OPTIMAL AUSTRALIA ABSOLUTE TRUST

AFM have released the most recently updated Fund Review on the Optimal Australia Absolute Trust.

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

• Optimal Australia is a specialist Australian equity investment manager and the Fund has a long/short equity strategy typically with a low but variable net market exposure comprising 40 to 65 stocks broadly selected from within the ASX200. 

• The investment team comprising George Colman, Peter Whiting supported by Stephen Nicholls and Justin Hay have over 100 years combined experience in equity markets.

• In October, the Fund rose 0.35%, to take annualised return since inception to 8.56% p.a. The Fund's approach to risk is shown by the Sharpe ratio of 1.37 (Index 0.19), Sortino ratio of 2.88 (Index 0.16), both of which are well above the ASX 200 Accumulation Index and has recorded 80% positive months.

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

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - October 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 16.77%.

• 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 1.00 and 1.67 respectively.

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

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - October 2016 (pdf format)

Hindsight is so easy!

I can't imagine there is anything left to say about Donald Trump's stunning victory last Tuesday that hasn't been said or written elsewhere, but for better or for worse, here's a few more.

It is probably fair to say that the only people who were truly surprised were either those outside the USA, or Democrats within it. And possibly a few Republicans as well, although they might not choose to be reminded of it.

There will no doubt be books written, lectures given, and certainly debates held for a long time to come as to what, depending on one's opinion, went right or wrong. What is most surprising however is the "new" Donald Trump - gracious, polite and reasonable, all characteristics that would have been difficult to ascribe to him based on his electioneering over the past 18 months or so.

Only time will tell whether this is a temporary reprieve, or if Trump in election mode was just a carefully devised plan to gain attention from the so-called "forgotten and downtrodden" and in so doing polarise the electorate. Irrespective of the answer, he is now the President-Elect, and his Party has a seemingly iron grip on government at all levels for the next four years. (Malcolm, how would you like that?)

Over the past few weeks Hedge Clippings has received regular feedback to our Trump/Clinton election comments from a U.S. based subscriber who was adamant that those outside the US, plus those on the West and East coast, simply did not understand reality. Needless to say soon after the result was known we received an email from him titled: Was I Right?

Given that he was 100% spot on, it is worth taking notice of his opinion that "contrary to what the Australian media would like you to believe and have been toting, Donald Trump may make a good President". Assuming he will or can curb the excessive rhetoric, maybe he will.  Our 100% correct subscriber went on to add that it will be interesting to watch Trump and Putin as he feels there will be a big change in the relationship between Russia and the USA.

Certainly equity markets, which had previously been nervously awaiting the outcome, seem to think the outcome is positive, even if it just serves to remove the uncertainty of the unknown. Trump's massive infrastructure spending promise ($1,000 billion over 10 years) could well kick the economy along, and provide some much needed inflation to boot. If only it were all so simple.

Locally there's market uncertainty however, as Trump will govern for America first, and the rest of the World, and Australia second. The potential for trade, or currency wars, would seem to heightened.

PERFORMANCE NEWS 

Bennelong Long Short Equity Fund returned -1.76% in October. The Fund is up 33.63% for the latest 24-months.

Optimal Australia Absolute Trust rose 0.35% in October 2016, outperforming the ASX 200 Total Return Index, which returned -2.15%, by 2.50%.

Pengana Global Small Companies Fund returned -1.20% in October 2016, outperforming the MSCI AC World SMID Cap Index which returned -2.4%, by 1.2%.

Bennelong Kardinia Absolute Return Fund returned -1.85% in October to take the annualised return since inception to 11.29% p.a.

Finally, news has just arrived that one of our favourites from "and now for something completely different", Leonard Cohen has died aged 82. Hedge Clippings is old enough to remember seeing him at the Isle of Wight in 1969. Here's a link to a live version (and explanation) of his great hit Chelsea Hotel.

And on that sad note, have a great weekend.

Regards,

Chris
CEO, AUSTRALIAN FUND MONITORS

Connect with me on LinkedIn Twitter Facebook

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.

Inertia and indecision to decide the outcome.

The spectre of President Trump is looming larger than ever with investors certainly taking risk off the table - or at least holding fire until the outcome of Tuesday's vote is known, next Wednesday (AEST).

What seemed unthinkable until recently to those outside the Trump camp is now a distinct possibility, but this is going to be difficult to predict and according to the polls, will go down to the wire. There is no doubt that like the recent Brexit vote, it will be the voters who DON'T vote who will decide the outcome of who sits in the White House for the next four years.

As bizarre as this might seem in a country with compulsory voting such as Australia, there is no doubt that Americans, and probably the British, who think a system whereby an upper house candidate can do secret deals and thus, in spite of only achieving a minute vote in percentage terms, hold sway over the government of the day, is equally crazy. Or that the State with the smallest population has the same representation in the Senate as the largest.

And while on politics and Brexit, an interesting dilemma has emerged for British MP's, with the High Court ruling overnight that any decision to invoke Article 50 to leave the EU must be made in Parliament. Should each MP follow the outcome of a national referendum, where less than 40% of the eligible population voted to leave? Or should they abide by the wishes of the voters of their own constituency, who elected them in the first place, the majority of whom may have voted to stay? 

Meanwhile to markets: Trump as Commander-in-Chief would undoubtedly un-nerve markets if for no other reason than it will invoke change, uncertainty, and a fear of the unknown. A second President Clinton (back) in the Oval Office will unnerve investors based on higher taxes, and a Democrat who according to many, (including the Russians who have reportedly been behind her hacked email account) has a dubious past.

Hence risk off.

Meanwhile October fund performances have yet to emerge, but with the ASX falling 2.15% over the month for a 12 month return of 6.1% there is likely to be the usual range. 

FUND REVIEWS released this week: Insync Global Titans Fund

And on that note, have a great weekend.

Regards,

Chris
CEO, AUSTRALIAN FUND MONITORS

Connect with me on LinkedIn Twitter Facebook

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.