NEWS
Pengana Absolute Return Asia Pacific Fund
16 Dec 2016 - Australian Fund Monitors
The Pengana Absolute Return Asia Pacific Fund finished down -1.65% for the month of November 2016, compared to Asian markets which returned -2.4%.
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16 Dec 2016 - 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 | The Fund was largely insulated due to its hedges, from the significant volatility generated from the US Presidential election during the Asian trading hours. However, this volatility subsided few hours after the US election and unfortunately, the Fund did not take any profits in its long volatility position as the view was that volatility would remain elevated for at least several trading days. For the month, the M & A and capital management strategies were the biggest detractors. However, the market volatility created a trading environment conducive for the stubs strategy, which contributed +0.5%. During the month, the Fund increased gross exposure by circa 25%, although this was partially attributable to an increase in index hedges. Exposure to the M & A, capital structure and capital management strategies were increased. From a country perspective, trade allocations increased in Hong Kong/China, India and Korea. |
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Totus Alpha Fund
16 Dec 2016 - Australian Fund Monitors
Totus Alpha Fund fell -4.1% in November and +25.18% for the latest 24-months.
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16 Dec 2016 - Totus Alpha Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is a long/short investment fund principally investing in listed entities, commodities, futures and options in Australia and internationally. The Fund is not a market neutral fund and accordingly may switch between net long positions and net short positions. The Fund may use short sales and derivatives. Gearing may be used to enhance returns and the Fund may be geared in excess of 100% of the Fund's Net Asset Value. There is a limit to net exposure of 150%. |
| Manager Comments | Top contributors in November were long positions in Altium +0.53% and Wells Fargo + 0.46%. A short position in Boral contributed +0.40%. The Fund had gains on some of its US$ exposed positions (e.g. Wells Fargo) but this was not enough to offset the broad-based sell off in the mid-cap industrial, tech and healthcare exposures. Biggest detractors were long positions in McMillan Shakespeare -0.61%, Shriro -0.57% and Appen -0.52%. At month-end, the Fund had a net exposure of 56.8% and a gross exposure of 215.1%. The Fund held 104 positions (55 long and 49 short). |
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KIS Asia Long Short Fund
15 Dec 2016 - Australian Fund Monitors
KIS Asia Long Short Fund rose 0.68% in November, taking the return for the most recent 12 months to 17.24%. Over the last 12 months, the S&P/ASX 200 Net Total Return Index returned 9.69%, the MSCI Asia Pacific Ex-Japan Index returned 8.01%.
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15 Dec 2016 - KIS Asia Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Whilst the Fund's primary strategy is focused on long/short equities, the ability to retain discretionary powers to allocate across a number of other investment strategies is reserved. These strategies may include, but not be limited to: convertible bond investments, portfolio hedging, equity related arbitrage, special situations (e.g. merger arbitrage, rights offerings, participation in international public offerings and placements, etc.). The Fund's geographic focus is Asia excluding Japan, but including Australia). The Fund may invest outside of this region to the extent that: 1. The investment decision is driven from the Asian region or; 2. The exposure is intended to mitigate risk or enhance return from factors external to the Asian region. |
| Manager Comments | November's return was driven largely by a short position in Isentia Group Ltd (ISD.AX) 0.66%, a long and short position in Domino's Pizza Enterprises Ltd (DMP.AX) 0.34% and a long position in Altium Ltd (ALU.AX) 0.22%. Detractors for the month included long positions in Cardinal Resources Ltd (CDV.AX) -0.86%, XREF Ltd (XF1.AX) -0.25% and Speedcast International Ltd (SDA.AX) -0.20%. |
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Allard Investment Fund
15 Dec 2016 - Australian Fund Monitors
The Allard Investment Fund's (AIF) decreased 0.37% for the month of November 2016 (MSCI Asia Pacific ex-Japan A$ +0.74%).
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15 Dec 2016 - Allard Investment Fund
By: Australian Fund Monitors
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| Fund Overview | Allard's investment approach has remained consistent throughout their history: That is to invest prudently but proactively in well-managed businesses that achieve superior returns on capital in industries with long-term growth potential. The Manager uses both broad top-down guidance and detailed bottom-up analysis to identify suitable markets, industries and companies. Although long only investors, a critical factor in their strategy and performance is the ability to hold cash when they cannot find companies that meet their criteria or are at a sufficient discount to their valuations. |
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APN Asian REIT Fund
14 Dec 2016 - Australian Fund Monitors
APN Asian REIT Fund returned -3.67% in November, against the Bloomberg Asia REIT Index which returned -1.14%.
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14 Dec 2016 - APN Asian REIT Fund
By: Australian Fund Monitors
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| Fund Overview | Pete Morrissey and Corrine Ng are the Portfolio Managers of the Fund. Morrissey has over 15 years financial markets experience and joined APN in 2006. Previously, he worked at Lonsec and also managed an internationally focused private investment fund as well as spending several years as an analyst in the UK for Nomura, amongst others. He has also completed Masters level academic research papers on both commercial real estate cycles and global property cycles. Ng also has a strong background in property and REITs in Australia, Asia and the North American markets. Prior to joining APN, Ng worked for Aviva Investors (Senior Investment Analyst, North America Real Estate Securities Team) and Goldman Sachs & Co (Vice President, Goldman Sachs Asset Management Real Estate Securities Team) in New York. 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 is expected to be dynamic as 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 focuses on passive rental earnings derived from well managed Asian REITs listed in mature capital markets and will not invest in infrastructure, property development companies or stocks with a 'loose association with property'. 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. The Fund is suited to medium to long term investors seeking a relatively high income and some capital growth over the long term. |
| Manager Comments | For the month of November, the portfolio had significant exposure to Japan (40.9%) and Singapore (30.6%). The majority (62.8%) of the Fund was invested in Retail REITs (36.9%) and Office REITs (25.9%). The top five holdings were Gip J-REIT, Ascendas Real Estate Inv Trust, Keppel Dc REIT, Link REIT and Prosperity REIT, which made over 22% of the portfolio with 5 of the holdings above 4% each. |
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Cyan C3G Fund
13 Dec 2016 - Australian Fund Monitors
Cyan C3G Fund returned -2.5% in November, to take the latest 12-months to +21.17%.
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13 Dec 2016 - Cyan C3G Fund
By: Australian Fund Monitors
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | A number of the Fund's holdings contributed to the underperformance. The main declines came from Vita Group, Freelancer, Speedcast, Abundant Produce and Adacel. However, Afterpay, one of the Fund's larger holdings, indicated further growth to their already thriving payments business and contributed positively to the Fund (AFY +15%). Other positive contributors were BlueSky (BLA) which rose 5%, Nick Scali (NCL) +8% and SRG Group (SRG) +10%. Currently, the Fund is 50% in cash and hence is well placed to take advantage of attractive opportunities or when the uncertainty clears. Click below to read the latest Fund Manager's Report. |
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Fund Review: Bennelong Long Short Equity Fund November 2016
12 Dec 2016 - Australian Fund Monitors
November Fund Review is now available on Bennelong Long Short Equity Fund which has an annualised return of 16.49% p.a.
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12 Dec 2016 - Fund Review: Bennelong Long Short Equity Fund November 2016
By: Australian Fund Monitors
AFM Fund Review - November 2016 (pdf format)
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 16.49%.
- 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 0.99 and 1.63 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - November 2016 (pdf format)
Paragon Australian Long Short Fund
9 Dec 2016 - Australian Fund Monitors
The Paragon Australian Long Short Fund returned -7.9% in November and +23.11% for the latest 24-months.
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9 Dec 2016 - Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon believes that markets are not always efficient, exhibiting a common tendency to price securities well outside of their intrinsic value over the medium term. This market characteristic provides the opportunity for Paragon, an active manager with a flexible mandate, to generate superior investment returns over the longer term. Paragon believes that it is critical to understand both the companies and the industries in which they operate, in order to fully comprehend each investment opportunity. Accordingly, a fundamental approach to company research is taken. Assessing the potential downside is also paramount in framing the risk/reward trade-off for potential investments. |
| Manager Comments | The rise in bond yields, amplified by Trump's surprise election victory early in November, and with his substantial fiscal promises, has continued to drive the market rotation away from long duration, growth and gold stocks which the Fund has had reasonable exposure to since the fund's inception. The investment team has derisked the portfolio and also repositioned some of the stock holdings. The Fund continues to own key structural theme-led stocks that are expected to perform well over time. At month-end, the Fund had 27 long positions and 6 short positions and cash composed nearly 41% of the portfolio. Click below to read the latest monthly report. |
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Optimal Australia Absolute Trust
9 Dec 2016 - Australian Fund Monitors
The Optimal Australia Absolute Trust rose 0.95% in November 2016, to take the annualised return since inception to 8.59% p.a.
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9 Dec 2016 - 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 | The positive performance came from the Fund's holdings in financials (ANZ, Clydesdale, Suncorp, Hendersons), resources (Orocobre) and materials. During the month, the Fund initiated a new long position in APN, which has rationalised itself down to two attractive media exposures in radio and outdoor advertising and at a discounted valuation arising from technical pressure around its recent capital raising. Hedging the market risk through short selling was successful in the interest-rate sensitive stocks. The Fund had slightly positive net market exposure (+2.4% of NAV) at month-end and retains some scepticism about the sustainability of the 'Trump bump'. Click below to read the latest Fund monthly report. |
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Bennelong Long Short Equity Fund
8 Dec 2016 - Australian Fund Monitors
Bennelong Long Short Equity Fund returned -2.24% in November and up 26.68% for the latest 24-months.
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8 Dec 2016 - Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Fund Overview | 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. |
| Manager Comments | The Fund's under-performed was due to an even mix of winning and losing pairs with no particular position having a disproportionate impact on return. The top 3 spreads for the month came from the following pairs; Long Quantas/Short Flight Centre, Long Adelaide Brighton/Short Boral and Long IIuka/Short Downer. The month's market rotation out of the higher quality and defensive names toward lesser quality names on lower multiples or with cyclical potential hasn't caused the Fund to change its portfolio position. Instead, the investment team accepts that their preferences to be long in business with better growth prospects can sometimes lead the long book to trade at a price-premium to the short book. Hence, exposing the Fund to under-performance if either the premium becomes stretched or sentiment changes. However, the Fund has no plans to adjust its current positions unless justified by changes in the fundamentals. Click below to read the Fund Manager's commentary and market outlook. |
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