September Fund Performance

With close to 90% of single fund performances to hand, September is looking to be a pretty normal month for AFM's database of over 300 funds. By normal, I guess we're talking about averages - the ASX200 accumulation index rose 2.19% and the AFM Equity Fund Index as good as matched that at +2.17%.

Beyond that the breakdown and distribution of returns, be it by individual fund or strategy, was anything but stable: Equity based funds significantly outperformed those in the non-equity category, which only managed to return 0.49%.  Based on returns to date 32% of all funds outperformed the ASX200 and 84% provided positive returns, with individual performances as varied as ever, ranging from -12% through to +13%. While that might seem extreme, it is not particularly unusual as the distribution of returns over the past 12 months ranges from -42% through to +70%, with just over 25% outperforming the ASX200.

So there's nothing "normal" about hedge funds, each and every one is individual.

Meanwhile the Hedge Fund Association's Australian chapter held a seminar this week with David Walter of PAAMCO as the guest speaker. David has extensive industry experience and discussed the current environment for local funds wanting to raise institutional capital offshore. Amongst his other insights were:

• Cayman is the preferred fund domicile for international investors, although Europe and UCITS structures are making some inroads.
• An independent and appropriately experienced board of directors is becoming mandatory.
• Operational issues and compliance are increasingly important, including independent reporting lines to the board for risk and operations executives.
• The days of the "2 and 20" fee structure are gone, as are lockups and long redemption terms (although AFM's data shows this has long been the case locally).
• Transparency is essential, quoting one investor whose policy is "Why should we trust you with our money if you won't trust us with your information".

With the exception of the Cayman Island structure it would seem there's little difference between the demands of institutional investors here and overseas, it is just there are less of them locally and they allocate to the sector less.  So David's advice to managers wanting to raise FUM offshore to (apart from the above prerequisites) "travel, travel, travel" would seem spot on.

Specific results received this week include the following PERFORMANCE and NEWS UPDATES:

The Auscap Long Short Australian Equities Fund gained 5.84% in September, taking YTD performance to an impressive 34.48% as they approach thier first anniversary.

Pengana's Asia Special Events (onshore) Fund rose 0.88% in September and 3% for the quarter, noticing a significant pick up in opportunity.

The Intelligent Investor Value Fund  has a 12 month return of 42.68% and annualised return since inception (November 2009) of 15.09%.

Pengana's Australian Equities Fund returned 1.38% in September to take it's 12 month performance to 24%, matching the ASX Accumulation Index, but with significantly less volatility.

FUND REVIEWS that have been updated this week include:

The Optimal Australia Absolute Trust is a specialist Australian equity investment manager with a long/short strategy, and has out-performed the market since it's inception in September 2008.

Insync's Global Titans Fund shows the fund delivering an annualised return of 9.26% and annualised standard deviation of 8.34%.

The Morphic Global Opportunities Fund recently completed it's first year of operation, having returned 29.91% over 12 months with volatility of under 10%.

BlackRock's Australian Equity Market Neutral Fund has a market neutral strategy that gains exposure to long and short positions in Australian equities.

EVENTS

Hedgeopolis New York is being held on 4 November at the Metropolitan Club. Use AFM's discount code "fundmo" to obtain a discount, or contact Adriana Costov for additional information.

Back in Hong Kong, the 26th Annual AVCJ Private Equity and Venture Form is at the Four Seasons Hotel from 12-14 November 2013.

IPARM Australia 2013 is being held in Sydney on 18-19 November on Investment Performance Measurement Attribution and Risk. Speakers include Dr Thomas Gillespie from Aurora Funds Management.

Also on 19 November, at the Renaissance Hotel in Hong Kong - the Art of Asset Management - free for senior asset management professionals from both global and local asset management firms. View the agenda here.

And now for something completely different, this video is called Funny Friday and I hope it brings a smile to your face.

On that note, enjoy the week-end!

Regards,

Chris
CEO, AUSTRALIAN FUND MONITORS

Connect with me on LinkedIn Twitter Facebook

MORPHIC GLOBAL OPPORTUNITIES FUND

ATTACHED FILESMorphic Global Opportunities Fund (pdf format)

INSYNC GLOBAL TITANS FUND

ATTACHED FILESInsync Global Titans Fund (pdf format)