NEWS
Platinum Japan Fund - AUD
19 Feb 2013 - Australian Fund Monitors
The Platinum Japan Fund rose 4.66% in January, assisted by moves in the Yen, and is up 21.2% for 12 months, out-performing the buoyant Japanese equity market.
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19 Feb 2013 - Platinum Japan Fund - AUD
By: Australian Fund Monitors
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| Manager Comments | The fund out-performed as a result of it's increased holding to exporters, the primary beneficiaries of the weaker Yen, as well as hedging just under half it's Yen exposure. This assisted in protecting asset values from the depreciating Yen on translation back into AUD. The fund also had cash of 1.6% and shorts of 4.8% of NAV. The manager also notes that the outlook for corporate Japan is improving and that exporters have significant profit gearing to the weaker Yen hence the fund's relatively high net long exposure to the market. |
| More Information | » View detailed profile of this fund |
Kapstream Absolute Return Income Fund
18 Feb 2013 - Australian Fund Monitors
Kapstream Absolute Return Income Fund delivers 8.42% over the last 12 months despite low global interest rates.
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18 Feb 2013 - Kapstream Absolute Return Income Fund
By: Australian Fund Monitors
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| Fund Overview | Kapstream draws on information from many sources such as economic roundtables, investment banks, brokers, rating agencies and central banks. Kapstream employs a rigorous evaluation process for individual trades, first confirming that a prospective trade meets Kapstream's global macroeconomic view, then taking account of various decision variables such as duration, yield curve and volatility which must support the research and analysis. |
| Manager Comments | The manager attributes the good returns to a credit spread rally and a conservative interest-rate position in the portfolio. Other strategy themes include a preference for; floating rate assets to fixed-rate assets on the assumption that monetary policy will tighten at some point, corporate bonds to sovereign bonds and a preference for Asian names and larger allocations to the region. Of interest is that the Fund also favors the debt of Australian/Asian and US financials. In Australia, the fund holds the debt of the big 4 banks including senior debt and lower Tier 1 and Tier 2 paper. The fund has also taken short positions on the 10 year bonds rates of Australia, Korea and Japan via options. The Manager has a reasonably positive view on the US but remains concerned with respect to the outlook for Europe and, to a lesser degree, Australia. |
| More Information | » View detailed profile of this fund |
Hedge Clippings
15 Feb 2013 - Chris Gosselin, Australian Fund Monitors
The Australian equity market rally has now seen the ASX200 rise over 8% YTD, and 26% over the past 12 months, driven not only by the rotation out of cash and term deposits which drove the high yielding banks higher, but more recently also...
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15 Feb 2013 - Hedge Clippings
By: Chris Gosselin, Australian Fund Monitors
The Australian equity market rally has now seen the ASX200 rise over 8% YTD, and 26% over the past 12 months, driven not only by the rotation out of cash and term deposits which drove the high yielding banks higher, but more recently also into previously unloved discretionary consumer and retail sectors.
As a result some of the concentrated, high conviction funds which had struggled over the previous 3 to 4 years have enjoyed stellar, above market performance. Meanwhile the risk averse long short and market neutral funds which had previously protected investors' capital have struggled to find value at current prices. This has been further exaggerated by some aggressive price moves amongst their short positions where valuations have been stretched even further.
In this environment active and absolute return funds as a whole are likely to underperform, as indicated by the table below based on 53% of funds which have to date reported January results:
Index Name |
Jan. 2013 |
12mths Performance |
|---|---|---|
|
All Funds
|
2.92% | 9.85% |
| Equity Based Funds | 3.57% | 12.62% |
| Non-Equity Based Funds | 1.29% | 3.62% |
| ASX 200 | 4.94% | 14.45% |
These are averages, and there have been some significant outliers. 21% of funds in the AFM index outperformed the ASX200's return of 4.95% in January, and 35% have achieved this over the past 12 months. Conversely, 11% of fund returns for January to date have been negative, while 14% have returned negative performances over the past 12 months.
The improved performance and sentiment is welcome, but following 7 straight positive months, and gains in many stocks of over 100% in 2012, it is worth remembering that risk is always present around the corner, often when it is least expected.
This reiterates the focus on the need for research and investors' understanding. We have just completed collating industry figures covering fund and strategy performances not only for 2012, but also for five and ten years since 2008 and 2003 respectively. What the data clearly shows is that over the longer term the average absolute return fund has performed above (5 years) or in line (10 years) with the ASX200 but at a fraction of the market's volatility.
For a copy of AFM's "Volatility eats Returns" report please email us.
Finally, Now for something completely different this week, the 2 Ronnies Name Dropping; or if you find something a bit more risque amusing, try this one.
Regards,
Chris.
Platinum International Fund
15 Feb 2013 - Australian Fund Monitors
Platinum delivers 4.68% during January and up a strong 18.72% over the six months.
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15 Feb 2013 - Platinum International Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund did well from its European holdings as well as Japanese investments, where the Topix rose 9%. The Japanese investments were aided by Yen hedging and derivative exposure to the Topix, but somewhat hampered by a lack of exposure to exporters, the major beneficiaries of the weaker Yen. The Fund also benefited from a reduced short exposure of 12%, its lowest position in years. The Fund was impacted by the decline in some Chinese holdings as the SEC indicated concerns over Chinese company reporting. The manager has a positive outlook for equities based on economic factors, reduced risk aversion and equity valuations. While not calling a bull market the manager does see a period of equity buoyancy and the fund is invested accordingly. |
| More Information | » View detailed profile of this fund |
Aurora Fortitude Absolute Return Fund
14 Feb 2013 - Australian Fund Monitors
Aurora Fortitude delivers -0.19% during January, a difficult month for absolute return funds.
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14 Feb 2013 - Aurora Fortitude Absolute Return Fund
By: Australian Fund Monitors
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| Manager Comments | The fund recorded gains in the yield, mergers and acquisitions and convergence strategies with the options and long/short strategies recording losses. The manager comments that options portfolio recorded strong gains from Sydney Airport, Commonwealth Bank and Incitec. However significant declines in volatility and directional positioning led to losses. The decline in actual volatility to record lows has impacted but the manager expects this to return to long term averages. The fund's performance is notable for the fact that it has recorded 86.3% positive months since inception and was the only fund in our database (and perhaps globally) to record a positive return every month in 2008. Increases in volatility will contribute to fund returns. |
| More Information | » View detailed profile of this fund |
Bennelong Long Short Equity Fund Performance Report
14 Feb 2013 - Australian Fund Monitors
The Bennelong Long Short Equity Fund delivers 0.46% in January resulting in a total of 11.99% for the previous 12 months.
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14 Feb 2013 - Bennelong Long Short Equity Fund Performance Report
By: Australian Fund Monitors
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| Manager Comments | The manager found conditions difficult as the market rallied strongly despite a weak earnings growth outlook. Portfolio long positions performed very well in the market rally. However investors tended to invest in stocks with low return on equity and this hurt the fund's short positions. The fund did look to ameliorate this impact where appropriate and in line with the manager's fundamental view. Within sectors the fund did well in Consumer Discretionary and Information Technology and lost value in Healthcare and Staples. The manager sees further domestic rate cuts, an improving growth outlook globally and an increasing allocation to equities as factors supporting the market. However the lack of earnings growth and extended valuations are a concern. |
| More Information | » View detailed profile of this fund |
NAOS Long Short Equities Fund
13 Feb 2013 - Australian Fund Monitors
The NAOS Long Short Equity Fund delivers 21.4% during January bringing the 12 month return to 42.02%.
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13 Feb 2013 - NAOS Long Short Equities Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund recorded a good profits from its holdings in financials, consumer discretionary, materials and Healthcare. At the company level strong contributions (either long or short) came from Pharmaxis, Ten Network, Cokal Ltd and Maverick Drilling and Exploration. The manager did not comment on losing positions over January. In terms of market performance the manager notes that small caps have not yet generated meaningful returns. Small caps have under-performed the All Ordinaries Accumulation Index by 15% over the last 12 months. Markets will look to the February reporting season to see if earnings will support valuations in the short term. |
| More Information | » View detailed profile of this fund |
Apeiron Global Macro Trust - Class A
12 Feb 2013 - Australian Fund Monitors
The Blue Sky Apeiron Global Macro Trust delivers 3.85% in January in a'risk-on' environment.
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12 Feb 2013 - Apeiron Global Macro Trust - Class A
By: Australian Fund Monitors
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| Manager Comments | The Fund lost money on it's short positions in US equity and Japanese Govt bonds. Profitable positions included long crude oil (WTI) while the short Yen position was the most profitable investment as the Yen fell sharply over January. The manager remains comfortable with the medium term outlook for the short Japanese Govt bond and Yen positions and continues to forecast difficult political and economic conditions in Europe. |
| More Information | » View detailed profile of this fund |
Optimal Australia Absolute Trust
11 Feb 2013 - Australian Fund Monitors
Optimal Australia's Absolute Trust returns 0.46% in January but believes real value remains difficult to find
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11 Feb 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 | Stocks that were at fair, or full value became expensive, and those that were already overvalued, and therefore candidates for the short book, became more so. As such Optimal finds this a considerable dilemma from a portfolio construction perspective as fundamental value investors, being reluctant to short overvalued stocks in the face of the current momentum and weight of money buying. As a result both gross and net exposure of the portfolio remain relatively low at 56% and 3% respectively. |
| More Information | » View detailed profile of this fund |
Bennelong Kardinia Absolute Return Fund
6 Feb 2013 - Australian Fund Monitors
Bennelong Kardinia's Absolute Return Fund delivers a return of 2.21% during January, their eighth consecutive positive month.
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6 Feb 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 ASX 300 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. The Fund was launched on 17th August 2011 following the resignation of Portfolio Managers Mark Burgess and Kristiaan Rehder from Herschel Asset Management in late July 2011. While at Herschel Burgess and Rehder had managed the Fund under the name of the Herschel Absolute Return Fund. As a result management of the Fund was transferred to Kardinia Capital, a new boutique fund manager 65% owned by Burgess and Rehder, with the balance owned by Bennelong Funds Management. The Fund's investment strategy and prior track record remains intact. |
| Manager Comments | The Manager notes the market advance was broad-based and that cyclicals out-performed the defensive sectors with consumer discretionary, media, financials and retail all moving up strongly. Weaker(defensive) sectors were utilities and healthcare. The fund holdings in News, NAB, Telstra, ANZ, Henderson and IOOF all performed strongly on the long side. Performance was held back by short positions, a number of which were closed or reduced over January. Gross exposure was up sharply to 70.7% for a net exposure of 45.9%, composed of 58.3% long and 12.4% short . Toward the end of the month the fund invested in puts and futures to hedge market risk after the very strong rally in January. |
| More Information | » View detailed profile of this fund |
