NEWS
17 Feb 2016 - Fund Review: Morphic Global Opportunities Fund January 2016
MORPHIC GLOBAL OPPORTUNITIES FUND
Attached is our most recently updated Fund Review on the Morphic Global Opportunities Fund.
Key points include:
- The Fund is a global equity long/short manager with a long bias and a macro-economic overlay. The mandate allows the Fund to short sell, use derivatives and invest in assets such as commodities & currencies.
- Morphic's philosophy is that only funds with flexible investment and hedging strategies will be able to deliver acceptable, steady, real, absolute returns over the investment cycle.
- The Fund is an early stage, boutique, Sydney-based fund established in 2012 with experienced CIO's, and an investment team of 6 including a risk manager.
- The Board has a majority of independent members with significant risk and investment experience.
For further details on the Fund, please do not hesitate to contact us.
17 Feb 2016 - Pengana Absolute Return Asia Pacific Fund
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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 negative performance of the Fund can be mostly attributed to the M&A sub-strategy where deal spreads widened globally. The Fund exploited this dislocation by increasing gross exposure to 226.3% by month end but maintaining net at 9.2%. Positive contributors for the month were the Stubs and Capital Structuring strategies. Largest detractors by region were USA/Canada, Hong Kong/China and Australia. Japan and Indonesia contributed positively for the month. Click below to read the latest Fund Manager's Report. |
More Information |
16 Feb 2016 - Fund Review: APN Asian REIT Fund January 2016
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 $A2.1bn 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 a sustainable rental income streams.
- The Fund has delivered an annalised return of 16.15% p.a., since inception in July 2011 with standard deviation of 9.29% p.a. The Sharpe and Sortino ratios are 1.35 and 2.45 respectively.
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16 Feb 2016 - QATO Capital Market Neutral Long/Short Fund
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Fund Overview | The fund targets a net market exposure of 0% to hedge broader market risks through 30 S&P/ASX-100 positions (15 long and 15 short equally weighted positions). The turnover is generally averaged around 30% of the total portfolio each month. The process is entirely systematic - stock selection and risk management are all employed in a rules based approach. The Market Neutral Long/Short Fund employs no financial leverage, no derivatives and no financial products to imitate leverage. The Investment Manager's three principal investment goals for the Fund are: 1. Market neutral long/short portfolio management with little correlation to equity markets; 2. Over a 3-5 year period, seeking to target annualised volatility of 15% per annum and annualised returns of 15-30% per annum above the Benchmark; Sharpe Ratio 1.0-2.0 and a negative beta to ASX listed equities; and 3. To provide investors with a co-investment opportunity alongside the founding members' investments in the Investment Manager's strategy. |
Manager Comments | Nine of the long positions outperformed the S&P/ASX-100's fall in January. The Fund's long portfolio had six positions which delivered positive returns. These positions delivered a significant amount of alpha for the Fund. The long portfolio outperformed the market by +2.70% this month. Ten of the short positions outperformed the S&P/ASX-100's fall in January. Eight of these companies provided returns in excess of 10% for the month which added a significant amount of value to the Fund.The average net monthly exposure of the portfolio was 7.28%. |
More Information |
15 Feb 2016 - Fund Review: Meme Australian Share Fund January 2016
Meme Australian Share Fund
Attached is our most recently updated Fund Review on the Meme Australian Share Fund.
We would like to highlight the following aspects of the Fund;
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The Meme Capital Management is a Perth-based boutique Fund Manager, established in 2012 and manages the Meme Australian Share Fund.
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The Fund specializes in technical and quantitative strategies to identify investment opportunities expected to provide both positive price appreciation and relative price out-performance over the medium to long term.
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The Fund's objective is to outperform the S&P/ASX All Ordinaries Accumulation Index over rolling three year periods, through investing in ASX listed securities outside the S&P/ASX 20. The Fund only takes long positions and does not use derivatives.
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Over the past 12 months, the Fund returned positive 18.91%, versus the Index's -6.13% return.
15 Feb 2016 - Alexander Credit Opportunities Fund
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Fund Overview | The Fund may also invest in derivatives for hedging purposes. The portfolio of the Fund comprises primarily Investment Grade holding of 75% of the Fund's assets. Benchmark allocations are Australasia 50% to 100%, North America 0% to 50% and Europe 0% to 50%. Currency hedging may take place depending on benefits to the Fund. |
Manager Comments | For January majority of the Fund's portfolio composition was in Residential Mortgage Backed Securities (RMBS) at 54%, followed by Short-dated loans at 21%. In the volatile markets, the credit duration of the Fund has been reduced over the last 6 months to 1.4 years; its lowest level since inception. This defensive bias leaves the Fund in a prime position to take advantage of opportunities in the fixed income markets as they arise. Click on the link below to read the latest Fund Manager's Report. |
More Information |
13 Feb 2016 - Hedge Clippings
In the race of life, always back self-interest... at least you know it's trying
Paul Keating once used this quote, and reviewing the resistance from a range of self interested parties, (including a bunch of government back benchers) to an increase in the GST having any part in the GBT (Great Tax Debate), it seems self-interest, rather than the longer term interest of Australia's budgetary and fiscal future, is alive and well. At least we now know three things:
- Trying to sell a tax increase - sorry package, whether necessary, logical, sensible or otherwise, shortly before an election is not possible, and,
- If nothing else, Wee Willie Shorten can run a great scare campaign, even if he has to deal leniently with the truth to do so, and;
- The Prime minister has shown himself to be ultra-pragmatic in understanding that there's no point in flogging a dead horse in the face of said scare campaign if it's going to lead to defeat in the media, or worse still, at the polls.
In amongst all the rhetoric and rubbish spoken was someone on the ABC claiming, and being allowed to get away with it, that a pensioner spending his or her $30,000 a year will pay as much extra GST on that as Jamie Packer will on his $30,000 spend. Quietly ignoring of course that young Jamie will go through his $30,000 somewhat more quickly or more often than once a year.
Next was the cash economy, be it from the local cafe, tradesman, cleaner or whatever. While cash payments avoid income tax, it is presumed they are spent in the real economy and at least taxed. We could go on, but what's the point, the subject is dead and buried. Well done self-interest!
Now to performance and the markets which are being subject to increasing volatility, making it difficult for the average investor to do anything other than hang on, or stay on the sidelines. Even the experts are finding the going tough, although based on the selection of results below they're still proving more than capable of protecting their investors' capital to a large degree. We have about 50% of January results in to date, with the average of all funds -1.85% against the ASX200's -5.48%. Over the 12 months to 31 January the outperformance is +12%.
As with all bear markets and negative volatility the selling pressure tends to accelerate as support levels and confidence crumbles, and the weight of money that has flowed into index and mutual funds, (here and overseas over the past 3 years) and is now flowing out equally quickly is not helping the market.
On the subject of the economy AFM is pleased to be offer subscribers and readers of Hedge Clippings an opportunity to join Jamieson Coote Bonds' Charlie Jamieson, in conjunction with Deloitte to hear the combined thoughts of noted economist Saul Eslake, and the ex-head of the Future Fund, Mark Burgess, at a breakfast presentation in Sydney on 25th February. Seats are strictly limited, so please respond directly to this link.
Performance updates and reviews received this over the past couple of weeks included the following PERFORMANCE UPDATES:
For January, the Bennelong Long Short Equity Fund returned -0.29% compared to the ASX 200 Total Return Index which fell -5.5%.
The Jamieson Coote Bonds Active Fund rose 1.39% for the month of January 2016.
Meme Australian Share Fund returned -4.89% for the month of January, outperforming by +0.59% the ASX200 Accumulation Index's return of -5.48%.
The Paragon Fund returned -0.5% for the month of January, outperforming the ASX 200 Total Return Index which returned -5.48%, by 5.98%.
Morphic Global Opportunities Fund fell 1.98% in January, outperforming its benchmark (MSCI AC World Total Return in Australian Dollars), which fell 3.35%, by 1.36%.
The APN Asian REIT Fund rose 1.95% for January. Since inception, the Fund has an annualised return of 16.15% p.a.
Bennelong Kardinia Absolute Return Fund Fund fell 3.42% in January. Since inception, the Fund has an annualised return of 12.22% p.a.
Optimal Australia Absolute Trust recorded a flat return in January, against a 5.48% fall in the ASX 200 Total Return Index.
FUND REVIEWS released this week: Jamieson Coote Bonds Active Fund; Bennelong Long Short Equity Fund;
And on that note we trust you have a happy and safe week-end - and be good to each other this Sunday on Valentine's Day!
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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12 Feb 2016 - Bennelong Kardinia Absolute Return Fund
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Fund Overview | 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 | Ramsay Health Care, Blackmores and NAB were the largest detractors from performance whilst Amaysim, BWX and M2 made significant positive contributions. Net equity market exposure (including derivatives) was substantially reduced during the month to 32.3% (52.4% long and 20.1% short). Click below to read the latest Fund Report. |
More Information |
12 Feb 2016 - Optimal Australia Absolute Trust
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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 Fund entered January with a net short exposure. In the longs, the Resources, REITs and Communication Services sectors were key contributors for the month. In the shorts, the Index futures, energy and healthcare sectors were the key contributors for the month. The Fund did give back some ground from stock-specific investments in the retail, media, and utility sectors. The portfolio team believes market volatility is here to stay and therefore they plan to continue looking for stock opportunities, without embracing higher levels of market risk. Click below to read the latest Fund Monthly Report. |
More Information |
12 Feb 2016 - Fund Review: Jamieson Coote Bonds Active Fund January 2016
Jamieson Coote Bonds Active Fund
Attached is our most recently updated Fund Review on the Jamieson Coote Bonds Active Fund
We would like to highlight the following aspects of the Fund;
- Jamieson Coote Bonds is a Melbourne-based Boutique Manager launched in December 2014.
- The Founders, Charles Jamieson and Angus Coote bring over 30 years of international experience dealing with central banks, hedge funds and real money managers.
- The Jamieson Coote Active Bond Fund is a long-only macroeconomic investment fund, investing in Australian Dollar denominated bonds backed by AAA and AA+ rated Government, Semi (State) Government and Supranational agencies.
- The Fund Objective is to out-perform the Bloomberg Australian Government Bond Index through active management in a sound risk-framework and usually holds around 20 bond securities of varying maturities.
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