NEWS
28 Jul 2015 - Cor Capital Fund
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| Fund Overview | The Cor Capital Fund is a Multi- Asset Fund which combines a pre-determined strategic asset allocation with active but systemised rebalancing to generate returns and manage volatility whilst maintaining transparency and liquidity. The Fund strategy is not reliant on accurate market predictions, forecasts or timing for success. Returns are generated in a number of ways; 1) by maintaining sufficiently large positions in a diverse group of asset classes, 2) via the 'volatility harvesting' consequences of active rebalancing, and 3) from the offsetting behaviour of certain asset classes under specific conditions. The combined portfolio is expected to exhibit relatively low volatility and low turnover. In the interests of avoiding complexity, maintaining liquidity, and minimising reliance on third parties, the Fund strategy does not employ gearing, derivatives or short-selling. |
| Manager Comments | The portfolio's equities position detracted from June returns as the ASX200 accumulation index retreated 5.3%. Gold (-2%) and bonds (-0.9%) were also negative during June although the Manager notes that the largest contribution to the Fund's 12 month return was gold (+9.5%). Click below to read the Fund's latest quarterly report. |
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28 Jul 2015 - Avenir 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 | At month-end, the Fund's geographical disposition was 50.60% in US, 13.4% in Asia, 8.1% in Western Europe, 3.9% in other and rest 24.0% as cash. The portfolio concentration in the top 10 holdings were 61% of NAV. Click below to view the June 2015 Fund Report. |
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27 Jul 2015 - Freehold Absolute Return Fund
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| Fund Overview | The Fund's research use detailed analysis of the underlying assets integrated with financial analysis to determine a sustainable yield and fundamental DCF valuation for the security. Also the Fund believes in having a strong risk control framework. The Fund will also use trading strategies via rebalancing of core portfolio positions as well as taking advantage of shorter duration inefficiencies in markets caused by an imbalance in demand and supply for global REIT and Infrastructure securities. The Fund focuses on generating absolute returns after fees of 12 to 15% pa over the medium to long term. The long-short nature of the Fund combined with Freehold's rigorous investment process ensures returns generated by the Fund are largely independent of rising or falling markets. Freehold is focused on providing investment opportunities primarily within core, value-add, opportunistic and development sectors of direct property and across listed and unlisted real estate and infrastructure securities. |
| Manager Comments | The portfolio's positive contributors in Jun were Westfield Group, Sydney Airport and Federation Centres. Negative Contributors were Industria REIT, Duet Group and APN Property Group. The Fund had moved to a net long position early in June on the back of a mild correction in the real estate and infrastructure markets combined and the sector had strong ex-dividend period. This positioning delivered quickly, within one week the sector experienced a very strong rally in the face of rising, macroeconomic risks from Greece and China. From this point the sector saw a serious correction due to rising macro risks, whilst the Fund was positioned to maintain its early strong gains. Click below to view the latest Fund & Market commentary. |
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27 Jul 2015 - Fund Review: Bennelong Kardinia Absolute Return Fund June 2015
- 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 April 2006 and also has significantly lower risk KPI's. The Fund has an annualised return of 12.70% p.a. with a volatility of 7.32%, compared to the ASX200 Accumulation's return of 4.93% p.a. with volatility of 14.19%.
- 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.
Fund Review: Bennelong Kardinia Absolute Return Fund June 201525 Jul 2015 - Hedge Clippings
GST finally on the table
It took New South Wales Premier Mike Baird to get the subject of raising and broadening the GST onto the front pages, and I expect we will never know if this was at the behest of Tony Abbott or Joe Hockey, or if he did it off his own bat. In any event at least it's done, and maybe there can now be a sensible debate about proper tax reform.
Regular readers of Hedge Clippings would know that we have been advocating for (or some would say banging on about) the need to expand the GST since Joe Hockey's first budget was released back in May 2014. In our view the rate could be increased to 15% and broadened across all goods and services, which would merely bring it into line with most other developed countries. In fact at 15% it would still be well under the rate charged in many parts of the world.
Of course the immediate response from some sections of the community, including a couple of State Labour Premiers, was that the GST was an unfair tax because it took a larger proportion of poorer people's incomes compared with higher earners. For some reason they completely ignored (presumably because they chose to) the logical suggestion put forward by Baird that there should be appropriate compensation for those on lower incomes, or on pensions.
They also ignored the fact that higher income earners are also higher spending consumers, and therefore would generate greater GST revenue. They also ignored the fact that now the system is installed, increasing the rate or broadening it is very simple from an administrative and collection perspective.
The risk now would seem to be that either the proposal doesn't make it through to reality, or worse still that a further compromise is done and it will take another 10 or 15 years before anyone has the political will to do it properly. One has to remember that the current system is a compromise in itself, with John Howard giving in to pressure from the Greens to apply GST to only half the economy in order to get it through Parliament.
Assuming the GST does get into the mix at the upcoming Taxation Review, which Abbott had previously indicated would not be the case, it might be helpful if the government allowed other taxation sacred cows, such as negative gearing and superannuation concessions, to be debated at the same time. There seems little point in having a taxation review, like the one organised by the previous government under the care of Ken Henry, if the entire system can't at least be explored.
Specific results received this week include the following PERFORMANCE UPDATES:
Pengana Absolute Return Asia Pacific Fund finished -2.39% for the month, compared to the Asia Pacific markets which fell -3.3%. Since inception the Fund has an annualised return of 10.90% p.a.
FUND REVIEWS released this week: Bennelong Long Short Equity Fund; Morphic Global Opportunities Fund
20 - 21 August 2015 -The 2nd Superannuation Fund Investment Operations Forum 2015 is a two day forum providing invaluable technological, regulatory compliant and best practice insights into improving back and middle office efficiency to drive member loyalty, bottom line profitability and a competitive edge
26 - 28 August 2015 -The 15th Annual Wraps, Platforms & Masterfunds Conferenc ewill provide solutions for succeeding in a distribution world of endless possibilities, showcasing strategies to help business achieve the biggest bite of market share, use innovation to overcome problems and support opportunities. Australian Fund Monitors is pleased to offer a discount of $300to all investors and advisors using coupon codepromoFMon registration.
15 September 2015 -The AIMA Australia Hedge Fund Forum 2015 is the annual non-profit hedge fund conference organised by the industry for the industry.
And finally, best wishes for a happy and healthy week-end ahead,
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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24 Jul 2015 - Pengana Absolute Return Asia Pacific Fund
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| Fund Overview | The Fund will usually hold 40 to 80 positions and will be well diversified across the various event strategies. In keeping with the absolute return focus the Manager will eliminate market risk where appropriate by hedging market and foreign currency risks. Since inception the Fund has averaged a net equity market exposure of ~10%. Sizing of an investment position will depend on the expected risk adjusted returns while taking account the liquidity and volatility of the stock. In addition, the maximum potential loss on any one position should be greater than 0.5% of the NAV and the position should not exceed 30% participation of stressed volume assuming a $200m NAV. Other criteria considered are ability to hedge and the availability of pair candidates as well as the average bid-ask size. For M&A strategies average long position is 3 to 5.5% and average short position 2 to 5%. |
| Manager Comments | Macro turbulence hit full swing with the de-risking in China overshadowing events in Greece. This extreme volatility made hedging the Fund's greater China exposure challenging, resulting in the negative performance of Chinese companies across most sub-strategies. The Fund ended the month with average net and gross exposure of 10.7% and 231% respectively. The Index Futures strategies contributed most towards the Fund's monthly performance. However, Capital Management and M&A strategies were the major detractors. The country exposure as percentage (%) of NAV was most in Japan with gross of 59.40%, followed by Hong Kong/China at 50.30%. Click below to read the complete Fund Manager's Report |
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23 Jul 2015 - Meme Australian Share Fund
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| Fund Overview | The Fund's investment strategy seeks to identify low-risk entry opportunities and then build positions in these stocks. Once established in the portfolio, individual stock holdings are maintained for as long as their long-term upward trend remains intact and while they continue to make positive contributions to portfolio growth. Positions are reduced and ultimately closed out as their trends become exhausted or as their relative long-term performance against the broad market weakens. The Fund believes that longer time frame investments also provide a number of advantages. The effect of false signals and 'noise' which attend shorter term time frames is mitigated by only attending to signals which are confirmed by our longer term assessments. Also, the Fund gains exposure to the more expansive price trends which can last for months and years, allowing dividends and distributions received during this time to further enhance portfolio returns. |
| Manager Comments | The Fund return for the Quarter was negative, at -4.36% although it comfortably outperformed the Fund's Benchmark All Ordinaries Accumulation Index, which returned -6.25% for the same period. Recent market volatility has resulted in an increase in the cash holding in the portfolio to about 30% and exposures to all market sectors have reduced apart from Materials, Energy and Information Technology which have enjoyed small absolute increases. Click below to read the latest Fund Manager's commentary on the Fund. |
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23 Jul 2015 - Fund Review: Bennelong Long Short Equity Fund June 2015
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 cap stocks from the ASX/S&P100 Index, with over twelve year track record and annualised returns of 17.35%.
- 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. The Fund's Sharpe Ratio and Sortino Ratio are 1.05 (Index 0.32) and 1.76 (Index 0.35) respectively.
22 Jul 2015 - Signature Quantitative Fund
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| Fund Overview | SQF has been established to profit from anomalies surrounding event driven, behavioural & factor based structural market inefficiencies which generate significant profits and are uncorrelated & persistent over time. Specific strategies such as dividend arbitrage, index addition and deletion, tax year end, capital raisings, among other strategies are used by the Fund. The Fund's initial focus is on investing in Australian and New Zealand markets. |
| Manager Comments | The Australian market suffered a large drawdown in June (-5.30%), and the net exposure of SQF also under-performed. The Tax Year End Effect did not work in May and June which was consistent with the poor performance of the momentum factor in Australia over the last 4 months. Capital Raisings outperformed and Alpha Capture under-performed slightly. Click the link below to view the latest Monthly Report. |
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21 Jul 2015 - Fund Review: Morphic Global Opportunities Fund June 2015
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.
