NEWS
Fund Review: Morphic Global Opportunities Fund
16 Aug 2013 - Australian Fund Monitors
AFM's updated Fund Review for Morphic Global Opportunities Fund, showing KPI's for July 2013 vs ASX200, Performance (net of fees) and Cumulative Performance since inception.
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16 Aug 2013 - Fund Review: Morphic Global Opportunities Fund
By: Australian Fund Monitors
Fund Review: Morphic Global Opportunities Fund (pdf format)
MORPHIC GLOBAL OPPORTUNITIES FUND
Attached is our most recently updated Fund Review on the Morphic Global Opportunities Fund.
We would like to highlight the following aspects of the Fund:
- The Morphic Global Opportunities 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.
- 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.
- Portfolio construction is stock selection agnostic with a bias to valuebased and momentum strategies. Risk management is a primary consideration in portfolio construction.
- Morphic's philosophy is that only funds with flexible hedging strategies will be able to deliver acceptable, steady, real, absolute returns over the investment cycle.
Research and Database Manager
Australian Fund Monitors
Fund Review: Morphic Global Opportunities Fund (pdf format)
BlackRock Australian Equity Market Neutral Fund
16 Aug 2013 - Australian Fund Monitors
The BlackRock Australian Equity Market Neutral Fund returned 1.92% for July. The since inception (August 2001)return is 12.23% pa.
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16 Aug 2013 - BlackRock Australian Equity Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's portfolio primarily consists of long and short Australian equity positions. The Fund may also invest in other funds managed by BlackRock. Derivative securities, such as futures, forwards, swaps and options, can be used to manage risk and return Key insights into the investment process include: Analyst Expectations, Relative Valuation, Earnings Quality, Market Signals and Timing. Short-Term return enhancing opportunities including: Dividend reinvestment plans, Manging index changes, Managing cash flows and Arbitrage, Initial public offerings and Seasoned Equity Offerings and Off Market Buybacks. |
| Manager Comments | The Fund's risk characteristics are notable with an annualised standard deviation of 5.71% and largest drawdown of -12.41% since inception, as compared to the ASX 200 Accumulation numbers of 13.27% and -47.19% respectively. In addition, over the same time frame, the Fund's up capture ratio is 0.11 and down capture ratio -0.60. Portfolio performance was strong in July. Solid gains for oil and gas stocks, assisted by geo-political tensions lifting the oil price, contributed significantly to portfolio performance. The weakness of domestic defensives, as cyclicals rallied, was another major contributor to performance. Of the investment insights, market and quality insights dominated portfolio performance, particularly the reversionary signals which had an outstanding second half of the month. |
| More Information | » View detailed profile of this fund |
Aurora Fortitude Absolute Return Fund
15 Aug 2013 - Australian Fund Monitors
The Aurora Fortitude Absolute Return Fund returned 1.13% during July bringing since inception returns to 8.29% pa.
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15 Aug 2013 - Aurora Fortitude Absolute Return Fund
By: Australian Fund Monitors
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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 | All four underlying strategies were positive over the month, with Long/Short the best performer primarily due to a long position in mortgage provider RHG. The demerger of Newscorp and 21st Century Fox also led to good inter-market trading opportunities between US and Australian exchanges benefitting the Convergence strategy. |
| More Information | » View detailed profile of this fund |
Fund Review: Bennelong Kardinia Absolute Return Fund
14 Aug 2013 - Australian Fund Monitors
AFM's updated Fund Review for BKARF, showing KPI's for July 2013 vs ASX200, Performance (net of fees) and Cumulative Performance since inception.
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14 Aug 2013 - Fund Review: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
Fund Review: Bennelong Kardinia Absolute Return Fund (pdf format)
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.
Key points regarding the Fund are:
- Kardinia is a boutique Australian based Fund Manager established in August 2011 in conjunction with the Bennelong Group to continue the management of the Herschel Absolute Return Fund.
- Long biased, research driven, active equity long/short strategy investing in listed ASX companies with a seven year track record and an annualised return of 14.13% net of fees.
- Portfolio Managers Mark Burgess and Kristiaan Rehder have significant market experience, while the Bennelong Group provide infrastructure, operational, compliance and distribution capabilities.
- Consistent top decile long short equity sector performance with Key Performance and Risk Statistics indicating an attractive risk/reward profile. There is a strong focus on capital protection in negative markets.
Research and Database Manager
Australian Fund Monitors
Fund Review: Bennelong Kardinia Absolute Return Fund (pdf format)
Pengana Australian Equities Fund
13 Aug 2013 - Australian Fund Monitors
The Pengana Australian Equities Fund returned 2.00% for July and 22.92% for the 12 months ended July.
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13 Aug 2013 - Pengana Australian Equities Fund
By: Australian Fund Monitors
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| Manager Comments | As at 31st July, cash (including notes and preference shares) represented 28% of the Fund. The top five holdings by value were: DUET Group, ANZ Bank, Telstra, Resmed and the Caltex Group. The largest positive contributors to the month's performance came mainly from a rebound in those companies that were sold off in the prior two months. These included Duet Group, Seven West Media, Mermaid Marine and Telstra. The Fox Group (recently spun out of News Corporation) also represented a consistent positive contributor. After many years of significant and substantial gains, the McMillan Shakespeare share price fell sharply following the unexpected proposal by the Labor government to make a fundamental change to the fringe benefits tax legislation. While this impacted negatively on the Fund's monthly performance (by approximately -1%), the major portion of the Fund's holding had already been sold in prior months due to valuation concerns independent of this event. The Fund increased its existing holdings in Caltex, ANZ Bank, Resmed, Woolworths, CSL and McMillan Shakespeare with the latter occurring following the sharp sell-off during the month. The Fund's exposure to non-Australian dollar earnings streams (inclusive of companies with global earnings profiles such as Resmed and Fox Group, NZ based companies and US dollar exposure) stands at 21%. The Fund disposed of its holdings in Myer and APN. |
| More Information | » View detailed profile of this fund |
Optimal Australia Absolute Trust
12 Aug 2013 - Australian Fund Monitors
The Optimal Australia Absolute Trust returned 0.35% over July bringing it's since inception (September 2008) return to 11.11% pa.
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12 Aug 2013 - Optimal Australia Absolute Trust
By: Australian Fund Monitors
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| Fund Overview | The Fund's bias is likely to be net long under normal market conditions, with the core strategy being to construct a portfolio of listed equity securities priced at levels that do not adequately reflect their underlying value. The Fund will seek to boost returns and limit potential market downside by selective short selling of individual stocks which are priced at levels that are viewed as materially above their underlying value. The Fund will also use certain trading strategies both within its core portfolio (through rebalancing stock weights and overall market exposure in response to price movements) and in certain other situations (typically of a shorter-duration and/or opportunistic nature) with the objective of further increasing returns. |
| Manager Comments | The fund's risk statistics are notable. Downside capture ratios are -0.11, -0.12 and -0.22 over the last 12, 24 and 36 months respectively indicating that, on average, the fund has positive returns when the overall market is negative. Specifically, the fund has had positive monthly returns of 0.33%, 0.39% and 0.48% when the market is negative over the previous 12, 24 and 36 months. The Manager comments that it is certainly possible that equities will remain the 'best of a bad lot' from an asset allocation perspective, which may drive additional money flows and further price gains. However, in the Manager's view, equity valuations in Australia are essentially unattractive for a market which will likely follow any progressive, US-led normalisation of long bond rates, but which has vastly less certainty over earnings growth. There will always be opportunities for the fund at a stock level, especially through what appears likely to be a challenging earnings season. From this juncture ― featuring elevated volatility, high valuation, a questionable growth outlook, a risk that yield curve normalisation turns disorderly, and thus significant capital risk ― the Manager continues to favour a low net exposure, hedged approach to managing the fund's capital. |
| More Information | » View detailed profile of this fund |
Hedge Clippings
9 Aug 2013 - Australian Fund Monitors
Weekly commentary and opinion from AFM's CEO, Chris Gosselin. This week, Chris discusses rates down to historic lows and the budget deficit expands to fit a black hole.
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9 Aug 2013 - Hedge Clippings
By: Australian Fund Monitors
Recent market volatility, which saw the ASX200 fall in March, May and June gave way to a much improved month in July, with the ASX200 Accumulation Index rising 5.2% to take 12 month performance to 23.75%. Equity based hedge funds have on average only marginally underperformed, with average returns for July of +4.24%, and 12 months of 20.61%.
Based on the 39% of funds reported for July, returns to date 35% outperformed the ASX200, with that figure falling to 23% over the past 12 months. The best performing strategy for July was Equity 130/30 at 6.34% taking 12 month performance to +27%.
Rates down to historic lows
That the bulls are out in force in a market which has risen over 20% is positive news, although significant further gains seem to be at odds with some current fundamentals. The past week has seen the RBA cash rate fall to 2.50% on the back of a weaker overall economy, business confidence has reached a four year low, and unemployment a four year high.
Election / Budget deficit expands to fit a black hole
Add to that an election campaign where the outcome is not the forgone conclusion that it was a month or two ago, and a revised budget deficit of $30 billion, up from the previous estimate of $18 billion which was only provided 10 weeks ago. Given both sides of politics will no doubt be wanting to tempt voters with further welfare generosity and/or tax concessions over the next four weeks of the campaign, it would seem that whichever party wins the election will have to deal with further increases in the deficit.
Some specific results received this week include the following Performance and News Updates:
Allard Investment Fund returned 0.2% during June and 17.65% for the 12 months to June 2013. Returns since inception (July 2003) are 9.02% annualised.
The AUI Wingate Global Equity Fund returned 3.69% during June bringing the financial year performance for FY 13 to 29.79%. On a monthly basis for the past 12 months, the portfolio captured 91% of the market's gain when the market was positive but only 54% when the market was negative.
Bennelong Kardinia Absolute Return Fund returned 1.31% during July bringing it's twelve month return to 15.20%. The since inception (May 2006) return is 14.13% pa.
The Morphic Global Opportunities Fund returned 7.71% during July and 41.16% over the previous twelve months. The Fund is fully invested and overweight in the US and Japan, although the latter overweight has been reduced. The Fund remains un-hedged into Australian dollars and has slowly increased its short position in the currency versus the US dollar and the Euro.
Bennelong Long Short Equity Fund returned 3.52% during July. Fund performance was solid with the long portfolio comfortably outperforming the negative impact from the short portfolio. At the sector level, the best positions were in Consumer Discretionary, Energy and Materials which were all strong but partially offset by negative returns in Industrials and Financials.
For something completely different - Oh What a Feeling?
On that note, I hope you have a happy and healthy weekend!
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
Morphic Global Opportunities Fund
9 Aug 2013 - Australian Fund Monitors
The Morphic Global Opportunities Fund returned 7.71% during July and 41.16% over the previous twelve months.
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9 Aug 2013 - Morphic Global Opportunities Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund's top contributors this month were a handful of individual stocks in a variety of countries, a basket trade in US financials, plus gains from the Manager's belief that the Australian dollar would continue to fall and that Australian and US short term interest rates would stay low for considerably longer than the market had been expecting. The main detractors to performance this month were reasonably small. The Manager had eased its way back into shoe manufacturer Crocs this month but exited again after the company made disappointing comments on its short term outlook. The Fund's Japanese home builder basket was also weak as initial results from companies in the sector proved to be lacklustre, and these shares have also now been sold. The Fund is fully invested and overweight in the US and Japan, although the latter overweight has been reduced. The Fund remains un-hedged into Australian dollars and has slowly increased its short position in the currency versus the US dollar and the Euro. |
| More Information | » View detailed profile of this fund |
Bennelong Long Short Equity Fund
9 Aug 2013 - Australian Fund Monitors
The Bennelong Long Short Equity Fund returned 3.52% during July and 13.89% over the previous 12 months.
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9 Aug 2013 - Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Manager Comments | Fund performance was solid with the long portfolio comfortably outperforming the negative impact from the short portfolio. At the sector level, the best positions were in Consumer Discretionary, Energy and Materials which were all strong but partially offset by negative returns in Industrials and Financials. The August reporting season is expected to be patchy as the domestic economy remains weak however market expectations are commensurate with the poor operating conditions. As such there may not be too many surprises when profits are released. |
| More Information | » View detailed profile of this fund |
Bennelong Kardinia Absolute Return Fund
7 Aug 2013 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund returned 1.31% during July bringing it's twelve month return to 15.20%.
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7 Aug 2013 - Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund consists of a concentrated long/short portfolio typically comprising 30 to 40 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. There is a slight bias to large cap stocks in the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 10 to 15% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. |
| Manager Comments | Global equity markets rallied strongly in July with the MSCI World Index up 5.2%. In the US, the Q2 reporting season began well and economic data continued to improve. Despite deteriorating domestic economic news and signs of slowing Chinese growth, the S&P/ASX 300 Accumulation Index rose 5.3%. The Bennelong Kardinia Absolute Return Fund rose 1.3% in July with limited Resources and small cap exposure contributing to a relatively disappointing month. CSL, EBOS, QBE Insurance and BHP Billiton performed strongly, whilst McMillan Shakespeare, Share Price Index futures contracts (hedging long positions) and Treasury Wine Estates were significant detractors from performance. Net equity market exposure (including derivatives) was progressively increased through the month to 50.8% (58.5% long and 7.7% short). |
| More Information | » View detailed profile of this fund |
