News
Performance Report: Gyrostat Absolute Return Income Equity Fund
30 Jan 2020 - Australian Fund Monitors
The Gyrostat Absolute Return Income Fund rose +0.80% in December, taking 12-month performance to +4.50% versus the RBA Cash Rate's +1.50%.
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30 Jan 2020 - Performance Report: Gyrostat Absolute Return Income Equity Fund
By: Australian Fund Monitors
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| Fund Overview | The investment objective is to deliver regular and stable income stream (from ASX20 dividends) in a low interest rate environment with capital security - an 'alternative - defensive' asset class. Gyrostat has for 34 consecutive quarters operated within a 'hard' defined risk parameter (no more than 3% capital at risk with our maximum draw-down 2.2% in any circumstances) always in place, delivered regular income at a minimum BBSW90 + 3% by passing through ASX-20 dividends, and met returns guidance based upon market conditions (demonstrating increasing returns with market volatility). The fund buys and holds ASX-20 shares with lowest cost protection always in place with upside. It is an 'alternative - defensive' conservative asset allocation. Advances in investment risk management enable cost-effective protection to always be in place for a 'hard' defined risk parameter (say no more than 3% capital at risk). Returns are designed to increase as volatility levels increase, as this provides more opportunities to lower protection costs. Investment Objectives: - Returns: 6% - 8% pa in trending markets, greater than 8% pa in volatile markets, BBSW90 + 3% in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.2% p.a.) from dividends and franking credits - Protection: No quarterly NAV draw-downs exceeding 3% Also includes a 'tail hedge' for gains on large market falls |
| Manager Comments | The Fund is a solution for falling interest rates. It has a 'conservative' asset allocation and operates with a 'hard' defined risk parameter (no quarterly NAV drawdowns exceeding 3%), delivered regular equity income (by passing through ASX20 dividends), and has provided superior returns during periods of heightened market volatility due to the Fund's tail hedge on large gains for large market falls. Gyrostat noted they anticipate increasing levels of 'late cycle' market volatility with geopolitical tensions elevated, historically high debt levels and elevated valuations. |
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Performance Report: Wheelhouse Global Equity Income Fund
30 Jan 2020 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund rose +14.69% over 2019, taking annualised performance since inception in May 2017 to +8.78% per annum with an annualised volatility of 7.52%.
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30 Jan 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 Fund returned -2.25% in December. The return comprised a return of +1.57% from the portfolio (in USD) and a negative return of -3.82% from the strengthening of the Australian dollar versus the US dollar. Income distributions were 1.5c for the December quarter, taking the rolling 12-month income return to +8.49%. Over 2019 the Fund's return (+14.69%) came mostly from income generation. Wheelhouse noted that due to the capped but more certain nature of the Fund's income generation program the Fund's 2019 return is in line with their expectations of relative underperformance in strong markets and more stable and predictable returns throughout the whole cycle. |
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Fund Review: Bennelong Twenty20 Australian Equities Fund December 2019
29 Jan 2020 - Australian Fund Monitors
The latest Fund Review on Bennelong Twenty20 Australian Equities Fund is now available. The Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of ex-20 stocks.
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29 Jan 2020 - Fund Review: Bennelong Twenty20 Australian Equities Fund December 2019
By: Australian Fund Monitors
AFM Fund Review - December 2019 (pdf format)
BENNELONG TWENTY20 AUSTRALIAN EQUITIES FUND
Attached is our most recently updated Fund Review on the Bennelong Twenty20 Australian Equities Fund.
- The Bennelong Twenty20 Australian Equities Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of stocks outside the Top 20. Construction of the ex-top 20 portfolio is fundamental, bottom-up, core investment style, biased to quality stocks, with a structured risk management approach.
- Mark East, the Fund's Chief Investment Officer, and Keith Kwang, Director of Quantitative Research have over 50 years combined market experience. Bennelong Funds Management (BFM) provides the investment manager, Bennelong Australian Equity Partners (BAEP) with infrastructure, operational, compliance and distribution services.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - December 2019 (pdf format)
Performance Report: Quay Global Real Estate Fund
29 Jan 2020 - Australian Fund Monitors
The Quay Global Real Estate Fund returned +23.82% over 2019, driven almost entirely by underlying stock performance and exceeding Quay's investment objective of CPI +5%. Since inception in January 2016, the Fund has returned +10.58% per annum.
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29 Jan 2020 - 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 | The Fund returned -3.2% in December, impacted by a -2.8% headwind from currency. The AUD appreciated against all of the Fund's foreign currency holdings during the month. Top performers included Big Yellow Group and Safestore Holdings, two UK storage investees which benefited from the 'Boris Bounce'. Wharf REIC (HK Retail) also performed well as Hong Kong saw a relatively calm month on the protest front. Bottom performers included Sun Communities (US Manufactured Housing) and Store Capital (US Triple Net). Quay noted both investees had a strong 2019 (+50% and +35% price appreciation respectively) and believe profit taking contributed to their performance in December. The Fund's Residential investees also performed relatively poorly during the month as new home sales trend upwards. Quay believe the portfolio is well placed to take advantage of the significant demographic tailwinds they expect over the first half of this decade (Healthcare, Affordable Housing), and should hold up well in the event of an unforeseen economic disruption given its defensive positioning. |
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Performance Report: Loftus Peak Global Disruption Fund
29 Jan 2020 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund outperformed AFM's Global Equity Benchmark by +5.87% over the December quarter and by +8.03% over CY2019. Since inception in November 2016, the Fund has returned +21.95% p.a. versus the Index's +15.96%.
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29 Jan 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 Fund's holdings were strong in December, however an adverse movement in the currency impacted performance by -3.5%, leaving the Fund flat for the month. Loftus Peak noted rhetoric around trade wars softened from both sides, with China pure-play stocks such as Tencent and Alibaba rebounding and companies with exposure to China (Qualcomm, Tesla) also recording good returns. The manager's decision to deploy cash in October on weakness in key names was beneficial. Top contributors over the month included Tencent, Apple and Tesla. Key detractors included Vmware, Nutanix and Roku. The fund was 95% invested in 22 holdings with the balance in cash at month-end. |
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Performance Report: Insync Global Quality Equity Fund
29 Jan 2020 - Australian Fund Monitors
The Insync Global Quality Equity Fund returned +37.24% over CY2019, outperforming AFM's Global Equity Benchmark by +10.05% and taking annualised performance since inception in October 2009 to +13.74% versus the Index's +11.63%.
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29 Jan 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 | The Fund fell in line with the market in December, returning -0.35%. Positive contributors included London Stock Exchange, Bristol-Myers Squibb, Booking Holdings and Apple. Detractors included Walt Disney, Intuit, PayPal and Facebook. The Fund continues to have no currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. |
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Performance Report: Bennelong Emerging Companies Fund
28 Jan 2020 - Australian Fund Monitors
The Bennelong Emerging Companies Fund returned +86.64% after fees over CY2019, outperforming the ASX200 Accumulation Index by +66.24% and taking annualised performance since inception in November 2017 to +36.43% versus the Index's +10.47%.
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28 Jan 2020 - 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 | The Bennelong Emerging Companies Fund returned +86.64% after fees over CY2019, outperforming the ASX200 Accumulation Index by +66.24% and taking annualised performance since inception in November 2017 to +36.43% versus the Index's +10.47%. As is expected of a fund investing in micro and small caps, these returns have been achieved with significantly higher volatility than the market. Over the December quarter the Fund returned +2.87% versus the Index's +0.68%. The largest contributors to quarterly performance were Viva Leisure and BWX, while the biggest detractor was Prospa. They discussed these stocks in some detail in their September quarterly report. Bennelong noted that, while performance through the year was very strong, they continue to find select opportunities among emerging companies that they believe should position the fund for decent returns over time. They also emphasise that investors should not expect future returns to be as good as they were in 2019. |
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Performance Report: Surrey Australian Equities Fund
28 Jan 2020 - Australian Fund Monitors
The Surrey Australian Equities Fund fell in line with the market in December, returning -2.90%. Over CY2019 the Fund rose +19.54% with a volatility of 12.04%.
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28 Jan 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 | The Fund's cash weighting totalled 11% at month-end with 29 individual stock holdings. The top holdings included Bravura Solutions, Cooper Energy, Corporate Travel, IMF Group and Xero Limited. From a macro/global perspective, Surrey noted two features that have emerged include an increasing shift toward gold and the rise in the oil price, both of which are correlated to increasing tensions in the middle-east. Surrey believe the Fund is well positioned for this uncertainty and the Fund's gold and energy weightings increasing materially at the start of January. |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
24 Jan 2020 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund has returned +8.01% p.a. with an annualised volatility of 6.74% since inception in July 2013. In December the Fund returned -0.94% versus the ASX200 Accumulation Index's -2.17%.
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24 Jan 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Harvest Lane Asset Management employs a conservative, highly selective and opportunistic approach. Using their extensive knowledge in the area of corporate actions, the Fund's managers assess each opportunity based on a thoughtful, diligent and disciplined process and invest where they believe an opportunity exists to generate above average investment returns relative to the risk incurred. Investment decisions are made without speculating on market direction, with rigid risk controls enforced to minimise the risk of large losses of investor capital. The Fund invests in securities that are predominantly listed on the ASX and occasionally in those listed in other developed markets. Equity swaps and other derivatives may be used at times to reduce risk. The fund typically holds high levels of cash in the absence of sufficiently attractive opportunities to deploy investor capital in accordance with its objectives. |
| Manager Comments | Harvest Lane noted that, aside from a partial deal break in Panoramic Resources after Independence Group withdrew its bid, the remaining softness in December was predominantly a result of widening spreads rather than fundamental catalysts. Consequently, should the Fund's current positions see their respective transactions complete then Harvest Lane expect a substantial portion of the underperformance to be recouped in time. Harvest Lane saw a steady stream of deals announced to market throughout the month, giving them the opportunity to add several new positions to the portfolio. Transactions in Konekt Limited and Bellamy's Australia closed towards the end of the month, carrying with them a healthy dose of franking credits which are in addition to the Fund's reported performance. Harvest Lane are encouraged by the current positions in the portfolio and believe 2020 offers a favourable outlook for merger and acquisition activity. |
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Performance Report: Glenmore Australian Equities Fund
24 Jan 2020 - Australian Fund Monitors
The Glenmore Australian Equities Fund returned +40.29% over CY2019 versus the ASX200 Accumulation Index's +23.40%. Since inception in June 2017, the Fund has returned +26.11% p.a. versus the Index's +10.74%.
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24 Jan 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 | The Fund returned -1.67% in December, outperforming the Index by +0.5%. Top contributors included Moelis Australia (+10.2%), Polynovo (+10.1%), Magellan Financial Group (+8.5%), NRW Holdings and Stanmore Coal. Key detractors included Jumbo Interactive (-27.3%), Phoslock Environmental Technologies (-10.1%), VGI Partners (-8.8%) and Opticomm (-7.0%). Glenmore noted there were no company announcements from VGI or OPC during the month, however both had been strong performers in 2019 and thus some retracement was not unexpected. Glenmore believe the main driver of strong performance in equities throughout 2019 was low interest rates, which continue to underpin demand for stocks. Despite the Fund's significant outperformance over the past 12 months, Glenmore continue to find undervalued stocks in their universe and feel optimistic about the prospects for the portfolio in the year ahead. |
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