• 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 17.74% p.a., since inception in July 2011 with standard deviation of 9.15% p.a. The Sharpe and Sortino ratios are 1.51 and 2.89 respectively.

ATTACHED FILESAPN Asian REIT Fund AFM Fund Review September 2015 (pdf format)

MORPHIC GLOBAL OPPORTUNITIES FUND

ATTACHED FILESFund Review: Morphic Global Opportunities Fund September 2015 (pdf format)

FSI endorsed, Mortgage rates rise, and the GFC rolls on... and on.

Although it can't be pinned onto the new government, the fact that nearly all the recommendations of David Murray's Financial System Inquiry were endorsed this week makes a welcome change from the treatment previous administrations gave to similar inquiries. Take for instance the Henry Tax Review which amazingly excluded the GST in the terms of reference in the first place (Rudd), and then cherry picked those they wanted, or the 2009 Johnston enquiry which, where accepted, took six years to implement.

What is encouraging is that although it will be some time for all the FSI's outcomes to come to pass beforebeing fully implemented, some decisions, such as the increase in bank capital, have flowed through already. Banks had been raising additional capital in anticipation (including as a result of the Basle lll requirements out of Europe) and may need to raise more again in the future, but the immediate effect was an increase in mortgage rates.

It could be argued that having been protected at no cost to themselves during the GFC by the government, the banks should be wearing the costs of increased capital themselves. Be that as it may, it is indicative that the after-shocks, or effects of the GFC continue, as shown by the increase in mortgage rates this week independently of the RBA, which in turn is now being tipped to lower official rates to compensate.

We are not suggesting for one moment that the requirement for the banks to hold more capital is a bad thing as it adds stability to the system in the event of future issues, including a potential down-turn in the property market which already seems to be rearing its head. On that note one of Murray's few recommendations not to be approved was a ban on borrowing by SMSF's for property, and one has to wonder why this is so.

So now we look forward to the outcome from the current thoughts on tax reviews which Malcolm Turnbull has sent back to the bureaucrats for a re-work. While it may take a while, one has to believe that there's a greater conviction for change from this PM and his ministers than we have seen for some considerable time.

And about time too!

FUND REVIEWS released this week:Aurora Foritude Absolute Return Fund; Totus Alpha Fund;Bennelong Long Short Equity Fund; QATO Capital Market Neutral Long/Short Fund

And on that note, enjoy the week-end.

Regards,

Chris
CEO, AUSTRALIAN FUND MONITORS

Connect with me on LinkedIn Twitter Facebook

• 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 maximise absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks through 30 S&P/ASX-100 positions (15 long & 15 short equally-weighted positions).
• Qato Capital's process is entirely 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.

ATTACHED FILESQato Capital AFM Fund Review September 2015 (pdf format)