News
Performance Report: Bennelong Australian Equities Fund
22 Nov 2019 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +0.89% in October, outperforming the ASX200 Accumulation Index by +1.24% and taking annualised performance since inception in February 2009 to +13.72% versus the Index's +10.89%.
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22 Nov 2019 - Performance Report: Bennelong Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Bennelong Australian Equities Fund seeks quality investment opportunities which are under-appreciated and have the potential to deliver positive earnings. The investment process combines bottom-up fundamental analysis with proprietary investment tools that are used to build and maintain high quality portfolios that are risk aware. The investment team manages an extensive company/industry contact program which helps identify and verify various investment opportunities. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to the ASX-listed securities. The Fund typically holds between 25-60 stocks with a maximum net targeted position of an individual stock of 6%. |
| Manager Comments | As at the end of the month, the Fund's weightings had been increased in the Discretionary, Health Care, Industrials and Financials sectors, and decreased in the IT, Communications, Consumer Staples, REITs and Materials sectors. The Fund's top holdings at the end of the month were CSL, BHP Billiton and Reliance Worldwide. The Fund aims to invest in high quality companies with strong growth outlooks and underestimated earnings momentum. The Fund's portfolio characteristics, as detailed in the latest report, indicate that the Fund is in line with the manager's investment objective. |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
21 Nov 2019 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund has returned +8.29% p.a. with an annualised volatility of 6.80% since inception in July 2013 versus the ASX200 Accumulation Index's return of +10.02% p.a. with an annualised volatility of 10.63% over...
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21 Nov 2019 - 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 | The Fund returned -0.15% in October, however, Harvest Lane believe this doesn't quite tell the full story. The portfolio saw a marked change in composition as a large number of mature deals completed, bringing with it a much needed reinjection of cash to recycle into new opportunities. The majority of the portfolio made positive contributions to performance with non-specific weakness amongst a handful of positions enough to offset it. Harvest Lane noted new deals continue to flow and they are seeing increased offers in existing positions, setting the portfolio up for what they believe should be a strong finish coming in to the end of the calendar year. They added that the start to November has already seen a great deal of activity with further deals and price increases announced. |
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Performance Report: Cyan C3G Fund
20 Nov 2019 - Australian Fund Monitors
The Cyan C3G Fund has returned +20.48% p.a. since inception in August 2014, outperforming the ASX200 Accumulation Index by 12.54% on an annualised basis. The Fund has achieved this return with approximately the same level of volatility as the market.
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20 Nov 2019 - 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 Cyan C3G Fund has returned +20.48% p.a. since inception in August 2014, outperforming the ASX200 Accumulation Index by 12.54% on an annualised basis. The Fund has achieved this return with approximately the same level of volatility as the market. The Fund's Sharpe and Sortino ratios, 1.59 and 3.31 respectively, by contrast with the Index's Sharpe of 0.60 and Sortino of 0.82, highlight the Fund's capacity to achieve superior risk-adjusted returns whilst avoiding the market's downside volatility. The Fund's up-capture ratio for performance since inception of 93.6% and down-capture ratio of 0.1% indicate that, on average, the Fund has captured almost all of the market's upside and none of its downside. The Fund returned -1.64% in October. Cyan noted this weakness was not unexpected given that seven of the Fund's holdings rose more than 30% in September. They reiterated that the reason they didn't sell out completely in September is that they are patient long-term growth investors and have a long-term horizon with respect to valuations. Top contributors during the month included Quickstep and Jaxsta. Key detractors included Alcidion and Oventus. Cyan also exited their position in Afterpay which you can read more about here. In addition, in light of recent trends, Cyan have rotated some funds into more defensive valuation positions such as AMA Group (AMA), McPersons (MCP), RPM Global (RUL) and VitaGroup (VTG). The Fund also participated in 2 capital raisings and 3 new IPO's in October. |
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Performance Report: Bennelong Long Short Equity Fund
19 Nov 2019 - Australian Fund Monitors
The Bennelong Long Short Equity Fund rose +8.84% in October, outperforming the ASX200 Accumulation Index by +9.19%. Since inception in February 2002, the Fund has returned +15.37% p.a. versus the Index's +8.37%.
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19 Nov 2019 - 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 | Bennelong noted there was a significant amount of news flow during the month, with many companies providing a trading update with their AGMs. Overall, both long and short portfolios were on the right side of company news. Positive returns were spread across a wide range of pairs from all sectors while negative pairs made a modest contribution. Top contributing pairs included long BlueScope (BSL)/ short Sims Metal (SGM), long Qantas (QAN) / short Flight Centre (FLT) and long Iluka (ILU) / short RIO. |
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Performance Report: Loftus Peak Global Disruption Fund
18 Nov 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund returned +2.69% in October, outperforming AFM's Global Equity Index by +2.1% and taking annualised performance since inception in November 2016 to +20.29% versus the Index's +15.35%.
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18 Nov 2019 - 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 | Top contributors during the month included Apple, Tesla and Nvidia. Key detractors included Mercadolibre, Tencent and Xilinx. The Australian dollar appreciated +2.2% against the US dollar, resulting in the Fund's US dollar positions decreasing. As at 31 October 2019, the Fund carried a foreign currency exposure of 96%. At month end, the Fund was 92% invested in 20 holdings with the balance in cash. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
15 Nov 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund has returned +8.93% p.a. with an annualised volatility of 7% since inception in May 2006. By contrast, the ASX200 Accumulation Index has risen +6.34% p.a. with an annualised volatility of 13.1%...
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15 Nov 2019 - 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 | The Fund returned -0.73% in October, with gold stocks dragging on performance. Top contributors included CSL, Lifestyle Communities, City Chic, Imdex and Rhipe. The individual short book made a positive contribution of +12bp driven by shorts in technology and resources stocks. Detractors included Cleanaway, Northern Star, Evolution, Boral and Nickel Mines. Net equity market exposure was increased from 47.9% to 49.6% (57.4% long and 7.8% short), with the key changes being new positions in National Australia Bank, EML Payments, Pointsbet, nanosonics and Imdex, increased weightings in CSL and Rio Tinto, partially offset by the sale of Boral, Corporate Travel, Cleanaway and Worley. |
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Fund Review: Bennelong Long Short Equity Fund October 2019
14 Nov 2019 - 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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14 Nov 2019 - Fund Review: Bennelong Long Short Equity Fund October 2019
By: Australian Fund Monitors
AFM Fund Review - October 2019 (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 15.37%.
- 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 0.92 and 1.52 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - October 2019 (pdf format)
Performance Report: Loftus Peak Global Disruption Fund
8 Nov 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund has returned +3.63% over the past 12 months and +19.83% p.a. since inception in November 2016. By contrast, AFM's Global Equity Benchmark has returned +15.59% p.a. since the Fund's inception.
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8 Nov 2019 - 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 returned -2.54% in September. Top contributors included Apple, Google and Nutanix, while Netflix, Blackberry and Xilinx all detracted from performance. The Australian dollar appreciated +0.1% over the month against the US dollar, which meant the value of the Fund's US dollar positions decreased. As at 30 September 2019, the Fund carried a foreign currency exposure of 95%. At month end, the Fund was 87% invested in 20 holdings with the balance in cash. |
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Performance Report: NWQ Global Markets Fund
8 Nov 2019 - Australian Fund Monitors
The NWQ Global Markets Fund returned +3.27% over the September quarter, taking annualised performance since inception in September 2018 to +5.20% with an annualised volatility of 7.68%.
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8 Nov 2019 - Performance Report: NWQ Global Markets Fund
By: Australian Fund Monitors
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| Fund Overview | This is achieved through active allocations to a select number of liquid alternative managers that employ a variety of strategies. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record. |
| Manager Comments | The Fund returned -1.73% in September. NWQ noted global markets continue to be caught between the conflicting currents of a global economic slowdown and heightened geopolitical risk on the one hand and central bank policies designed to stimulate growth on the other. This environment favoured managers that adopt a discretionary trading approach and collectively those managers in the Fund's portfolio made a positive contribution to the overall return (+0.62%), while managers with a systematic approach found this environment more challenging (-2.23%). The Fund's equity and currency exposures were positive contributors during the month. There were also modest losses from the Fund's fixed income and commodity exposures. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
7 Nov 2019 - Australian Fund Monitors
The Gyrostat Absolute Return Equity Income Fund rose +2.16% over the September quarter, taking performance over the past 12 months to +8.70% and annualised performance since inception in December 2010 to +4.51% with an annualised volatility of 3.77%.
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7 Nov 2019 - 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 | Gyrostat has for 35 consecutive quarters operated within a 'hard' defined risk parameter (no more than 3% capital at risk with a maximum draw-down of 2.2% in any circumstances) always in place, delivered regular income 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. Gyrostat noted it is an 'alternative - defensive' conservative asset allocation. Gyrostat anticipate increasing levels of 'late cycle' market volatility with geopolitical, historically high debt levels, and valuations elevated. |
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