" portfolio, those with the lowest score are sold short.
• The Fund seeks to preserve capital and maximises absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks through S&P/ASX-100 positions. In a typical environment, the Fund targets 25 long and 25 short positions.
• Qato Capital's process is systematic - stock selection and risk management are employed in a rules-based approach. The Fund employs no financial leverage/gearing to purchase securities, no derivatives, and no financial products to imitate leverage.

For further details on the Fund, please do not hesitate to contact us.

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - December 2016 (pdf format)

Let the games begin!

There was never going to be any risk that Donald Trump's presidency would be plain sailing, and to be fair he also said that he would not dilly-dally when implementing his policies. And so it seems, with the TPP out the door (at least from the US perspective, but it is hardly going to work without them) and the Mexican wall, irrespective of who will end up paying for it, on the agenda in his first week. He certainly has hit the ground running, irrespective of the direction.

Meanwhile the DJIA has hit the 20,000 level for the first time, albeit that it is not the best or broadest indicator of US stock prices. None the less, the markets, including the US dollar, are certainly positive about Trump's plans to reinvigorate the US economy, and particularly his insistence to put the US first. No one can say he didn't telegraph his punches during the campaign.

Quite how he will end up working with the media and Democrats on the East and West coast remains to be seen. Foreign leaders will have an interesting time, as evidenced by the cancellation of discussions between Trump and the Mexican President overnight. Is this what is meant by a Mexican stand-off?

British PM Theresa May also wasted no time in presenting her credentials and opinions to the new President at the annual Congressional Republican Retreat in Philadelphia overnight, albeit that she still has the challenge of having to guide Article 50 through the British Parliament thanks to a pesky high court. 

Politics in Australia seem positively insignificant by comparison, but maybe that is due to the short term focus on the date on which Australians should be celebrating Australia Day, and what it should be called. Political correctness prevents Hedge Clippings from publishing our real thoughts on this matter, except that without Captain Cook's discovery in 1770, and Captain Phillip sailing through Sydney heads in 1778, there would be nothing for  Australians to celebrate. For those who think the "Great Southern Land" was a blissful Utopia prior to the first fleet's arrival we suggest reading Captain Watkin Tench's first hand account (appropriately titled 1788) of the first four years of the colony.

NEW FUNDS!

We are continually adding new funds to the database, and this week are pleased to include two new early stage managers/funds, the Collins St  Value Fund and the Mhor Australian Small Cap Fund.

Melbourne based Collins St Asset Management is managed by founders Vasilios Piperoglou and Michael Goldberg, whose experience servicing high net worth clients and family offices covers wealth management, portfolio management and private equity. The concentrated portfolio consists of undervalued stocks, and the managers are prepared to hold cash until sufficiently attractive opportunities are available.

The Collins St Value Fund returned +0.89% in December, to take the latest 6 months return to 20.62%. Since inception in February 2016, the Fund has returned 25.14%.

Based in Sydney, Mhor Asset Management was founded by Portfolio Manager Gary Rollo, along with co-founder James Spenceley (who previously founded the ASX listed Vocus Communications). The fund's portfolio typically consists of 25 to 75 small cap stocks listed in Australia or NZ, and may also invest in stocks to be listed in the next 12 months. At the manager's discretion the Fund may hold up to 50% in cash.

In December the MHOR Australian Small Cap Fund rose 5.14%, outperforming the ASX Small Ordinaries Index which returned +3.61%, by 1.53%. Since inception in August 2016, the Fund has returned +5.10%.

Other PERFORMANCE NEWS 

Over the last 12 months, the S&P/ASX 200 Total Return Index returned +11.80%, the MSCI Asia Pacific Ex-Japan Index returned +9.49% and the S&P 500 Total Return Index returned +14.77%.

QATO Capital Market Neutral Long/Short Fund rose 0.70% in December, taking annualised return since inception to 4.93% p.a.

King Tide NZ/Australia Long/Short Equity Fund returned -0.64% in December, the Fund has an annualised return of 11.37% p.a. 

Pengana PanAgora Absolute Return Global Equities Fund returned -1.38% in December. Since inception in December 2015, the Fund has returned -3.24%.

Bennelong Twenty20 Australian Equities Fund gained  +2.62% in December, taking the most recent 12 months return to 7.42%. 

FUND REVIEWS released this week: Bennelong Long Short Equity Fund; Optimal Australia Absolute Trust; Pengana Absolute Return Asia Pacific Fund; 

And on that note, have a great weekend.

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.

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 large-caps from the ASX/S&P100 Index, with over fourteen-year track record and annualised returns of 16.14% p.a.

• The consistent returns across the investment history indicate 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 0.96 and 1.58 respectively.

For further details on the Fund, please do not hesitate to contact us.

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - December 2016 (pdf format)