• The Aurora Fortitude Absolute Return Fund  (AFARF) has a 8 year track record investing in ASX listed equities. A Market Neutral overlay is used across a multi strategy approach which allows for flexible asset allocation to maximise returns and minimise risk under a variety of market conditions and cycles.CIO John Corr has over 20 years financial market experience with a strong focus on risk.

• Significant use of low risk "long" derivatives and option overlays has provided positive returns with low volatility during periods of market dislocation. Risk statistics are impressive and shows the Funds risk philosophy; over 88% of monthly performances have been positive with no losing months in 2008, the Fund's largest drawdown is -2.09% and the Sharpe ratio 1.16.

• ASX listed Aurora Funds Limited was established on the merger of three existing fund management businesses, managing approx. $230m on behalf of more than 2,500 retail and wholesale investors.

OPTIMAL AUSTRALIA ABSOLUTE TRUST

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

CPD Points are now available for all AFM Fund Reviews. Read the review and answer 5 questions to earn half a point toward your continuing professional development.

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.

• The Fund's approach to risk is shown by the Sharpe ratio of 1.36, Sortino ratio of 3.02, both of which are well above the ASX 200 Accumulation Index and has recorded 81% positive months.

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

Sean Webster
Research and Database Manager
Australian Fund Monitors

MORPHIC GLOBAL OPPORTUNITIES FUND

Understanding Hedge Funds

What is a Hedge Fund?

In the first video of the Understanding Hedge Funds series, we will explain what constitutes a hedge fund to improve investor knowledge and understanding.

There is no strict definition of a hedge fund. They are a type of managed or mutual fund but with a series of features that typically qualify them as a hedge fund. In this video we will list the features and the conditions under which funds might qualify.

Within the www.fundmonitors.com database, we sort through the mountain of information to focus on the facts and provide a daily analysis of each funds performance so investors can make informed decisions.
 

Chris Gosselin, interviewed by Chris Simond

Understanding Hedge Funds from Australian Fund Monitors on Vimeo.

The X factor and unconventional wisdom.

Conventional wisdom within the Australian financial services sector says that local fund managers are at a significant disadvantage when it comes to raising significant amounts of FUM, whether from local or overseas investors. By conventional, we would include David Murray and his FSI panel, most local fund managers, and the majority of offshore institutional investors.

The main benefit Australian managers have comes from managing local Australian assets on behalf of local Australian investors. When it comes to managing offshore assets, and equities in particular, for offshore investors that is considered more than an uphill battle for an Australian born, bred and domiciled fund manager.

What then is the difference or the X factor with Magellan Financial Group, who released their interim results this week? Ignoring their financial results, and focusing on the extent and source of their Funds under Management would indicate that either conventional wisdom is simply wrong, or there's more to it than that.

In the six months to December 2014 Magellan increased their FUM from $23.5 to $31.6 billion, with the offshore component increasing from $13.9 to $19.6 billion. No doubt the fall in the A$ has assisted in raising the overall FUM figure, but it doesn't factor in the fact that in spite of being a relatively young manager (having started out from a standing start in July 2007) 62% of that FUM comes from overseas institutional investors.

I'm sure there's not one single reason, with strategy, structure, market capacity, management, marketing and distribution all playing their part. However performance since inception has been good without being stellar. In fact between launching in July 2007 and July 2011 the Magellan Global Fund had gained a cumulative 1.01% inclusive of distributions net of fees. To be sure the fund's performance then accelerated though to December 2013 to be up a cumulative 96% courtesy of a 48% return that year, before going sideways for the following eight months and then lifting in the final quarter of 2014.

Whatever the X factor is, full marks to the Magellan team. They've proven that local Australian fund managers can compete on the global as well as the local stage in spite of being geographically challenged.

Specific results received this week include the following PERFORMANCE UPDATES:

Bennelong Alpha 200 Fund returned 2.18% during January 2015, bringing the fund's annual return to 4.13% since inception.

Chris
CEO, AUSTRALIAN FUND MONITORS

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