News
Performance Report: Paragon Australian Long Short Fund
30 Apr 2021 - Australian Fund Monitors
The Paragon Australian Long/Short Fund rose +6.43% over the quarter, outperforming the ASX200 Accumulation Index by +2.17% and taking 12-month performance to +89.83% vs the Index's +37.47. Since inception in March 2013, the Fund has...
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30 Apr 2021 - Performance Report: Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market. |
| Manager Comments | The Fund's down-capture ratio (since inception) of 74.72% indicates that, on average, the Fund has outperformed during the market's negative months. The Fund returned -6.2% in March. Paragon noted that whilst the major indices continued to rise there was unprecedented turbulence below the surface. Positive contributors for the Fund were Cettire, Betmakers and Chalice, offset by declines in Ionic, Adriatic and other Resources holdings. The Fund ended the month with 32 long positions and 6 short positions. |
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Performance Report: NWQ Fiduciary Fund
30 Apr 2021 - Australian Fund Monitors
The NWQ Fiduciary Fund has risen +14.12% over the past 12 months with a volatility of 5.98%. Since inception in May 2013, the Fund has returned +5.58% p.a. with an annualised volatility of 5.70%.
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30 Apr 2021 - Performance Report: NWQ Fiduciary Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund aims to produce returns after management fees and expenses of RBA Cash Rate + 4.0-5.0% p.a. over rolling five-year periods. Furthermore, the Fund aims to achieve these returns with volatility that is a fraction of the Australian equity market, in order to smooth returns for investors. |
| Manager Comments | The Fund's largest drawdown since inception of -8.77% vs the Index's -26.75%, in conjunction with its down-capture ratio (since inception) of 13.25%, demonstrates its ability to protect investors' capital when markets fall. The Fund has achieved a down-capture ratio over the past 12 months of -8.5% which indicates that, on average, the Fund rose during the market's negative months. The Fund underperformed in March as the short portfolio outperformed the long portfolio. NWQ noted this was largely due to the rotation in the market from defensive/growth companies (typically favoured for long portfolio) and into value/cyclical companies (typically favoured for short portfolio). The Fund continues to be a portfolio diversifier and an alternative to the traditional balanced fund for investors concerned about current equity and bond market valuations. |
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Performance Report: Bennelong Emerging Companies Fund
30 Apr 2021 - Australian Fund Monitors
The Bennelong Emerging Companies Fund has risen +105.99% over the past 12 months vs the ASX200 Accumulation Index's +37.47%. Since inception in November 2017, the Fund has returned +29.45% p.a. vs the Index's +8.26%.
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30 Apr 2021 - Performance Report: Bennelong Emerging Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may invest in securities expected to be listed on the ASX within 12 months. The Fund may also invest in securities listed, or expected to be listed, on other exchanged where such securities relate to ASX-listed securities. |
| Manager Comments | Bennelong continue to seek to invest in high quality companies that they believe have solid growth prospects over the foreseeable future. They note that, despite the market's inevitable short-term volatility, they believe the portfolio's investments are all incrementally building value which they expect will underpin strong outperformance over the long-term. The portfolio remains diversified across setor and risk-return drivers. |
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Performance Report: Laureola Australia Feeder Fund
29 Apr 2021 - Australian Fund Monitors
The Laureola Master Fund rose +0.09% in March, taking 12-month performance to +8.57% with a volatility of 2.14%. Since inception in May 2013, the Fund has returned +15.88% p.a. with an annualised volatility of 5.56%.
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29 Apr 2021 - Performance Report: Laureola Australia Feeder Fund
By: Australian Fund Monitors
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| Fund Overview | Life Settlements are resold life insurance policies and can be thought of as a form of finance extended to an individual backed by the person's life insurance policy. This financing is repaid upon maturity by collecting the death benefit from the insurance company. Risk mitigation measures implemented by Laureola include science-driven due diligence of policies, active monitoring of insured through a vertically integrated operation, and investor aligned fund design. |
| Manager Comments | The AUD hedged feeder fund was flat in March. CYTD, it has risen +0.1%. The Fund's largest drawdown since inception of -4.90% vs the Index's -19.60%, in conjunction with its down-capture (since inception) ratio of -37.45%, demonstrates its capacity to significantly outperform in falling markets and emphasises the Fund's non-correlated nature. During the month, Life Settlement markets were relatively stable with transaction prices averaging in the 12% to 14% IRR range (gross, projected IRR) and the usual wide dispersion around this average. One small policy matured and 4 polices were added to the portfolio. The portfolio now has 188 policies with an average face of $710k. 37% of the policies have a Life Expectancy of 48 months or less. Maturities have been below expectation in Q1 but Laureola expect them to pick up for the rest of 2021. Laureola noted the impact of Covid 19 on the Life Settlement markets has been twofold: 1) increased mortality and 2) decreased supply of policies. They added that there is no exact measurement of the deaths caused by Covid but most reputable estimates centre around the 10% mark - i.e. there were 10% more deaths in 2020 than expected. Laureola believe Covid's effect is likely to decline in 2021 due to better treatment and the Vaccine rollout. 25% of Americans are fully vaccinated as of 17 April, the CDC estimates that it will be 50% by June 6 and 85% by August 15. |
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Performance Report: Longlead Pan-Asian Absolute Return Fund
29 Apr 2021 - Australian Fund Monitors
The Longlead Pan-Asian Absolute Return Fund rose +4% over the March quarter which was in line with AFM's Asia Pacific Index.
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29 Apr 2021 - Performance Report: Longlead Pan-Asian Absolute Return Fund
By: Australian Fund Monitors
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| Manager Comments | Longlead noted the market backdrop was a generally favourable one for much of the quarter, with an economic recovery following the pandemic, supported by ongoing stimulus from governments globally, providing a good environment for stock picking. However, they added that the picture was far from uniform, with markets such as China and Hong Kong experiencing a material pullback from the middle of the quarter in response to concerns over domestic policy normalisation and a rotation in market leadership from growth to value names, particularly in March. Gains in the long book in the quarter were partially offset by losses in the short book. Positions in the Communications Services, Health Care and Consumer Staples sectors posted gains, while losses were experienced in Information Technology and the hedge book. By country, the Fund saw positive performance in Singapore, Taiwan and Hong Kong, and negative performance in the United States and Japan. |
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Performance Report: Insync Global Capital Aware Fund
29 Apr 2021 - Australian Fund Monitors
The Insync Global Capital Aware Fund rose +2.39% in March, taking 12-month performance to +18.64%. Since inception in October 2009, the Fund has risen +11.57% p.a. with an annualised volatility of 9.87%.
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29 Apr 2021 - Performance Report: Insync Global Capital Aware Fund
By: Australian Fund Monitors
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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio of typically 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
| Manager Comments | The portfolio's top 10 holdings at month-end included PayPal, Walt Disney, Nintendo, S&P Global, Domino's Pizza, Dollar General, Facebook, Visa, Qualcomm and Microsoft. Relative to the MSCI, the portfolio was significantly overweight IT and underweight Industrials. The 'Contactless Economy' and 'Workplace Automation' megatrends had the greatest weighting in the portfolio. Insync noted continued strong performance of cyclical stocks propelled the MSCI benchmark further ahead of the funds overall in March. They continue to see no compelling reason to alter course as this typical and short-lived phenomenon is consistent with past economic periods when coming out of a recession; overly optimistic price outcomes that result drive these types of stocks far higher than others. They point specifically to 2009/10 emerging from the GFC and 2016/17 when Trump was elected with heightened expectations of economic growth. |
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Performance Report: Quay Global Real Estate Fund
28 Apr 2021 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +1.92% in March, taking 12-month performance to +9.04%. Since inception in January 2016, the Fund has returned +7.04% p.a. with an annualised volatility of 11.68%.
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28 Apr 2021 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | Winners from February were a drag in March, including Hysan (Hong Kong diversified), Scentre Group (Australian retail) and Wharf REIC (Hong Kong retail). Not quite offsetting this was Quay's exposure to US residential including Equity Residential, American Homes, and Essex. Quay noted the month was characterised as a tug-of-war between the so called 're-open trade' and 'COVID trade'. They added that while this can be interesting to watch, their focus remains on the long term cashflows and prospects of their investees. There were no changes in the Fund during the month, Quay remain positive in the Fund's outlook and they believe it is well positioned to achieve its medium-term investment target of CPI + 5%. |
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Performance Report: Glenmore Australian Equities Fund
28 Apr 2021 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +1.34% in March, taking 12-month performance to +72.43% vs the ASX200 Accumulation Index's +37.47%. Since inception in June 2017, the Fund has risen +20.90% p.a. vs the Index's +8.68%.
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28 Apr 2021 - Performance Report: Glenmore Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | The Fund's Sharpe and Sortino ratios (since inception), 0.92 and 1.09 respectively, by contrast with the Index's Sharpe of 0.55 and Sortino of 0.60, highlight its capacity to produce superior risk-adjusted returns while avoiding the market's downside volatility. The Fund has achieved and up-capture ratio (since inception) of 197%, indicating that, on average, it has risen almost twice as much as the market during the market's positive months. Top contributors in March included People Infrastructure, Whitehaven Coal, Moelis Australia, Fiducian Group, Collins Foods and Eagers Automotive. Key detractors included Coronado Global Resources and Alliance Aviation Services. Glenmore noted that, overall, they are very positive on the prospects for equities generally and the portfolio's holdings more specifically. They added that the recent reporting season highlighted a number of interesting stocks across a range of sectors and with a positive backdrop (recovering global growth, low interest rates, increased rollout of the vaccine). Their outlook on the next 12-18 months remains positive. |
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Performance Report: Delft Partners Global High Conviction Strategy
28 Apr 2021 - Australian Fund Monitors
The Delft Global High Conviction Strategy rose +9.22% in March, outperforming AFM's Global Equity Index by +5.06 and taking 12-month performance to +28.75% vs the Index's +24.91%. Since inception in August 2011, the Strategy has returned...
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28 Apr 2021 - Performance Report: Delft Partners Global High Conviction Strategy
By: Australian Fund Monitors
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| Fund Overview | The quantitative model is proprietary and designed in-house. The critical elements are Valuation, Momentum, and Quality (VMQ) and every stock in the global universe is scored and ranked. Verification of the quant model scores is then cross checked by fundamental analysis in which a company's Accounting policies, Governance, and Strategic positioning is evaluated. The manager believes strategy is suited to investors seeking returns from investing in global companies, diversification away from Australia and a risk aware approach to global investing. It should be noted that this is a strategy in an IMA format and is not offered as a fund. An IMA solution can be a more cost and tax effective solution, for clients who wish to own fewer stocks in a long only strategy. |
| Manager Comments | Over the quarter, the Strategy rose +17.71% against the Index's +5.90%. Notable performers included KLA, a US metrology equipment manufacturer, Valero, the USA based oil refining company, and Intel. Most Japanese companies in the portfolio marched higher. They took profits from Discovery A, Hong Kong Exchanges, Orix Holdings and Nomura Holdings. Delft noted that while world markets rose over that period, there has been a significant shift in the shape of the US yield curve which has driven significant sectoral rotation globally. Delft anticipated this and remain focussed on companies exposed to industrial activity, productivity enhancing investment and the switch to fiscal policy. Delft added that National Industrial Policy is returning and expect companies and investors will have to adapt to the new supply chains, different regulations and taxation. Delft remain very diversified with underweight positions in European banks and oils generally. They have overweight positions in 'true technology' companies, Industrials and Healthcare. They like Japan and Asia on valuation, fiscal resilience and improving governance. Their view is that the outlook remains poor for European profits notwithstanding the 'cheap' market. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
28 Apr 2021 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +0.83% in March, taking 12-month performance to +50.92% vs the ASX200 Accumulation Index's +37.47%. Since inception in February 2009, the Fund has returned +16.65% p.a. vs the Index's +10.16%.
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28 Apr 2021 - Performance Report: Bennelong Concentrated Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The overriding objective of the Concentrated Australian Equities Fund is to seek investment opportunities which are under-appreciated and have the potential to deliver positive earnings, while satisfying our stringent quality criteria. Bennelong's investment process combines bottom-up fundamental analysis together with proprietary investment tools which are used to build and maintain high quality portfolios that are risk aware. The portfolio typically consists of 20-35 high-conviction stocks from the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to ASX-listed securities. Derivative instruments are mainly used to replicate underlying positions and hedge market and company specific risks. |
| Manager Comments | The Fund's up-capture and down-capture ratios (since inception), 149% and 92% respectively, indicate that, on average, the Fund has outperformed significantly during the market's positive months while not falling further than the market during the market's negative months. As at the end of March, the portfolio's weightings had been increased in the Health Care, Communication, Materials section, and decreased in the Discretionary, IT, Industrials and Financials sectors. Relative to the ASX300, the Fund was significantly overweight the Discretionary sector (Fund weight: 43.7%, benchmark weight: 8.0%) and underweight the Financials sector (Fund weight: 6.6%, benchmark weight: 29.3%). |
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