BENNELONG KARDINIA ABSOLUTE RETURN FUND

Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.

• The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies with an nine year track record. 

• The Fund has significantly outperformed the ASX200 Accumulation Index since its inception in May 2006 and also has significantly lower risk KPI's. The Fund has an annualised return of 11.91% p.a. with a volatility of 7.36%, compared to the ASX200 Accumulation's return of 3.74% p.a. with volatility of 14.27%.

• The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Mark Burgess and Kristiaan Rehder have significant market experience, while Bennelong Funds Management provide infrastructure, operational, compliance and distribution capabilities.

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

Australian Fund Monitors

ATTACHED FILESBennelong Kardinia Absolute Return Fund AFM Monthly Report February 2016 (pdf format)

Fed backs off next rate rise

With negative interest rates ruling in many parts of Europe it is probably no surprise to many Fed watchers that the next rise has been kicked further down the track. And as much as the Fed would like the economy to be performing sufficiently well to warrant a further 0.25% rise from historically low levels, the reality is that it is not much more than tepid economic recovery at best. So the "no" decision probably came as no great surprise.

Equity markets liked the news however, but no doubt rallied broadly on a relative yield basis. One has to wonder however, with more debt out in the market than there was pre GFC, what is going to happen come roll-over time if rates ever get back up towards even mid-single digits? No doubt the Fed is hoping there will be sufficient strength in the economy to sustain debt servicing levels, but the way it's looking the world seems well and truly locked in to a low inflation-low growth-low rates scenario for some time to come.

So in spite of the stability of that 3 way "low" scenario, volatility is likely to continue as central banks simply don't have any levers left to pull if they need to.

Meanwhile our attention was drawn to a headline in today's Financial Times titled "Hedge fund closures back to crisis highs" as some of the biggest names in the industry returned funds to their investors after suffering losses. The difference is that this time around the closures are voluntary, not forced on the managers by liquidity mis-matches and (panic) redemptions, and much of the returned capital will be re-allocated into other funds. Certainly some of the largest global funds, with many billions invested (often the manager's own capital) have had disappointing returns, but returning investor's capital because the manager sees that the time is not right for their strategy is a long cry from the chaos of 2008.

Performance updates and reviews received this over the past week included the following PERFORMANCE UPDATES:

Against a backdrop of further volatility in commodities and general de-risking in February the ASX200 Accumulation Index fell 1.76%  to take 12 month performance to -13.73% . The S&P500 fell 0.13% for the month and -6.19% over 12 months. With a sharp "beta" rally towards the end of the month some funds found the going tough. Meanwhile:

Clarity Multi Strategy Fund rose 6.04%, outperforming the AFM Global Equity Index which fell 1.45%, by 7.49%. Over the past 12 months the fund has returned 26.79%.

Bennelong Kardinia Absolute Return Fund fell 1.78% in February taking 12 month performance to 0.59%, outperforming the index by over 14%. Since inception in 2006 the Fund has an annualised return of 11.91% p.a. with Standard Deviation of 7.36% for a Sharpe ratio of 1.02.

Meme Australian Share Fund returned -1.71% for February bringing the Fund's 24-months performance to 36.16%. 

The Pengana Global Small Companies Fund returned -0.33% for the month of February, compared to a -0.44% return for the MSCI AC World SMID Cap Index.

The Paragon Fund returned -5.20% for February, brining the Fund's annual return since inception to 14.73% p.a. and a Sharpe ratio of 1.05

Signature Quantitative Fund fell -2.50% in February to take latest 24-month return to 12.47%.

The APN Asian REIT Fund rose 6.53% for February. Since inception the Fund has an annualised return of 17.42% p.a.

Totus Alpha Fund returned -11.27% for the month of February. The Fund has returned +31.26% over the past 12 months.

FUND REVIEWS released this week: Optimal Australia Absolute Trust; Bennelong Long Short Equity Fund; Morphic Global Opportunities Fund; 

And on that note, have a great week-end.

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.

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.

Australian Fund Monitors

ATTACHED FILESMorphic Global Opportunities Fund AFM Fund Review February 2016 (pdf format)