News
Fund Review: Bennelong Kardinia Absolute Return Fund July 2020
13 Aug 2020 - Australian Fund Monitors
The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund, which has been in operation for more than 10 years, has a long-biased, research driven, active equity long/short strategy and invests in...
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13 Aug 2020 - Fund Review: Bennelong Kardinia Absolute Return Fund July 2020
By: Australian Fund Monitors
AFM Fund Review - July 2020 (pdf format)
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.
- The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies.
- The Fund has significantly outperformed the ASX200 Accumulation Index since its inception in May 2006 and also has significantly lower risk KPIs. The Fund has an annualised return of 8.45% p.a. with a volatility of 7.18%, compared to the ASX200 Accumulation's return of 5.29% p.a. with a volatility of 14.40%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Kristiaan Rehder and Stuart Larke have significant market experience, while Bennelong Funds Management provide infrastructure, operational, compliance and distribution capabilities.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - July 2020 (pdf format)
Fund Review: Bennelong Long Short Equity Fund July 2020
10 Aug 2020 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available. The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index...
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10 Aug 2020 - Fund Review: Bennelong Long Short Equity Fund July 2020
By: Australian Fund Monitors
AFM Fund Review - July 2020 (pdf format)
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index, with over 16-years' track record and an annualised returns of 15.83%.
- The consistent returns across the investment history highlight the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 0.97 and 1.61 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - July 2020 (pdf format)
Performance Report: Bennelong Long Short Equity Fund
7 Aug 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund rose +4.82% in July, outperforming the ASX200 Accumulation Index by +4.32% and taking 12-month performance to +27.99% versus the Index's -9.87%. Since inception in February 2002, the Fund has returned...
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7 Aug 2020 - Performance Report: Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Fund Overview | In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. The Bennelong Market Neutral Fund, with same strategy and liquidity is available for retail investors as a Listed Investment Company (LIC) on the ASX. |
| Manager Comments | Returns in July were spread across a variety of sectors and the contribution of negative pairs was limited. Leading into reporting season the Fund gained from a number of favourable company updates. ALQ upgraded the outlook with its AGM update which resulted in ALQ/AZJ being the Fund's equal top pair. Long NWL/short AMP and IFL featured NWL confirming earnings guidance with their quarterly update, while AMP preannounced a very weak result with significant FUM outflow and weak financial results across all divisions. IFL also issued a profit warning with poor FUM flow. The Fund's bottom pair was TPG/TLS, giving back a little of last month's return following consummation of the TPG/Vodafone merger. Bennelong noted that, while share markets have recovered and equity volatility has declined, safe haven asset classes remain well bid. In particular, the point out that gold is now at a record level (up +30% CYTD). Their view is that for gold to be reaching new highs despite a lessening in risk aversion says something about other factors influencing its appeal beyond just protection during times of crisis. |
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Performance Report: Paragon Australian Long Short Fund
5 Aug 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +13% in July, outperforming the ASX200 Accumulation Index by +12.5% and taking 12-month performance to +19.41% against the Index's -9.87%. Since inception in March 2013, the Fund has returned...
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5 Aug 2020 - 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 Paragon Australian Long Short Fund rose +13% in July, outperforming the ASX200 Accumulation Index by +12.5% and taking 12-month performance to +19.41% against the Index's -9.87%. Since inception in March 2013, the Fund has returned +11.98% p.a. against the Index's annualised return over the same period of +6.43%. The Fund has a down-capture ratio for performance since inception of 68.7% which highlights its capacity to outperform in falling markets. Positive contributors during the month came from the Fund's gold and polymetallic holdings, with Adriatic the standout, offset by declines in Mesoblast and Telix. OceanaGold is currently the Fund's largest position, having entered at near recent lows. Paragon expect OceanaGold to soon be net cash, unhedged, with enviable self-funded organic growth. The Fund ended the month with 27 long positions and 5 short positions. Paragon believe unprecedented US fiscal and monetary stimulus, combined with ballooning US twin deficits, record government debt and a surging Fed balance sheet (not seen since the post-1940's war era) in time is likely to create an inflation problem. This is one of the factors mentioned in their latest report which they believe to be a key driver for gold. |
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Performance Report: Insync Global Quality Equity Fund
3 Aug 2020 - Australian Fund Monitors
The Insync Global Quality Equity Fund rose +11.76% over the quarter, outperforming AFM's Global Equity Index by +5.79% and taking 12-month performance to +14.45% against the Index's +3.94%. Since inception the Fund has returned +13.59%...
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3 Aug 2020 - Performance Report: Insync Global Quality Equity 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 typically of 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. |
| Manager Comments | Insync noted the key to the Fund's outperformance over FY20 has been its downside risk management as well as the selection of stocks with long growth runways that aren't closely linked to prevailing economic conditions. Insync maintains a positive view for the medium to long-term. Their view is that very low interest rates are making quality sustainable growth companies extremely valuable. They also believe the Megatrends in which they invest are likely to resist a severe recession and a pandemic. At month-end, the portfolio's top holdings included PayPal, Visa, Microsoft, Adobe, JD Sports Fashion, Walt Disney, Accenture, Facebook, S&P Global and Domino's Pizza. The top three Megatrends in the portfolio by weight were the 'Age Related Health Solutions' and 'Digitisation' megatrends (both at 14% of the portfolio), followed by the 'Cashless Society' megatrend (13% of the portfolio). |
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Performance Report: Touchstone Index Unaware Fund
31 Jul 2020 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +0.98% in June, taking quarterly performance to +16.50%. Since inception in April 2016, the Fund has returned +6.21% p.a. with an annualised volatility of 16.03%.
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31 Jul 2020 - Performance Report: Touchstone Index Unaware Fund
By: Australian Fund Monitors
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| Fund Overview | The portfolio is constructed using Touchstone's Quality-At-a-Reasonable-Price ('QARP') investment process. QARP is a fundamental bottom-up process, however, it also incorporates a top-down risk management framework designed to successfully manage the portfolio during varying market conditions and economic cycles. The Touchstone Fund is concentrated, typically holding between 15-20 stocks. No individual stock will ever make up more than 10% of the portfolio at any one time. The Investment Manager may temporarily exceed the exposure limits of the Fund occasionally, particularly during periods of market volatility, to allow for holdings in excess of this 10% limit where the increase in value of the underlying security is due to market movement. The Fund may also hold between 0-50% of the portfolio in cash. The Fund has a high level of associated risk, therefore, the minimum suggested investment time-frame is 5 years. |
| Manager Comments | At month-end, the Fund held 21 stocks with a median position size of 4.8%. The portfolio's holdings had an average forward year price/earnings of 21.2, forward-year tangible ROE of 10.2% and forward-year dividend yield of 2.7%. The Fund ended the month with a cash weighting of 5.1%, down from 10.5% as at the end of May. |
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Performance Report: Laureola Investment Fund
31 Jul 2020 - Australian Fund Monitors
The Laureola Investment Fund returned +0.69% in June, taking performance over FY20 to +9.55% and performance since inception in May 2013 to +16.74% p.a. with an annualised volatility of 5.75%. The largest drawdown the Fund has experience...
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31 Jul 2020 - Performance Report: Laureola Investment Fund
By: Australian Fund Monitors
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| Fund Overview | The investment strategy of The Laureola Investment Fund is dynamic and flexible, designed to take advantage of the frequent but temporary pricing anomalies of an asset class that is not yet fully understood by the majority of participants. Laureola Advisors applies 'best practices' common in the management of traditional assets, particularly the use of independent, in-house, proprietary research. |
| Manager Comments | Performance in June was driven by the maturities of 4 mid-sized life settlement policies with a combined face value of $1.5ml. The portfolio now holds 175 policies and is well diversified by all measures. 25% of policies are on insureds 80 years old or older, while the median Life Expectancy is only 49 months and 14% of the portfolio has Life Expectancies of 24 months or less. The largest number of insureds are in Florida and Texas, with Georgia and North Carolina also in the top 6. Laureola believe that in an unstable and uncertain world where governments try to control stock markets and yield curvs in the midst of pandemics, the self-generated returns and genuine non-correlation of Life Settlements are increasingly attractive. |
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Performance Report: Delft Partners Global High Conviction
31 Jul 2020 - Australian Fund Monitors
The Delft Global High Conviction Strategy rose +0.49% over the June quarter and as returned +14.46% p.a. with an annualised volatility of 11.81% since inception in August 2011. By contrast, AFM's Global Equity Index has returned +13.32%...
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31 Jul 2020 - Performance Report: Delft Partners Global High Conviction
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 | Delft noted their philosophy of not timing market exposure has helped them capture much of the market's recent rebound. They remain diversified with underweight positions in banks and oils, and overweight positions in 'true technology' companies such as KLA Tencor. Delft have a positive view of Japan and Asia which performed strongly in the market's rebound. During the quarter Delft sold Cisco and reinvested in Ciena Corp in the USA. They also sold Celanese Corp and reinvested in Bristol Myers. Notable price changes came from Hong Kong Exchange, KLA Tencor and General Mills. The Strategy remains unhedged for AUD$ based investors. |
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Performance Report: Ark Global Fund - Class B AUD Unhedged
31 Jul 2020 - Australian Fund Monitors
The Ark Global Fund (unhedged) rose +4.41% with a down-capture ratio of -53.38% over FY20. The negative down-capture ratio indicates that, on average, the Fund rose during the market's negative months. Since inception in July 2017, the...
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31 Jul 2020 - Performance Report: Ark Global Fund - Class B AUD Unhedged
By: Australian Fund Monitors
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| Fund Overview | The investment objective of the Fund is to achieve long-term capital appreciation with low correlation to global equity markets through investment in the Underlying Fund. Fund One is a global macro fund that utilises quantitative research including machine learning techniques and fully automated trading algorithms which will aim to generate positive uncorrelated returns relative to any significant equity benchmark. The traded instruments are either major FX pairs or the most liquid exchange traded stock index, bond, and commodity futures across North America, Europe and Asia Pacific. The algorithm backtests over 10 years of tick data and in order to do so effectively requires machine learning to filter noise and identify meaningful signals, which results in statistically significant prediction of price movements. In production this processing is done in real time and the portfolio reacts to asset movements by rebalancing automatically to the desired risk exposure through the market impact optimised execution logic. Risk management layers built into the algorithm have been developed using the experience the team has gained from their decades in highly liquid fast-moving markets in the proprietary High Frequency Trading world. This allows the system to trade autonomously but safely to all trading opportunities and potential system issues, and to alert the team to any behaviour outside of strictly controlled bounds. The Fund is a 'feeder fund' which indirectly gains exposure to the underlying assets by investing all or substantially all of its assets in the Underlying Fund. The Fund may retain a certain amount of cash from the investment in the Fund for the purpose of payment of costs, fees, hedging and expenses. |
| Manager Comments | The best performing assets for the month were: Gold (+1.49% of NAV), Nikkey 225 (+1.39% of NAV) and SMI Index (+0.81% of NAV). The worst performing assets for the month were: AUD/USD (-0.66% of NAV), USD/CAD (-0.84% of NAV) and Euro Stoxx (-1.63% of NAV). |
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Performance Report: Loftus Peak Global Disruption Fund
30 Jul 2020 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +2.65% in June, taking performance over FY20 to +27.67% versus AFM's Global Equity Index's +3.94%. Since inception in November 2016, the Fund has returned +23.47% p.a. against the Index's...
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30 Jul 2020 - Performance Report: Loftus Peak Global Disruption Fund
By: Australian Fund Monitors
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| Fund Overview | The investment process involves a combination of top-down analysis with fundamental bottom-up qualitative and quantitative research to derive a risk-adjusted discounted cash flow (DCF) valuation of companies in the target universe. The investment team will generally buy stocks from the pool of securities that are trading below Loftus Peaks' valuation and sell them when they are trading above Loftus Peak's valuation. The approach allows for both fundamental accounting information as well as market-oriented inputs to be factored into the portfolio construction process. Loftus Peak's model typically does not rely on leverage to deliver investment returns and specifically takes into account risk in the valuation process. Capital preservation can be managed by holding up to 50% cash. Index and currency options and futures may also be used to manage risk. |
| Manager Comments | The June return was driven by solid contributions from Qualcomm, Apple and Tencent. Key detractors included Nutanix, Arista and Alphabet. The Australian dollar appreciated +3.7% over the month against the US dollar which meant the value of the Fund's US dollar positions decreased. As at 30 June 2020, the Fund carried a foreign currency exposure of 98%. At month-end, the Fund was 77.8% invested in 24 holdings with the balance in cash. |
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