NEWS
9 Aug 2013 - Morphic Global Opportunities Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | |
| 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 |
9 Aug 2013 - Bennelong Long Short Equity Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | |
| 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 |
7 Aug 2013 - Bennelong Kardinia Absolute Return Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| 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 |
6 Aug 2013 - AUI Wingate Global Equity Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The Fund's derivatives strategy primarily involves the selling of cash-backed put options to purchase stocks at a price in Wingate's fair price range but below current market price. The sale of the put option can result in either purchase of the stock at an acceptable price to Wingate, or the Fund receiving income in the form of the option premium. Importantly all option positions are fully backed by cash holdings and the Fund does not borrow to make investments. In addition, covered call options may be used to sell stocks that are held in the portfolio. |
| Manager Comments | 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. The Fund's performance benefited from strong stock selection in the US, offset by a lack of exposure to Japan and an under-weight position to European shares. The Fund's total return was also helped by the weakening US dollar. In a low-growth macro environment the portfolio has increased its exposure to companies returning significant amounts of capital through dividends or share-buy backs. |
| More Information | » View detailed profile of this fund |
5 Aug 2013 - Allard Investment Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | |
| Manager Comments | The Fund was 71.4% invested with 28.6% held in cash and fixed income (allocated 14.8% of NAV in HK dollars, 4.0% of NAV in US dollars and 9.8% of NAV in Australian dollars). In terms of geographic breakdown HK/China was 33.4% of NAV, followed by Singapore at 13.4% and Korea at 11.2%. The Industry break-down was Financial Services 15.0% of NAV, Conglomerates at 12.6% and Telecommunications at 8.5%. The portfolio top five holdings were 38.9% of total NAV with the next five holdings at 16.3%. |
| More Information | » View detailed profile of this fund |
2 Aug 2013 - Hedge Clippings
Markets powered ahead in July, with risk taking a back seat once more as the US economy continued its recovery, aided by QE and the absence of any powerful negative forces. Fears that QE might end seemed to dissipate, or maybe investors began to get used to the fact that it must do so sooner or later.
Fresh highs on the S&P500 make a stark contrast to the performance of the Australian market which has been dogged by China and the resources perception, and more recently lower rates, both of which have accelerated the decline of the $A as offshore investors repatriated funds. Along with this local investors are increasingly looking to diversify offshore, possibly too little too late, but the experts seem to think the trend will continue for a while yet.
Three pieces of news this week related to the funds management industry: ASIC released Phase 2 of their review of financial advice industry practice, specifically covering the 21st to 50th largest financial services licensees. The 20 largest practices were covered under Report 251.
The new Treasurer, the Hon Chris Bowen released an exposure draft & explanatory memorandum on the proposed final element (stage 3) of the Investment Management Regime, or IMR which resulted from the Johnson report into Australia's standing as a financial services centre, completed in 2009. It still sounds complicated to me, particularly when the objective was to encourage offshore investors into Australia's financial services industry, which incidentally accounts for over 10% of GDP.
Finally the Treasurer also announced a planned five year freeze on major changes to Superannuation (excepting those recently announced) if re-elected. Legislative certainty is essential for investors' confidence, so maybe the taxation of both local investors in superannuation, and offshore investors in Australian managed funds should both be formalised by whichever party wins the upcoming election.
Some specific results received this week include the following Performance and News Updates:
BlackRock Multi Opportunity Fund recorded a return of 0.10% during June 2013 and an annual return of 9.02%. The Fund is notable for its low risk attributes with a sixty month Sharpe ratio of 1.02, annualised standard deviation of 4.45% and Sortino Ratio of 1.24.
The Intelligent Investor Value Fund returned -0.69% over June and 36.89% over the financial year. The Fund has an annualised return of 11.3% pa since inception (31 October 2009), more than double the 5.1% pa return of the All Ordinaries Index.
Monash Absolute Investment Fund was up 5.6% after fees in July, bringing the 12 month return to 23.4%. The portfolio continued to more than keep up with the broader market this month despite action taken to protect returns by: trimming some holdings; increasing cash, and; adding to the short positions.
Fund Reviews updated this week include:
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 value based 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.
The Aurora Fortitude Absolute Return Fund has an eight year track record and has consistently applied a low risk market neutral strategy focusing on ASX listed equities designed to provide investors with returns of 5% to 10% over cash, with low volatility and minimum drawdowns during varying market conditions. The overall strategy is Market Neutral, but the Manager uses five broad sub strategies with uncorrelated returns to build diversification into the portfolio. Over 87% of monthly performances have been positive, with no losing months in 2008 and a largest drawdown of -2.09%.
BlackRock Australian Equity Market Neutral Fund is managed by a 12 person Sydney based investment team following a systematic global research process investing in ASX listed stocks. The Fund's portfolio generally consists of approx. 180 stocks in equally weighted long and short portfolios to maximise potential returns while minimising market volatility. Blackrock's scientific approach is based on their philosophy that by blending highly qualified investment professionals (people skills) with the information, processing power and data collection capacity of powerful computer systems (quantitative) the result will be faster and better investment decisions and therefore outcomes.
For something completely different - getting it wrong: I'm sure we have all done this at some stage!
And for those not familiar with the dubious joys of NSW politics, this week saw the release of ICAC's findings and recommendations for the prosecution of former state Labour ministers Eddie "he who must be obeyed" Obeid, and Ian "Sir Lunchalot" Macdonald.
Not to be outdone, the current State Premier, liberal Barry O'Farrell gave his Finance Minister Greg Pearce his marching orders, admittedly for relatively insignificant misdemeanors. We have to take our hat off therefore to the editor of the Daily Telegraph for today's photo and accompanying headline.
On that note, I hope you have a happy and healthy weekend!
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
2 Aug 2013 - Monash Absolute Investment Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The Fund places a high priority on capital preservation, and have an absolute return focus in accepting market risk. The Manager employs a comprehensive approach to making investment decisions utilising value, growth and discounted cash flow styles. The portfolio is somewhat concentrated and the manager looks to diversify the portfolio across industries and themes rather than staying near an index. The portfolio may at times have a large amount of cash or other protection. |
| Manager Comments | The portfolio continued to more than keep up with the broader market this month despite action taken to protect returns by: trimming some holdings; increasing cash, and; adding to the short positions. Many of the Fund's stocks performed strongly this month, even though there were no noteworthy announcements. The main feature of the month was that about half of the long positions returned 10% or more and there were few detractors. |
| More Information | » View detailed profile of this fund |
1 Aug 2013 - Intelligent Investor Value Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | |
| Manager Comments | The most significant contributors to performance were Vision Eye Institute, GBST and QBE while Astro Japan and UXC detracted from performance. The Manager notes that there are more stocks that usual in the Value Fund currently. The Fund has been buying small amounts of a number of mining and mining services business as the investment market for these stocks has capitulated, particularly in the last few weeks of June. Liquidity has been a problem once the Fund started buying share prices have often quickly moved against it and the Fund has no intention of establishing large positions in any of these stocks. But with some trading at significant discounts to net cash or huge discounts to net tangible assets and, in one particular example, less than 1.5 times earnings, the Manager's view is that a basket of them could perform well even if the worst China fears are realised. The number of holdings should remain under 20, but the Fund could end up with quite a few stocks in this space. |
| More Information | » View detailed profile of this fund |
31 Jul 2013 - Fund Review: BlackRock Australian Equity Market Neutral Fund
BLACKROCK AUSTRALIAN EQUITY MARKET NEUTRAL FUND
Attached is our most recently updated Fund Review on the BlackRock Australian Equity Market Neutral Fund.
We would like to highlight the following aspects of the Fund:
-
BlackRock is the world's largest fund management group. Since being established in 1988 it has grown organically and by acquisition to manage US$3.93 trillion as of March 2013.
-
Operations cover 27 countries including Australia (where BlackRock has A$48.6 billion in FUM - March 2013) managing a broad range of strategies across a variety of asset classes.
-
The BlackRock Australian Equity Market Neutral Fund is managed by a 12 person Sydney based investment team following a systematic global research process investing in ASX listed stocks.
-
The Fund's portfolio generally consists of approx. 180 stocks in equally weighted long and short portfolios to maximise potential returns while minimising market volatility.
Research and Database Manager
Australian Fund Monitors
30 Jul 2013 - Fund Review: Aurora Fortitude Absolute Return Fund
- ASX listed Aurora Funds Limited established on the merger of three existing fund management businesses, managing approx. $480m on behalf of more than 2,500 retail and wholesale investors.
- The Aurora Fortitude Absolute Return Fund (AFARF) has a 8 year track record investing in ASX listed equities. CIO John Corr has over 20 years financial market experience with a strong focus on risk.
- 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.
- Strong use of low risk "long" derivatives and option overlays has provided positive returns with low volatility during periods of market dislocation.
- Over 87% of monthly performances have been positive, with no losing months in 2008 and a largest drawdown of -2.09%.
Research and Database Manager
Australian Fund Monitors
Fund Review: Aurora Fortitude Absolute Return Fund (pdf format)
