NEWS
21 Jul 2015 - Totus Alpha Fund
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| Fund Overview | The Fund is a long/short investment fund principally investing in listed entities, commodities, futures and options in Australia and internationally. The Fund is not a market neutral fund and accordingly may switch between net long positions and net short positions. The Fund may use short sales and derivatives. Gearing may be used to enhance returns and the Fund may be geared in excess of 100% of the Fund's Net Asset Value. There is a limit to net exposure of 150%. |
| Manager Comments | At the end of June, the fund had a net exposure of 13.90% and a gross exposure of 296.10%. The fund was diversified across a number investment themes and geographies with 113 positions (59 long and 54 short).Top contributors in June were the short position in Slater and Gordon +1.41% (Earnings Risk), long positions in Smartgroup +1.07% (Scarce Growth) and Adairs +0.65% (Scarce Growth). The biggest detractors were the long positions in Flight Centre -0.59% (Scarce Growth), Domino's -0.32% (Scarce Growth) and the short position in Sandfire -0.57% (Commodities). Click below to read the latest Fund's Monthly Report. |
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20 Jul 2015 - Bennelong Kardinia Absolute Return Fund
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| Fund Overview | The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. Detailed analysis of company valuations using financial statements and forecasts, particularly focusing on free cash flow, is conducted. Technical analysis is used to validate the Manager's fundamental research and valuations and to manage market timing. A significant portion of the Fund's overall performance can be attributed to the attention and importance given to the macro economic outlook and the ability and willingness to adjust the Fund's market risk. |
| Manager Comments | The Fund's net equity market exposure (including derivatives) of the Fund was decreased to 39.1% (74.2% long and 35.1% short). A short position in Share Price Index Futures contracts (hedging longs), as well as long positions in Surfstitch and National Australia Bank were the major positive contributors. Long positions in Slater & Gordon, Transurban and Amcor were the largest detractors. Click below to read the June 2015 Fund Report. |
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18 Jul 2015 - Hedge Clippings
Greek double somersault and pike, with a twist.
Markets recovered over the past week based on one of the more spectacular backflips in political history. One wonders what the Greek referendum was all about, given the man who having called it, recomended a NO vote, and then got his wish, seemed to ignore the result. Irrespective of whether one belives the Greeks should, or should not accept the medicine their northern neighbours, particularly the Germans were prescribing' hardly matters. No wonder that the 60% of the Greek population that voted no are less than happy, or even decidely grumpy.
What seems odd to fathom is how anyone thinks the so called solution will cure the underlying problems? Adding more new debt to cover that already in place, as any consumer with a bunch of maxed out credit cards in their wallet would, or should know, would seem to be simply kicking the can a further three years down the road. So look out for Grumpy Greeks for at least the next three years, and Grumpy Germans when it all returns to bite them in three years' time.
And so to China, which along with Greece seems to have been the major topic of Hedge Clippings for the past few weeks, as it has been for the mainstream financial press. Chinese quarterly GDP figures, once again delivered so swiftly that one has to assume they're fudged, came in at 7%, bang on target. What a wonderful co-incidence! Given Singapore's quarterly GDP declined sharply by 4% yoy, and a massive 14% annualised, in no small part as a result of reduced manufacturing and exports to China, it makes the Chinese GDP result even more questionable.
What makes the data so rubbery is that power comsumption in China grew by just 0.8% over the quarter yoy, well below expectations and one of the lowest rates of quarterly growth in the past 20 years. Crude steel and pig iron production fell 1.7% over the quarter, the first decline since records began in 1994, cement was down 20.5% yoy, and glass by 6.6%, while rail volumes declined by 9%. Even though the reported GDP growth was 7% for the quarter, this was still the lowest in six years, assuming you take them as gospel.
People in some quarters have been unkind enough to call me a cynic (amongst other things) but I can't imagine why.
Specific results received this week include the following PERFORMANCE UPDATES:
The Paragon Fund returned -3.80% versus the ASX 200 Total Return Index's -5.30%, for the month of June 2015. The Fund's annual return since inception has been 18.82% p.a. versus the Index's 7.46% p.a.
Morphic Global Opportunities Fund outperformed it's benchmark MSCI AC World Total Return in Australian Dollars by 0.31%.
FUND REVIEWS released this week: Monash Absolute Investment Fund; Optimal Australia Absolute Trust
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 Conference will 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.
It's a while since "Now For Something Completely Different" featured one of our four legged friends, so this might bring a smile to your face.
And finally, best wishes for a happy and healthy week-end ahead,
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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17 Jul 2015 - QATO Capital Market Neutral Long/Short Fund
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| Fund Overview | The fund targets a net market exposure of 0% to hedge broader market risks through 30 S&P/ASX-100 positions (15 long and 15 short equally weighted positions). The turnover is generally averaged around 30% of the total portfolio each month. The process is entirely systematic - stock selection and risk management are all employed in a rules based approach. The Market Neutral Long/Short Fund employs no financial leverage, no derivatives and no financial products to imitate leverage. The Investment Manager's three principal investment goals for the Fund are: 1. Market neutral long/short portfolio management with little correlation to equity markets; 2. Over a 3-5 year period, seeking to target annualised volatility of 15% per annum and annualised returns of 15-30% per annum above the Benchmark; Sharpe Ratio 1.0-2.0 and a negative beta to ASX listed equities; and 3. To provide investors with a co-investment opportunity alongside the founding members' investments in the Investment Manager's strategy. |
| Manager Comments | In June, the long book outperformed the market returning -3.88% for the month versus the Index's return of -5.30%. CBA was the third best S&P/ASX-100 position in June, being one of only four companies to finish positive for the month. The short book strongly outperformed in June. The Q-Score process selected the third and fifth worst S&P/ASX-100 positions for the month. Fortescue fell -19.39% for the month and Metcash fell -18.88%. Click below to read rest of the Fund Manager's latest commentary. |
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16 Jul 2015 - Morphic Global Opportunities Fund
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| Manager Comments | The biggest contribution to performance was from the US Banking and US Healthcare with Bank of Internet and HCA Holdings. The other large contributor came from Japan with Open House. The main detractors from the month's performance was mainly due to China. The Fund had over 50% of their equity exposure in North American and over 35.0% in the Financial Sector. The Fund closed June fully invested, though with some hedges. Click below to read the Fund Manager's monthly report and their June outlook of the market. |
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returned a net +2.9%, against a 6.5% fall in the market
16 Jul 2015 - Fund Review: Optimal Australia Absolute Trust June 2015
OPTIMAL AUSTRALIA ABSOLUTE TRUST
AFM have released the most recently updated Fund Review on the Optimal Australia Absolute Trust.
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 1.46 (Index 0.26), Sortino ratio of 3.16 (Index 0.18), both of which are well above the ASX 200 Accumulation Index and has recorded 80% positive months.
For further details on the Fund, please do not hesitate to contact us.
16 Jul 2015 - Fund In Focus - Morphic Global Opportunities Fund
Chad Slater, the Joint CIO of the Morphic Global Opportunities Fund discusses the markets and the July monthly outlook.
Watch AFM's other videos.
monthly result since May 2013.
15 Jul 2015 - Bennelong Long Short Equity Fund
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| Fund Overview | In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. |
| Manager Comments | Performance was broad-based with 20 pairs generating a profit versus 10 negative pairs. Short positions were key to performance during the month with each of the top three pairs driven by the short side. Two specific names thatworked well on the short side were Nine Entertainment Co (-27.9%) and Flight Centre (-26.7%) as both companies issued material profit warnings during the month. Click below to read the Fund Manager's complete commentary and future market outlook. |
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14 Jul 2015 - Fund Review: Monash Absolute Investment Fund June 2015
MONASH ABSOLUTE INVESTMENT FUND
- The Fund is a research driven, active equity long/short strategy investing in listed ASX companies.
- 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.
Monash Absolute Investment Fund Review June 2015 (pdf format)
14 Jul 2015 - The Paragon Fund
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| Fund Overview | Paragon believes that markets are not always efficient, exhibiting a common tendency to price securities well outside of their intrinsic value over the medium term. This market characteristic provides the opportunity for Paragon, an active manager with a flexible mandate, to generate superior investment returns over the longer term. Paragon believes that it is critical to understand both the companies and the industries in which they operate, in order to fully comprehend each investment opportunity. Accordingly, a fundamental approach to company research is taken. Assessing the potential downside is also paramount in framing the risk/reward trade-off for potential investments. |
| Manager Comments | Key positive contributors for June included Yowie, Adairs, Senetas, St. Barbara and short positions in Wesfarmers and Origin. These were offset by the Fund's net positive equity exposure, and holdings in Orocobre, IOOF, and Fortescue (FMG sold for a small overall gain). At the end of the month the Fund had 28 long positions and 15 short positions. Click below to read the latest Fund Manager's commentary. |
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