NEWS
3 Aug 2015 - Fund Review: Aurora Fortitude Absolute Return Fund June 2015
- 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 85% of monthly performances have been positive with no losing months in 2008, the Fund's largest drawdown is -2.09% and the Sharpe ratio 1.06.
- 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.
1 Aug 2015 - Hedge Clippings
Twelve month industry and sector performance review
The past 12 months have not been easy for Australian investors, particularly those who had become used to double digit returns from high yielding equities, and bank stocks in particular, over the past couple of years. Just to add insult to injury, the ASX200 dropped over 5% in June as the crisis in Greece reached a crescendo.
As a result the ASX200 Accumulation Index managed to return only 5.67% for the financial year to 30 June, with 5 out of the 12 months in negative territory. Considering September 2014 recorded a negative -5.37% to add to June's -5.30% this was probably not a bad end result, although probably saved by the buoyant start to the calendar year which saw the market rise 3.27% in January, and a further 6.88% in February.
In the 12 months to June 2014 the market returned 17.43%, and for the period to June 2013 an even better 22.67%, so investors had been provided with a period of 24 months averaging 20% plus per annum. As most investors would appreciate most of the performance was coming from a handful of heavyweight financial stocks and Telstra, so the yield hungry, concentrated portfolios were doing even better.
By comparison, actively managed equity and hedge funds performed admirably in the most recent 12 months, returning 11.34% on average, with 75% outperforming the 5.68% return of the ASX200. Including non-equity funds took a little, but not a lot of, gloss off the result, with all single funds returning 10.53% for the same period.
Of interest was the fact that when looking at individual strategies, Long Only (+16.87%) outperformed Equity Long/Short (+11.76%), while Market Neutral struggled at 4.48%. Taking a geographical breakdown showed Asia leading the regions, with Asia up 12.95% and Asia ex Japan up 18%, while Global funds produced 10.72%, and Australian focused funds came in at 7.92%, with currency gains presumably providing significant tail winds for those not hedging their A$ exposure.
So while a creditable 75% of funds outperformed the local equity market, once again fund selection, and having a reasonably diversified portfolio balancing both performance and risk seemed the best solution for the smart investor.
Full details can be found on the www.fundmonitors.com industry and sector performance page.
Specific results received this week include the following PERFORMANCE UPDATES:
Insync Global Titans Fund outperformed its benchmark MSCI All Country World ex-Australia Net Total Return Index ($A) by 0.50%.
FUND REVIEWS released this week: Bennelong Kardinia Absolute Return Fund; Pengana Absolute Return Asia Pacific Fund; Totus Alpha 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 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 $300 to all investors and advisors using coupon code promoFM on 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 now for something completely different: Today is the last day of July, ushering in the month of August, so named in 8BC by Julius Caesar in honour of Augustus around the time of several of his great triumphs, including the conquest of Egypt.
So what you might ask? Well, there has been an email doing the rounds entiltled Silver Pockets Full which claims that this August will be unique in that it has 5 Fridays, 5 Saturdays and 5 Sundays, and that this phenomenon only occurs every 823 years.
For those of you who have received the email and belived it, take another look because you've been conned. Apart from the fact that today is Friday, July 31st, every month with 31 days has three days of the week which occur 5 times, and four that occur 4 times.
It took Hedge Clippings a while to work it out, by which time we had forwarded it to a few people, none of whom seemed to spot the issue either. But it does beg the question, who thinks of these things?
And while on the subject of something completely different.... politicians behaving badly: If we thought a $5,000 helicopter ride for our Speaker of the House was above and beyond, how about the (now former) Deputy Speaker of the House of Lords, Lord Sewel who was reported as saying "The question of whether my behaviour breached the code of conduct is important, but essentially technical".
This after being filmed snorting cocaine, dressed in a red bra, while cavorting with a couple of prostitutes.
On that note (a five pound one I understand) have a good week-end.
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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31 Jul 2015 - Insync Global Titans Fund
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Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio of typically 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
Manager Comments | The Fund's performance was driven by positive contributions from holdings in Comcast, Disney and Baxter. The main negative contributors were Oracle, Nestle and Microsoft. The Fund continues to have no foreign currency hedging in place as Insync considers the main risks to the Australian dollar to be on the downside. Click below to read the latest Fund Manager Report. |
More Information |
30 Jul 2015 - Fund Review: Totus Alpha Fund June 2015
- Totus Capital is a Sydney based long short fund manager established in 2012 by Ben McGarry which aims to place equal emphasis on performance and capital preservation. The Fund invests mainly in Australia, but also in other developed economies, with a primary exposure to equity markets.
- The Totus Alpha Fund's investment strategy is to identify structural themes, and then seek to drive performance by investing in securities that have concentrated exposure to those themes. Single stock short positions are used to generate alpha, frequently in under researched parts of the market such as the small and mid-cap space. Index derivatives are used to hedge the portfolio's market risk.
- McGarry qualified as a Chartered Accountant with PWC in 1999 and has 14 years market experience, commencing his career covering European building materials and construction sectors at Morgan Stanley in London. Previous experience included analytical roles at Ausbil, a Sydney based $10bn+ long-only manager, and sell side emerging companies experience at UBS. McGarry's emerging company research with UBS included exposure to a range of sectors including energy, materials, industrials, tech, financials, retail and telecommunications.
- The Fund has delivered an annalised return of 24.97% since inception in March 2012 as compared to 12.14% for the ASX 200 Accumulation Index. The standard deviation has been higher than the Index at 13.44% as compared to 11.48% and the Sharpe ratio is 1.53.

29 Jul 2015 - Aurora Fortitude Absolute Return Fund
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Fund Overview | The Fund aims to produce positive returns irrespective of the direction of the share market. For each investment the manager considers the risk, the timeline of that risk occurring and then the potential return. Low transaction costs and liquidity are other important factors in the success and implementation of the strategies. |
Manager Comments | It was the Option (+0.68%) and Convergence Trading (+0.14%) strategies that provided positive contribution to the portfolio. Positions in the banking sector were the dominant contributors. However the reverse of this banking prices actively impacted the Yield strategy (-0.53%) and become the largest detractor for the month. The Mergers and Acquisitions and Long/Short Trading strategies were flat for the month. Click below to read the latest monthly commentary and market outlook. |
More Information |
29 Jul 2015 - Fund Review Pengana Absolute Return Asia Pacific Fund June 2015
PENGANA ABSOLUTE RETURN ASIA PACIFIC FUND
Attached is our most recently updated Fund Review on the Pengana Absolute Return Asia Pacific Fund.
- The Pengana Absolute Return Asia Pacific Fund ("PARAP") was established in 2008 by portfolio managers Antonio Meroni and Vikas Kumra. The Fund is a feeder fund into a Cayman Islands AUD share class fund.
- The Fund invests both long and short in Asia Pacific equities, including in Australian and New Zealand, after a stock specific "event" has either occurred or been announced and the portfolio aims to be uncorrelated to the underlying equity markets. A combination of the Manager's experience, thorough research and continuous back- testing identify the most attractive of these events.
- Risk controls include limits on individual positions as well as gross and net exposure. Limits are in place for option exposure and cash borrowing, with stop loss limits on individual positions. Overall the manager is looking to derive returns from the event strategies as opposed to any currency or market exposures.
- Since inception, the Fund has an annualised return of 10.90% p.a., compared to the AFM's Asia Pacific Index of 6.67%. The Fund has achieved this with lower volatility of 5.85% (Index 11.75%).
For further details on the Fund, please do not hesitate to contact us.

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. |
More Information |
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. |
More Information |
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.