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Performance Report: Glenmore Australian Equities Fund
19 May 2020 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +16.63% in April, outperforming the ASX200 Accumulation Index by +7.85% and taking annualised performance since inception in June 2017 to +12.24% versus the Index's +2.96%.
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19 May 2020 - 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 | Glenmore noted the common theme in April across the vast majority of stocks in the Fund was a recovery from oversold positions at the end of March. While COVID-19 will clearly have had a very significant economic impact, Glenmore believe there are some early signs the business world can navigate this crisis. Following the bounce in stocks in April, the manager now sees earnings risks as more appropriately priced into stocks. Positive contributors in April included People Infrastructure, Dicker Data, Pinnacle Investment Management, Magellan Financial Group, NRW Holdings, Arena REIT, Integral Diagnostics and Charter Hall Social Infrastructure. There were no detractors of any materiality in the month. |
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Performance Report: Loftus Peak Global Disruption Fund
19 May 2020 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +7.00% in April, outperforming AFM's Global Equity Index by +2.85% and taking annualised performance since inception in November 2016 to +22.73% versus the Index's +12.25%.
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19 May 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 | In their latest report, Loftus Peak highlight the acceleration of the move towards digitisation seen over the past three months as a result of the COVID-19 pandemic. They noted that, while this has been in train for twenty years, the virus has forced significant additional adoption of digital tools to facilitate work, banking, shopping and entertainment. They expect a good number of these practices to stick post-pandemic. This in turn has driven very strong growth in revenues for a number of Loftus Peak's well-placed investee companies. Top contributors in April included Roku, Amazon and Qualcomm. Key detractors included BlackBerry, Alibaba and Baidu. The Australian dollar appreciated +7.0% over the month against the US dollar which decreased the value of the Fund's US dollar positions. As at 30 April 2020, the Fund carried a foreign currency exposure of 95%. The Fund ended the month 91% invested in 24 holdings with the balance in cash. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
18 May 2020 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +12.04% in April, outperforming the ASX200 Accumulation Index by +3.26%. Since inception in February 2009, the Fund has returned +15.03% p.a. versus the Index's +8.74%.
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18 May 2020 - 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 | As at the end of April, the portfolio's weightings had been increased in the Discretionary, Materials, Industrials, REIT's and Financials sectors, and decreased in the Health Care and Consumer Staples sectors. The Fund's aim is to invest in a concentrated portfolio of high quality companies with strong growth outlooks, underestimated earnings momentum and underestimated prospects. By comparison with the Fund's benchmark (ASX300 Accumulation Index), the portfolio's holdings, on average, have a higher return on equity, lower debt/equity, higher sales growth, higher EPS growth, higher price/earnings and lower dividend yield which collectively indicate that the Fund is in line with its investment objectives. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
14 May 2020 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +0.63% in April, with the portfolio lagging the market due to a conservative net long position. The Fund has returned +8.58% p.a. with an annualised volatility of 7.20% since inception in...
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14 May 2020 - Performance Report: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. Detailed analysis of company valuations using financial statements and forecasts, particularly focusing on free cash flow, is conducted. Technical analysis is used to validate the Manager's fundamental research and valuations and to manage market timing. A significant portion of the Fund's overall performance can be attributed to the attention and importance given to the macro economic outlook and the ability and willingness to adjust the Fund's market risk. |
| Manager Comments | Top contributors in April included JB Hi-Fi, Polynovo, Fortescue, BHP and Macquarie. Key detractors included Fisher & Paykel, Scentre, ARB Corp and Bingo. The Fund's Short Book detracted -335 basis points from performance. The Fund's net equity market exposure was increased from 28.4% to 43.3% (45.8% long and 2.5% short), with the key changes being the addition of 13 new long positions including Santos, Pointsbet, Seek, Nanosonic and Altium, and the closure of several individual stock shorts and Kardinia's short position in Share Price Index futures. The Fund's net market exposure has average 40% since inception. Kardinia noted they are close to that level given their cautious view on the direction of the market over the next 12 months. Their view is that, for now, liquidity is overwhelming earnings. |
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Performance Report: Cyan C3G Fund
13 May 2020 - Australian Fund Monitors
The Cyan C3G Fund rose +9.00% in April, taking annualised performance since inception in August 2014 to +11.53% versus the ASX200 Accumulation Index's +4.13%. Cyan expect the current volatility to continue for the foreseeable future as...
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13 May 2020 - Performance Report: Cyan C3G Fund
By: Australian Fund Monitors
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | The Fund was particularly active in February and March as the spread and impact of the virus emerged. During that period Cyan repositioned the portfolio to both avoid significant losses and take advantage of the buying opportunity. Top performers in April included Vita Group, Carbonxt Group, Raiz, Quickfee and Jumbo Interactive. Only 3 positions delivered a minor negative return with none of them being material detractors to performance. Cyan believe the fund is well diversified and exposed to fundamentally strong businesses that offer material upside over time. |
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Performance Report: Bennelong Long Short Equity Fund
12 May 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund rose +1.27% in April, taking 12-month performance to +25.55% versus the ASX200 Accumulation Index's -9.06%. Since inception in February 2002, the Fund has returned +15.49% p.a. versus the Index's +7.14%.
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12 May 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 | Contribution from the top and bottom pairs was equal with overall positive performance an outcome of two thirds of portfolio pairs being profitable. The Fund's top pair was long WOW / short MTS, TWE. Metcash was the key contributor following a capital raising and a somewhat soft trading update. Long ORG / short AGL bounced following a weak prior month for the pair which reflected Origin's oil exposure through APLNG. The weakest pair was long MQG / short BEN, APT. Macquarie bounced along with the market but was more than offset by Afterpay which released a trading update which indicated that thus far they have not been negatively impacted by the current environment. Long LNK / short CPU was the next worst pair. Computershare downgraded guidance again, however, this time the outcome was no as weak as feared, and the stock bounced following an extended period of weakness. |
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Performance Report: Surrey Australian Equities Fund
7 May 2020 - Australian Fund Monitors
The Surrey Australian Equities Fund rose +16.9% in April, outperforming the ASX200 Accumulation Index by +8.12% as many of the Fund's companies recovered from the oversold levels seen during March.
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7 May 2020 - Performance Report: Surrey Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Investment Manager follows a defined investment process which is underpinned by detailed bottom up fundamental analysis, overlayed with sectoral and macroeconomic research. This is combined with an extensive company visitation program where we endeavour to meet with company management and with other stakeholders such as suppliers, customers and industry bodies to improve our information set. Surrey Asset Management defines its investment process as Qualitative, Quantitative and Value Latencies (QQV). In essence, the Investment Manager thoroughly researches an investment's qualitative and quantitative characteristics in an attempt to find value latencies not yet reflected in the share price and then clearly defines a roadmap to realisation of those latencies. Developing this roadmap is a key step in the investment process. By articulating a clear pathway as to how and when an investment can realise what the Investment Manager sees as latent value, defines the investment proposition and lessens the impact of cognitive dissonance. This is undertaken with a philosophical underpinning of fact-based investing, transparency, authenticity and accountability. |
| Manager Comments | During the month Surrey were in active contact with in excess of 70 companies as they updated their existing holdings, searched for new ideas and analysed how various industries were tracking. The Fund's top holdings as at the end of April included Appen (APX), Omni Bridgeway (OBL), Opticom (OPC), Saracen Minerals (SAR) and Xero Limited (XRO). By sector, the Fund was most heavily weighted towards the Industrials and IT sectors. The Fund holdings remain in high quality companies with strong balance sheets and solid outlooks that Surrey believe will continue to outperform over time. |
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Performance Report: Ark Global Fund - Class B AUD Unhedged
1 May 2020 - Australian Fund Monitors
The Ark Global Fund (unhedged) rose +11.45% in March, outperforming AFM's Global Equity Index by +19.52% and taking annualised performance since inception to +18.45% versus the Index's +8.92%.
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1 May 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: 10 year Canadian Government bond futures (+3.17% of NAV), TOPIX futures (+2.34% of NAV), and E-mini Russell 2000 futures (+2.16% of NAV). The worst performing assets were: E-mini NASDAQ 100 future (-1.22% of NAV), Euro Stoxx 50 future (-4.07% of NAV) and ASX200 Index future (-4.97% of NAV). |
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Performance Report: Wheelhouse Global Equity Income Fund
30 Apr 2020 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund outperformed AFM's Global Equity Index by +7.48% in March, returning -0.59%. Over the quarter the Fund rose +2.17%, outperforming the Index by +12.13%. Since inception in May 2017, the Fund has...
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30 Apr 2020 - Performance Report: Wheelhouse Global Equity Income Fund
By: Australian Fund Monitors
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| Fund Overview | To pursue this objective, the Investment Manager is responsible for actively managing, monitoring and tailoring the integration of derivative contracts alongside the Morningstar Portfolio, while taking into account changing market and stock specific conditions. The Investment Manager is responsible for maximising the structural benefits of short option positions (lowered Volatility, improved capital preservation, higher income generation), whilst mitigating, minimising and monitoring the structural negatives (variable market exposure, option expiries, collateral management and asymmetric return profiles). In addition, long derivatives positions are also used to enhance the capital preservation characteristics of the Fund in more extreme market movements. As a consequence of the integration of Derivatives, returns of the strategy, intra-cycle, are expected to vary from the underlying Morningstar Portfolio due to these characteristics. For example in weak markets, or in extended sideways markets, the Fund is expected to outperform relative to the Morningstar Portfolio. Conversely in strong positive markets the Fund is expected to underperform. |
| Manager Comments | The March return comprised -5.64% from the portfolio (in USD), and +5.05% from the weakening of the Australian dollar versus the US dollar. Top contributors included Kao Corp, Veeva Systems, Novo Nordisk, Roche and Reckitt Benckiser. Key detractors included Guidewire Software, United Technologies, Microchip Technology, Zimmer Biornet and Enbridge. |
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Performance Report: Delft Partners Global High Conviction
29 Apr 2020 - Australian Fund Monitors
The Delft Global High Conviction strategy outperformed AFM's Global Equity Index by +0.88% in March. Since inception in July 2011, the strategy has returned +14.85% p.a. versus the Index's annualised return of +12.97% over the same period.
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29 Apr 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 companies and analysts currently have no idea about the near-term outlook for earnings. Delft's view is that they are going to be down or evaporate. They were defensively positioned into this but have seen significant declines in some equities they liked. Notable contributors over the quarter included Gilead, General Mills, Verizon, NTT. Key detractors included AXA, Barratt Developments, Celanese Corp. They remain unhedged for AUD based investors. |
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