NEWS
6 Feb 2015 - Fund Review Supervised High Yield Fund December 2014
We would like to highlight the following aspects of the Fund:
- The Supervised High Yield Fund (SHYF) has a 5 year track record investing in fixed interest investments. The Investment strategy aims to deliver returns with zero correlation to equity markets by investing in debt securities with minimal default probability and offering a premium return above the risk free rate.
- The Fund is managed by Philip Carden whose experience in debt and capital markets spans 35 years, including time with JB Were's Capel Court Securities and Macquarie Bank, where he was the Executive Director responsible for the Debt Markets Division.
- SHYF is an Alternative Income fund which invests in Global and Australian debt markets, with all foreign currency receivables hedged back to Australian dollars.
- The Fund utilises a top down analysis of the economic environment and market to screen and identify debt market opportunities which it believes offer low risk with high yield. The next stage is the development of a risk matrix and investment strategy, following which detailed research is undertaken on specific investment opportunities which meet the pre-defined criteria established in the investment strategy.
- Prior to approving an investment for the Fund each potential investment is subject to two stress tests. The first of these is for credit and default risk, in which the investment is stress-tested to ensure that in a worst case economic environment it can repay 100% of its principal and interest obligations case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided The second test examines market risk. In this case Carden looks at the worst case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided.
Research and Database Manager
Australian Fund Monitors
6 Feb 2015 - 2015 Market Outlook: Looking Forward, Looking Back
2015 Market Outlook: "Looking forward, Looking back"
12 Feburary 2015: 12:00 - 2:00pm
2014 is now behind us, and the Australian equity market has essentially moved sideways since January. Interest rates have been on hold all year, and at record low levels of just 2.5%. The Aussie $ has finally cracked previous support, and if RBA Governor Glen Stevens has his way, has further to fall. Meanwhile the US market has continued to outperform, and YTD is up 7.6%.
By all accounts 2014 has been a difficult year for many investors, yet as at the end of November almost 60% of local fund managers had outperformed the market, while the best have returned over 20% since the start of the year.
So 2015 looms, with uncertainty probably being the major issue. Uncertainty about the markets, growth in the US and China, commodity prices, property and interest rates abound, while overshadowing all of those might be the performance of the government's handling of their first budget and the economy.
With that in mind, the subject of our first investor event in 2015 is aptly entitled "Looking forward, Looking Back". Join us to hear the opinion of four of our most respected fund managers reflect on 2014, and more importantly, provide their opinion on what the markets might hold in 2015, including:
- Simon Shields from Monash Investors,
- George Colman from Optimal Australia.
- Monik Kotecha, Insync Fund Managers; and
- John Corr from Aurora
Date: Thursday 12th February 2015
Time: 12:00 - 2:00pm (light lunch will be served)
Venue: Sydney CBD
Cost: Complimentary for Investors and Advisors
To assist with catering and other arrangement please RSVP here and we will forward your ticket with full details of the venue.
4 Feb 2015 - LHC Capital Australia High Conviction Fund Performance Report
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Fund Overview | LHC Capital will also seek to identify or encourage events that may act as a catalyst for valuations to converge towards their intrinsic value. The emergence of catalyst events will also have an impact on how LHC Capital allocates the Fund's capital between competing investment opportunities. |
Manager Comments | This return was achieved with lower volatility of 9.56% compare to the ASX 200 Accumulation Index of 11.89%. Since inception the Sharpe ratio of the fund is 1.86 (Index 0.44). The Fund returned 0.60% over January 2015 and 12.73% over the last 12 month and has recorded 80% of positive months (Index 64%). |
More Information | » View detailed profile of this fund |
3 Feb 2015 - Monash Absolute Investment Fund
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Fund Overview | The fund seeks to identify opportunities in the share market to make positive returns (long and short) irrespective of market conditions. It is style agnostic, as compelling investment opportunities exist across all investment styles from time to time. The Fund places a high priority on capital preservation, and has an absolute return focus in accepting market risk. The Manager's experience across value, growth and discounted cash flow styles allows them to use a comprehensive approach to investment decisions that applies all three. They also have the patience to seek out only compelling opportunities, rather than settling for relative value. The portfolio is somewhat concentrated, looking to diversify across industries and themes, rather than by trying to stay near an index. The portfolio may at times have a large amount of cash or other protection. However once investments are made turnover may be relatively high in order to lock in gains and avoid losses. |
Manager Comments | The Fund had a net exposure of 85% and gross exposure of 110% at month-end and a VaR of 1.0%. Since inception (May 2012) Sharpe and Sortino ratios are 1.52 and 3.39 respectively. As we move into the February reporting season we have increased the weights in a number of our 'outlook' stocks. The number of 'event' trades in the portfolio has also picked up. Equity Beta has fallen to half that of the market. |
More Information | » View detailed profile of this fund |
2 Feb 2015 - KIS Asia Long Short Fund
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Fund Overview | Whilst the Fund's primary strategy is focused on long/short equities, the ability to retain discretionary powers to allocate across a number of other investment strategies is reserved. These strategies may include, but not be limited to: convertible bond investments, portfolio hedging, equity related arbitrage, special situations (e.g. merger arbitrage, rights offerings, participation in international public offerings and placements, etc.). The Fund's geographic focus is Asia excluding Japan, but including Australia). The Fund may invest outside of this region to the extent that: 1. The investment decision is driven from the Asian region or; 2. The exposure is intended to mitigate risk or enhance return from factors external to the Asian region. |
Manager Comments | The Fund has returned 15.16% since inception in October 2009 with a volatility of 5.46%, Sharpe ratio of 2.00 and Sortino ratio of 4.53%. The surprise announcement by the Swiss National Bank regarding the removal of the peg of the Swiss Franc to the Euro has led to less reported significant losses than we would expect. There have obviously been winners and losers but we were surprised not to see an announcement from a corporate of any significant losses as a result of the move. This move emphasizes how dependent the markets have become on well flagged and considered moves by central bankers. We remain unconvinced that the financial measures that have been introduced, such as quantitative easing, actually stimulate the economy. These measures often artificially support financial asset prices, maybe that is their main aim; economies do not tend to thrive as financial asset prices crash! |
More Information | » View detailed profile of this fund |
30 Jan 2015 - Hedge Clippings
Last week "Hedge Clippings" noted that while negative, or historically low interest rates around the world caused by QE in the US and European and Japanese Central Bank Intervention (CBI) is working up to a point, it is still a great experiment that we had to have to avoid a complete meltdown during and post the GFC. As such, the end outcome has yet to be determined.
China's economy is still a question mark, although is likely to be a major beneficiary of the lower energy prices - if and while they last. The crackdown on the margin lending which has helped to push the Shanghai market so strongly over the past six months will however be interesting.
Europe won't respond to CBI the way the US did to QE simply because there are 28 different economies and nationalities at work. It is not universal. The world is facing deflation and 0% or negative interest rates, and as we indicated in last week's Hedge Clippings there's likely to be tears before bedtime.
The question is when? Investors will continue to chase whatever yield they can find, and bank deposits aren't where they will find attractive returns for a while. Hence equity markets, and particularly the six great dividend payers in Australia (the big four banks, Wesfarmers and Telstra) although expensive on most counts, will remain well supported, as evidenced by the Commonwealth Bank hitting $90 today.
So there's a significant anomaly: In spite of the risk of concentration in just a handful of stocks, and in spite of the risk of buying assets which on any normal valuation are significantly overpriced, investors are still happily allocating to equities and if the RBA cuts rates again next Tuesday as many expect, are likely to continue to do so. Meanwhile more and more commentators and fund managers are warning of the risks.
They are doing so on the assumption there won't be any shocks to the system, be it an economic or political black swan event, which of course can't be ruled out. For example, oil prices halving in 6 months out of the blue is likely to cause some serious pain in some sectors of the US (shale oil) market and in Russia, even if we can now afford to fill the car's petrol tank.
So what to do? A sensible investor (if they believe the nervous nellies) might buy some insurance in the form of long dated out of the money index put options. Or just continue to dance until the music stops, and hope for the best.
But hope is generally not considered to be the best strategy.
Specific results received this week include the following PERFORMANCE UPDATES:
Paragon Fund returned -0.50% (ASX 200 Accum 2.06%) during December with annual returns at 16.09% (Index 5.61%) with a volatility 15.16% (Index 10.95%).
The Pengana Absolute Return Asia Pacific Fund returned 0.74% in December and 6.20% for the year with a volatility of 2.79% and a Sharpe ratio of 1.29.
Auscap Long Short Australian Equities Fund recorded a return of 0.44% in December with the annual return 23.17% and a volatility of 7.46%.
The Avenir Capital Value Fund returned -4.42% during December 2014 with annual performance of 15.38% and volatility of 11.11% since inception.
FUND REVIEWS released this week, all with the potential for earning CPD points:
Optimal Australia Absolute Trust; Alpha Beta Asian Fund; Aurora Fortitude Absolute Return Fund; Bennelong Long Short Equity Fund; Totus Alpha Fund; Insync Global Titans Fund;
We have limited places available for our Deloitte "Looking Forward, Looking Back" lunchtime seminar on Thursday 12 February in Sydney. We'll have four of the best and brightest fund managers on hand, including Simon Shields, George Colman, John Corr and Monik Kotetcha to give you the benefit of their opinion. If you would like to attend, please register your interest here.
18 February 2015 in Sydney - Efficiency in a Regulated World
25-27 March 2015 - Digital Marketing for Banking and Financial Services Summit
Finally, and now for something completely different - something that money can't buy (beautiful clip if you ignore the last 10 seconds).
Kind regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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30 Jan 2015 - Avenir Capital Value Fund
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Fund Overview | The Fund will invest in securities where Avenir believes the company is simply mis-priced and deeply undervalued and offers significant potential for revaluation. The Fund will also invest in companies that are subject to specific corporate events such as mergers, acquisitions, restructurings, recapitalisations, spin-offs, demergers, management change, distressed situations, and other sharply delineated corporate events. The Fund will also selectively invest in short positions in companies where Avenir believes the company is significantly overvalued or where the company's business model is broken or structurally challenged. |
Manager Comments | The Fund's Sharpe and Sortino ratio are 1.07 (Index 0.69) and 1.77 (Index 0.96) respectively. At month-end the Fund's geographic exposure was US 42%, W. Europe 13% Asia 14% Australia 1%, Other 10% with cash at 22%. |
More Information | » View detailed profile of this fund |
30 Jan 2015 - Fund Review: Aurora Fortitude Absolute Return Fund December 2014
- The Aurora Fortitude Absolute Return Fund (AFARF) has a 10 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 86% of monthly performances have been positive with no losing months in 2008, annualised standard deviation of 2.71%, the Fund's largest drawdown is -2.09% and the Sharpe ratio 1.05.
- ASX listed Aurora Funds Limited was established on the merger of three existing fund management businesses, managing approximately $230m on behalf of more than 2,500 retail and wholesale investors.
Sean Webster
Research and Database Manager
Australian Fund Monitors
30 Jan 2015 - Fund Review: Bennelong Long Short Fund AFM Fund Review December 2014
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
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.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large cap stocks from the ASX/S&P100 Index, and has produced an annualised return of 17.25% against the broader ASX200 Accumulation return of 8.11%.
- The consistent returns across the investment history indicates the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market.
- Fund performance was muted for the month as the market drifted without any strong thematic and investors were subject to merger and acquisition activity/speculation, yield/defensive buying and stock specific issues. Our assessment is that the April factors that negatively impacted fund returns, which were of a more global nature, were persisting early in the period but since have abated. Fund activity was limited in May as our view of market fundamentals have not really changed.
Sean Webster
Research and Database Manager
Australian Fund Monitors
29 Jan 2015 - Fund Review: Alpha Beta Asian Fund AFM Fund Review December 2014
ALPHA BETA ASIAN FUND
AFM has updated the Fund Review on the Alpha Beta Asian Fund.
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.
Key points include:
- The Fund The Alpha Beta Asian Fund invests in Asian listed equity markets with a focus on liquid companies in Australia, Japan, Hong Kong, Indonesia, Philippines and Thailand. The Fund uses a systematic approach to evaluate macroeconomic, company fundamental and price data, all of which are evaluated through a series of quantitative models.
- Sydney based Alpha Beta Capital was established by Andrew Barry and Ken Lewis in May 2012. Both Barry and Lewis have significant qualifications and international experience in funds management, including working together at Coronation International, a global multi-strategy hedge fund group in London.
- The Strategy relies on a number of core beliefs: Firstly that a well designed systematic investment process, operating within a multi-strategy framework will be able to extract consistent returns, on average, with low volatility. Secondly, by utilising holding periods substantially shorter than the industry-norm, profit opportunities consistently arise. Finally, a strategy that holds a large number of small positions versus a small number of concentrated positions, will remove much of the emotional angst of trading, and the investment process becomes repeatable.
- In keeping with the Manager's overall systematic approach the Risk Management includes real time monitoring of positions and market exposure, and is combined into a proprietary and automated system called PARMS (Portfolio and Risk Management System). PARMS is a centralised and integrated system which provides full functionality including stress testing.
Sean Webster
Research and Database Manager
Australian Fund Monitors