NEWS
27 Sep 2013 - Intelligent Investor Value Fund
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| Manager Comments | The Fund's value strategy is shown by the Sharpe Ratio of 0.73 as compared to the Index Sharpe Ratio of 0.32 (since inception). The Manager notes that the share price falls in the last week of August wiped out most of the Intelligent Investor Value Fund's gains in the first few weeks of the month. The unit price rose 1.1% but was beaten by the benchmark All Ordinaries Accumulation Index which returned 2.6%. |
| More Information | » View detailed profile of this fund |
26 Sep 2013 - Allard Investment Fund
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| Manager Comments | In terms of geographic allocation the Fund's major allocations are 32.1% HK/China and 13.1% Singapore and in terms of industry the biggest exposure is financial services at 14.5% and conglomerates, 12.2%. The Fund's lower risk characteristics are shown by the annualised volatility of 8.2% pa as compared to that of the MSCI ASia Pacific ex Japan ($A) of 13.8%, over the last ten years. |
| More Information | » View detailed profile of this fund |
25 Sep 2013 - Fund Review: Insync Global Titans Fund
INSYNC GLOBAL TITANS FUND
Attached is our most recently updated Fund Review on the Insync Global Titans Fund.
We would like to highlight the following:
- The Global Titans Fund invests in a concentrated portfolio of 15-25 stocks, targeting exceptional, large cap global companies with a strong focus on dividend growth and downside protection.
- Portfolio selection is driven by a core strategy of investing in companies with sustainable growth in dividends, high returns on capital, positive free cash flows and strong balance sheets.
- The investment strategy has delivered above MSCI ($A) benchmark performance over the medium and longer terms with limited drawdowns and excellent risk statistics.The Sharpe ratio is 0.67 (ASX 200 Acc 0.26) and Sortino ratio 1.17 (ASX 200 Acc 0.28) and are well above those of the ASX with downside deviation approximately one-half of the same Index since inception. The Fund has a record of 62% positive months and a downside capture ratio of -0.42 over the same time frame.
- Emphasis on limiting downside risk is through extensive company research, the ability to hold cash and long protective index put options.
Research and Database Manager
Australian Fund Monitors
Fund Review: Insync Global Titans Fund (pdf format)
24 Sep 2013 - 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 as determined by Totus Capital. 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 | Since inception in April 2012 the Fund has returned 29.1% (24.2% ASX 200 Acc Index) with a Sharpe Ratio of 1.41, Sortino Ratio of 3.14 and a down capture ratio of -0.84. The Fund also has a negative correlation of -0.209 to the Index. August was a tricky month for the fund. A number of the trends that the Manager had anticipated heading into reporting season did in fact play out but struggled to make money from them. The Manager had anticipated weak outlook statements and consensus earnings downgrades from a number of cyclical companies (and had positioned accordingly) yet many of these stocks rallied in spite of the downgrades. The Manager has been gradually trimming short positions (particularly in cyclical companies) and increasing the net long exposure of the fund. |
| More Information | » View detailed profile of this fund |
23 Sep 2013 - Pengana Australian Equities Market Neutral Fund
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| Fund Overview | The manager's investment approach is premised on the belief that fundamental factors (such as earnings, cash flow and profit growth) affect stock prices, but that the adoption of quantitative techniques (i.e. computer based models) provides an advantage in assimilating and analysing this information, and building an efficient portfolio. The Fund's portfolio is constructed to be 'Market Neutral' i.e. it aims to have little or no overall exposure to movements in the equity market. The aim of low exposure to market movements is to enhance the consistency of the portfolio's performance and to provide diversification from other market oriented investments. |
| Manager Comments | Since inception the Fund has an annualised standard deviation of 8.02% compared to 15.48% (Index) and the risk-reward and risk statistics are sound with a Sharpe ratio of 0.7 (0.12 Index) and a Sortino Ratio of 1.06 (0.06 Index). The August performance was 3.8%. The Manager notes that the portfolio gained better traction from the Value fundamental factor during August with Value continuing its recent strong performance following the sharp positive shift in July. Risk appetite continues to stay in focus with the higher risk stocks outperforming lower risk, higher yielding stocks. |
| More Information | » View detailed profile of this fund |
20 Sep 2013 - Hedge Clippings
Five years ago this week the world's financial system was in meltdown mode as Lehman Brothers filed for bankruptcy protection (September 15th 2008) and by September 22nd a deal was put to the bankruptcy court which saw Barclays acquire Lehman's core business. This was closely followed on 22nd September by Nomura acquiring Lehman's Asia Pacific businesses, including those in Australia.
Bankruptcy Judge James Peck was quoted as saying that Lehmans was "in effect the only true icon to fall in a tsunami that has befallen the credit markets." In reality plenty of others fell also, including local Australian companies such as Babcock and Brown and Allco, although whether they were "true icons" is perhaps debatable.
On the 15th September the Dow closed down 4.4%, and on September 29th it fell by an even larger 7%. Panic gripped investors as credit markets froze, counter party risk went off the Richter scale, and wealthy investors reputedly backed their cars up to their local bank branch with empty suitcases at the ready.
To be fair to Kevin Rudd and his so called "gang of four" the decision at the time to effectively guarantee the Australian banks prevented complete panic. Those not prepared to give Rudd any credit for anything will no doubt claim he did the only thing possible, and for once took the advice of others more knowledgeable than himself.
Wind forward five years and the Dow is back at record territory thanks to QE tapering being shelved indefinitely, while the ASX200 is at five year highs but still around 20% below its pre crisis highs. In spite of this some US based funds are rumoured to be shorting the Australian banks, based on their valuations and the risk of a property bubble.
Given the total reported short positions of the big four banks as per ASIC's reports dated 10th range from a low of 0.23% (NAB) to 0.72% (WBC) of total outstanding shares they're certainly not piling into the trade with their ears pinned back, which is probably sensible. Australian house prices might be expensive, but given local factors such as supply and demand, low interest rates, immigration and negative gearing they're unlikely to collapse any time soon.
Meanwhile fully franked bank yields (over 5% pre franking) and the lowest interest rates in most borrower's memory will probably support valuations as well. Of all these factors the removal of negative gearing probably poses the greatest threat, but given Tony Abbott's only just been elected, he's unlikely to want to jump off the political cliff quite that quickly.
So markets seem underpinned, hooked on QE. Maybe Ben Bernanke didn't want to end his tenure on a sour note.
An upcoming event that may be of interest for Superannuation member administration and investment operation service providers is the Superannuation Fund Back Office conference coming up on 21-22 October. Visit the International Business Review Conferences website for more details.
If you are visiting Hong Kong, the UCITS Asia 2013 Conference is on 9-10 October. AFM have a 10% discount coupon available, more details here.
The Asset Allocation Conference is also coming up from 30th October to 1 November 2013 at the Grace hotel in Sydney. Details are here.
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.
Specific results received this week include the following PERFORMANCE and NEWS UPDATES:
Insync Global Titans Fund recorded -1.95% during August with the Fund's low risk shown by the maximum drawdown of -2.04% (ASX Accumulation Index -6.72%) over the last 12 months. The low risk attributes are further indicated by its downside deviation of 3.16% (Index 5.93%) and a down capture ratio of -0.80, also over the last 12 months.
The Pengana Asia Special Events (onshore) Fund returned 1.03% during August 2013 with gross and net exposure averaging 158% and 12% respectively. Short index futures protected the Fund during the month, while non-directional trades such as M&A and stubs trades also contributed positively to performance. Malaysian and Japanese trades proved particularly profitable during the month.
Auscap's Long Short Australian Equities Fund had a strong August returning 4.28% with an average net exposure of 61.1% (96.1% long and 35.0% short) across 22 long positions and 13 short positions. The Fund's biggest exposures were spread across consumer discretionary, financials, healthcare and telecommunications sectors. The manager has written an interesting article on the relative merits of investing in large and mid cap versus small caps. You can read the report here.
Updated AFM Fund Reviews were also completed on the following funds this week:
The Bennelong Kardinia Absolute Return Fund has returned consistent top decile long short equity sector performance with a since inception (May 2006) return of 14.11% pa (ASX Accumulation Index 4.18% pa) and a standard deviation of 7.89% pa (Index 14.86%) indicating the Fund's ability to generate strong risk-adjusted returns. The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies with a seven year track record.
Optimal Australia Absolute Trust is a specialist Australian equity investment manager and the Fund has recorded out-performance of the market since inception in September 2008 with approximately 84% of monthly performances having positive returns and the largest drawdown -1.38%. 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 Aurora Fortitude Absolute Return Fund has an 8 year track record investing in ASX listed equities. Over 87% of monthly performances have been positive, with no losing months in 2008 and a largest drawdown of -2.09%. Strong use of low risk "long" derivatives and option overlays has provided positive returns with low volatility during periods of market dislocation.
Morphic's Global Opportunities 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 and currencies. 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. Risk management is a primary consideration in portfolio construction and the strong emphasis on risk is evidenced by the Fund's very high Sortino ratio of 14.88 and maximum drawdown of -0.52%.
For something completely different - tomorrow is Leonard Cohen's 79th birthday. For someone who spent a reasonable part of his mis-spent youth listening to tracks such as "Suzanne" and "Bird on a Wire" I thought you might like to listen to the great man's live recording (and his explanatory preamble) of Chelsea Hotel. According to Wikipedia the landmark Chelsea Hotel is currently closed for renovations, but remains a feature in many films, songs and books.
On that note, enjoy the week-end!
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
20 Sep 2013 - Auscap discussion on Large Cap versus Small Cap investing
Auscap Long Short Australian Equities Fund
The manager of the Auscap Long Short Australian Equities Fund has written an interesting article on the relative merits of investing in large and mid cap versus small caps.
This article can be accessed using the following link: Auscap Long Short Australian Equities Fund
For further details on the Fund, please do not hesitate to contact us.
Research and Database Manager
Australian Fund Monitors
20 Sep 2013 - Auscap Long Short Australian Equities Fund
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| Fund Overview | The Fund focuses on fundamental long and short investments. The Fund may utilise a multi-strategy approach if short term opportunities to increase returns, hedge the portfolio, protect capital or minimise volatility are found. The Fund is a high conviction fund and the combined portfolio will typically have 25-45 positions, investing primarily in stocks in the ASX200. The Fund may be net long, short or neutral depending on the strategies employed at the time. The Fund may hold cash so that it is in a position to take advantage of market volatility and compelling investment opportunities as and when they arise. The Fund may be geared up to 200% gross long or short and up to 150% net long or short. |
| Manager Comments | The Fund's biggest exposures were spread across consumer discretionary, financials, healthcare and telecommunications sectors. The Manager has written an interesting piece on their view of the relative merits of large cap versus small cap investing. |
| More Information | » View detailed profile of this fund |
19 Sep 2013 - Fund Review: Morphic Global Opportunities Fund
MORPHIC GLOBAL OPPORTUNITIES FUND
AFM has updated the Fund Review on the Morphic Global Opportunities Fund.
Key points include:
- 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 value based and momentum strategies. Risk management is a primary consideration in portfolio construction and the strong emphasis on risk is evidenced by the Fund's very high Sortino ratio of 14.88 and maximum drawdown of -0.52%.
- 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.
- The 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 full Review can be accessed from the link below, or from the Fund's Profile page.
For further details on the Fund, please do not hesitate to contact us.
Research and Database Manager
Australian Fund Monitors
Morphic Global Opportunities Fund (pdf format)
9-10 October 2013, The Excelsior Hotel, Hong Kong. 10% Discount with VIP Code..
18 Sep 2013 - UCITS Asia 2013
UCITS Asia 2013
Strategies for Enhancing Your Presence in Asia and Accessing Local End-Investors
9-10 October 2013, The Excelsior Hotel, Hong Kong
For more information please visit UCITS Asia 2013 (10% Discount with VIP Code: FKW52626FMWB)
With the region's most influential funds (both local and global) in attendance, IIR & IBC Finance Events will be outlining the most effective routes to market for launching and growing your product.
FOCUS ON ASSET MANAGERS
- Mutuals: Asset Manager's Priorities
- Alternatives: Current Fund Strategies
- Chinese Asset Manager Panel
FOCUS ON DISTRIBUTION
- Is UCITS Still Relevant?
- Successful Distribution Strategies
- Sales Trends & Investor Appetite
- Advisory Fee Transparency
FOCUS ON CHINA
- Mutual Recognition Scheme
- Distribution Within China
- How Chine is internationalising
FOCUS ON REGULATION
- AIFMD vs. UCITS
- Bringing Funds Onshore
- UCITS V Implementation
- HK Registration
Expert Speakers include:
REGULATORS
Christina Choi, Senior Policy Director, SFC
FUNDS
Freddie Chen, Executive Director, CHINA ASSET MANAGEMENT
Sundeep Sikka, CEO, RELIANCE CAPITAL AM
Nick Good, Head, Strategy & Business Development, APAC, BLACKROCK
Ashwin Mehta, CEO, ING SECURITIES & INVESTMENT TRUST
INVESTMENT MANAGEMENT
Jenny Tian, Managing Partner, SPRING CAPITAL
Eleanor Wan, CEO, BEA UNION INVESTMENT
Gerard de Benedetto, CEO, AN ZHONG ASSET MANAGEMENT
LEGAL
Alwyn Li, Partner, DEACONS
Stephane Karolczuk, Partner, ARENDT & MEDERNACHT
SERVICE PROVIDERS
Siu-chan Kwan, Director, Securities & Funds Services, CITI
Lawrence Au, Head of Asia Pacific, BNP PARIBAS SECURITIES SERVICES
Stewart Aldcroft, CEO, CITITRUST
To register visit website; call us on +44 (0)20 7017 7790 or email us.
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