News
Performance Report: Cyan C3G Fund
13 Aug 2019 - Australian Fund Monitors
The Cyan C3G Fund returned +5.2% in July, outperforming the ASX200 Accumulation Index by +2.26% and marking 5 years since inception in August 2014. Over that time the Fund has achieved an annualised return of +19.99% versus the Index's +8.55%.
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13 Aug 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 | Top contributors during the month included Alcidion, Quickfee, Readcloud, Atomos and PSC Insurance. Cyan noted very few of the Fund's holdings performed poorly in July. Cyan believe ongoing trade wars and associated currency fluctuations are likely to continue to drive sentiment in the short term. They noted that, rather than trying to pick short-term trading directions, they continue to invest on a stock specific basis through a well-diversified portfolio of around 30 companies. Cyan expect the market to focus more fully on individual company performance rather than macro events and short-term sentiment during reporting season. |
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Fund Review: Bennelong Long Short Equity Fund July 2019
13 Aug 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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13 Aug 2019 - Fund Review: Bennelong Long Short Equity Fund July 2019
By: Australian Fund Monitors
AFM Fund Review - July 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 15.17%.
- 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 0.91 and 1.48 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - July 2019 (pdf format)
Performance Report: Bennelong Kardinia Absolute Return Fund
12 Aug 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund returned +0.42% in July, taking annualised performance since inception in May 2006 to +9.26% with an annualised volatility of 7.03%.
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12 Aug 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 | July's return was driven by gold, industrials and key healthcare stocks. Top contributors included A2 Milk, Evolution, Northern Star, Magellan Financial Group, CSL and Polynovo. Detractors included Next Science, Nearmap, Rio Tinto and Audinate Group. The largest detractors were a short position in Share Price Index Futures and the individual short book. Net equity market exposure was increased from 24.9% to 40.5% (73.3% long and 32.8% short), with the key changes being a new long position in Westpac and increased weightings in Commonwealth Bank, James Hardie, Xero, A2 Milk and Macquarie Group. This was partly offset by the sale of NAB and Next Science and four new individual stock shorts in the financials and resources sectors. |
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Performance Report: Bennelong Long Short Equity Fund
9 Aug 2019 - Australian Fund Monitors
The Bennelong Long Short Equity Fund returned +6.92% in July, outperforming the ASX200 Accumulation Index by +3.98% and taking annualised performance since inception in February 2002 to +15.17% versus the Index's +8.55%.
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9 Aug 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 | During the month the Fund experienced a favourable balance of fundamental news. In addition, Bennelong noted appetite for higher yield stocks moderated, which was a tailwind for returns. They believe the elimination of the dividend in two ASX200 companies experiencing operating headwinds is a reminder that yield is no certainty in the equity markets. At the sector level Financials were the Fund's top contributor while Consumer Discretionary was the greatest detractor. The number of positive pairs exceeded the negative. The contribution of the Fund's negative pairs was modest. |
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Performance Report: Paragon Australian Long Short Fund
8 Aug 2019 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +9.4% in July, outperforming the ASX200 Accumulation Index by +6.46% and taking annualised performance since inception in February 2013 to +10.87% versus the Index's +9.22%.
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8 Aug 2019 - 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 +9.4% in July, outperforming the ASX200 Accumulation Index by +6.46% and taking annualised performance since inception in February 2013 to +10.87% versus the Index's +9.22%. Positive contributors came from gold holdings including Alacer Gold, as well as iSignthis, Xero, Agrimin and a short position in Pilbara. Paragon believe the move in gold, particularly the moves in their gold longs, are still in their infancy. Paragon noted they continue to be very constructive on gold, especially A$ gold. They added that gold particularly benefits from accommodative monetary policy (namely low and falling cash rates), quantitative easing (QE), falling bond rates (namely negative or approaching negative real rates) and global market volatility, all four of which arose in the last month. Paragon believe the best returns will be made in identifying key stocks that meet particular criteria:
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Performance Report: NWQ Global Markets Fund
31 Jul 2019 - Australian Fund Monitors
The NWQ Global Markets Fund rose +0.11% in June, taking performance since inception in September 2018 to +2.30%. There were strong positive contributions to the Fund's overall return in June from its equity and fixed income exposures.
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31 Jul 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 | NWQ's view is that equity and bond market pricing reflect two very different outlooks for the global economy; equity investors are looking through falling earnings and expecting the Fed to step in and cut interest rates to justify current multiples, while bond investors see deteriorating economic fundamentals and geopolitical risks as potentially leading to a recession in the near term. NWQ believe we are likely to see higher levels of volatility whilst these conflicting outlooks resolve themselves. In this scenario they consider having a diversified portfolio of managers a sound way of navigating the potentially challenging times ahead. |
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Performance Report: Loftus Peak Global Disruption Fund
31 Jul 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +6.5% in June, outperforming AFM's Global Equity benchmark by +1.2% and taking annualised performance since inception in November 2016 to +21.94% versus the Index's +15.45%.
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31 Jul 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 | Loftus Peak noted the Fund's performance in May was largely reversed in June as Presidents Trump and Xi signalled their intentions to restart trade negotiations. As a result, at the end of June a number of Loftus Peak's investee companies performed more strongly after having been unable to sell to Huawei because of the ban. Top contributors included Qualcomm, Xilinx, Nvidia and Apple. Detractors included VMware, Nutanix and Google. At the end of the month the Fund was 82% invested in 23 holdings with the balance in cash. The Australian dollar appreciated +1.3% over the month against the US dollar, which meant the value of the Fund's US dollar positions decreased. As at 30 June 2019, the Fund carried a foreign currency exposure of 99%. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
30 Jul 2019 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund returned +7.09% over the financial year, outperforming the RBA Cash Rate by +5.61%. Since inception in December 2010, the Fund has returned +4.39% per annum with an annualised volatility of 3.57%.
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30 Jul 2019 - Performance Report: Gyrostat Absolute Return Income Equity Fund
By: Australian Fund Monitors
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| Fund Overview | Our 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. Fund features: - holds a diversified portfolio of higher yielding ASX20 stocks. - has the lowest cost protection, always in place, at the stock specific level, with upside. - delivers regular equity income by passing through dividends. 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, short term bond returns in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.8% 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's objective is to deliver regular and stable equity income (by passing through ASX 20 dividends) at a minimum of the BBSW 90 + 3% with capital security and growth. The Fund buys and holds ASX 20 shares with lowest cost protection always in place with upside. Gyrostat noted during June 2019 there was very little market volatility - there was a small reduction in NAV of 0-0.42% consistent with the Fund's guidance. Gyrostat believe the Fund is well positioned to benefit from any uplift in market volatility, which is consistent with 'late cycle' market conditions. They continue to be committed to their distinctive 'hard' risk parameter. |
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Performance Report: Bennelong Emerging Companies Fund
30 Jul 2019 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +3.44% in June, taking performance over the financial year to +15.08% and annualised performance since inception in November 2017 to +26.58%.
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30 Jul 2019 - 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 Fund returned +16.00% over the June quarter. Assisting performance were strong returns from large positions such as Jump Interactive, Zip Co, EML Payments and Nearmap. Bennelong noted they have since trimmed some of their tech holdings, including some of these names, and have diversified more into other sectors where they are finding opportunities. |
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Performance Report: Touchstone Index Unaware Fund
29 Jul 2019 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +2.14% in June. Since inception in April 2016, the Fund has returned +11.43% per annum with an annualised volatility of 9.89%.
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29 Jul 2019 - 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 | As at the end of June, the Fund held 22 stocks with a median position size of 4.6%. The portfolio's holdings had an average forward year price/earnings of 16.1, forward year EPS growth of 5.1%, forward year tangible ROE of 23.2% and forward year dividend yield of 4.3%. The Fund's cash weighting was decreased to 3.0% from 3.4% as at the end of May. The Fund primarily seeks to select stocks from the ASX300 Index, typically holding between 10-30 stocks. The Fund seeks to invest in reasonably priced, good quality companies with a significant share of expected returns coming from sustainable dividends. |
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