News
Performance Report: Spectrum Strategic Income Fund
24 Jun 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund rose +0.69% in May, taking annualised performance since inception in June 2009 to +8.03% versus the RBA Cash Rate's +2.72%.
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24 Jun 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | Spectrum saw storm clouds gathering on a number of fronts during May, specifically highlighting the US/China trade war in their latest report. They suspect Trump's sanction of Huawei may yet return to haunt him as a number of large US Technology companies depend on Huawei to buy their products - Google and Broadcomm intervened to seek relief for the imposed sanctions due to the detrimental effect on their businesses. The net result of Trump's efforts, they say, saw a risk-off event; equities were sold, high yield was sold, and bonds enjoyed a rally. Spectrum's view is that risk-off looks certain to continue for as long as fears of trade remain elevated and Trump looks for further opportunities to impose tariffs. |
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Performance Report: 4D Global Infrastructure Fund
24 Jun 2019 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +0.96% in May, outperforming the benchmark (OECD G7 Inflation Index +5.5%) by +0.18% and taking annualised performance since inception in March 2016 to +13.69%.
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24 Jun 2019 - Performance Report: 4D Global Infrastructure Fund
By: Australian Fund Monitors
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| Fund Overview | The fund will be managed as a single portfolio of listed global infrastructure securities including regulated utilities in gas, electricity and water, transport infrastructure such as airports, ports, road and rail as well as communication assets such as the towers and satellite sectors. The portfolio is intended to have exposure to both developed and emerging market opportunities, with country risk assessed internally before any investment is considered. The maximum absolute position of an individual stock is 7% of the fund. |
| Manager Comments | The strongest portfolio performer for May was Brazilian toll road operator CCR (+17.2%). 4D noted this stock was oversold in April on an ongoing flow of corruption rumours and they believe the rebound in May was well justified. The weakest performer was global port operator DP World (-14.5%) as the US/China trade wars remain an overhang on the port story creating volatility. 4D noted that, despite a slowing global macro environment, they believe it remains in positive territory and supportive of the Fund's bias towards user pay assets. They also expect emerging markets to see a recovery with Fed rate hikes stalled. They remain cautious of ongoing geo-political issues and have positioned accordingly, avoiding certain markets until issues are resolved (e.g. Brexit). They are also seeing certain markets move ahead of fundamentals and are looking to take a more defensive stance in these regions. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
21 Jun 2019 - Australian Fund Monitors
The Gyrostat Absolute Return Income Fund rose +5.29% in May, outperforming the ASX200 Accumulation Index by +3.58% and taking annualised performance since inception to +4.48%.
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21 Jun 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 performed strongly in May with solid gains across the portfolio, particularly the banking sector with the post-election rally. Gyrostat noted this was consistent with their track record and guidance of returns increasing with market volatility. The Fund has a tail hedge always in place for increasing gains on large market falls. During 2018-19 Gyrostat's investment view remains that stock market volatility will increased both up and down, consistent with historical 'late cycle' market conditions. Gyrostat noted they prefer trending and volatile markets. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
21 Jun 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund has returned +15.96% p.a. since inception in Jan 2009 versus the ASX200 Accumulation Index's +10.75% p.a. over the same period.
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21 Jun 2019 - 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 | The Fund returned -2.09% in May. The largest detractor was Reliance Worldwide after the company downgraded its earnings guidance during the month. As Reliance had a significant weighting in the portfolio, the share price decline had a material impact on performance. In their latest report, Bennelong point out a number of issues they believe impacted Reliance's performance, noting that they believe these issues are largely one-off events and that they continue to believe in the company's longer term prospects. Other detractors included Corporate Travel Management and Costa Group. Aristocrat Leisure contributed positively after the company reported a strong interim result during the month, with growth revenues and earnings per share of 30% and 17% respectively. Bennelong's view is that while valuation metrics such as price-to-earnings ratios appear relatively attractive for the ASX, the main risk they see is that of earnings risk; i.e. the risk that companies disappoint investors by delivering earnings below expectations. They noted that share prices have often fallen disproportionately in response to earnings downgrades, such as those seen with Reliance Worldwide and Costa Group. Their conclusion is that investors remain very risk-averse, short-term focused and skittish. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
21 Jun 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund was flat in May, with short positions in banks the key detractors given the strong rally following the unexpected Coalition victory in the federal election. Since inception in May 2006 the Fund...
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21 Jun 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 | Top contributors included Evolution Mining (+33bp contribution), Northern Star (+29bp), Audinate Group (+32bp), Polynovo (+19bp) and Aristocrat Leisure (+19bp). The short book was the biggest detractor (-90bp), driven by short positions in two of the major four banks as well as a short position in Share Price Index Futures. Other detractors included Macquarie Group (-35bp), A2 Milk (-18bp) and Oz Minerals (-15bp). Net equity market exposure was decreased from 51.5% to 13.5% (47.6% long and 34.1% short), with the key changes being the sale of Bluescope, Fortescue and Worley Parsons and a large increase in their short position in Share Price Index Futures. This was partly offset by new positions in Evolution Mining and Flight Centre, as well as increased weightings in Commonwealth Bank, Polynovo and Northern Star. |
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Performance Report: Bennelong Australian Equities Fund
19 Jun 2019 - Australian Fund Monitors
The Bennelong Australian Equities Fund has returned +13.34% p.a. since inception in February 2009 versus the ASX200 Accumulation Index's +10.75%.
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19 Jun 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 | The Fund returned -1.45% in May, taking the YTD return to +13.08%. The largest detractor was Reliance Worldwide after the company downgraded its earnings guidance. Bennelong noted that, as Reliance had a large weighting in the portfolio, the share price decline had a material impact on performance. Other detractors included Corporate Travel Management and Costa Group. The main positive contributor to performance was Aristocrat Leisure. Bennelong's view is that while valuation metrics such as price-to-earnings ratios appear relatively attractive for the ASX, the main risk they see is that of earnings risk; i.e. the risk that companies disappoint investors by delivering earnings below expectations. They note that share prices have often fallen disproportionately in response to earnings downgrades, such as those seen with Reliance Worldwide and Costa Group. Their conclusion is that investors remain very risk-averse, short-term focused and skittish. |
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Bennelong Twenty20 Australian Equities Fund May 2019
18 Jun 2019 - 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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18 Jun 2019 - Bennelong Twenty20 Australian Equities Fund May 2019
By: Australian Fund Monitors
AFM Fund Review - May 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 - May 2019 (pdf format)
Performance Report: Cyan C3G Fund
17 Jun 2019 - Australian Fund Monitors
The Cyan C3G Fund rose +2.81% in May, outperforming the ASX200 Accumulation Index by +1.1% and taking annualised performance since inception in August 2014 to +19.21% versus the Index's +7.39%.
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17 Jun 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 included Alcidion, Isentia, AMA Group and ReadCloud. Detractors included Kelly Partners, Experience Co and Afterpay, although smaller weightings in these companies curtailed any material negative Fund performance. The Fund has subscribed to a number of smaller placements but has also taken stock in a handful of new IPO's due to list in the next month or two. Some of these include Victory Offices who operate 19 flexible workspace locations, and Quickfee who offer premium funding and payment solutions to the accounting and legal industries in both Australia and the US. Cyan emphasise that, whilst month-to-month volatility can be expected, they have a firm view of long-term opportunity and remain confident in the outlook for the Fund. |
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Performance Report: DS Capital Growth Fund
14 Jun 2019 - Australian Fund Monitors
The DS Capital Growth Fund rose +2.37% in May, outperforming the ASX200 Accumulation Index by +0.66% and taking annualised performance since inception in Jan 2013 to +15.33% with a volatility of 7.30% p.a. versus the Index's return of...
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14 Jun 2019 - Performance Report: DS Capital Growth Fund
By: Australian Fund Monitors
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| Fund Overview | The investment team looks for industrial businesses that are simple to understand; they generally avoid large caps, pure mining, biotech and start-ups. They also look for: - Access to management; - Businesses with a competitive edge; - Profitable companies with good margins, organic growth prospects, strong market position and a track record of healthy dividend growth; - Sectors with structural advantage and barriers to entry; - 15% p.a. pre-tax compound return on each holding; and - A history of stable and predictable cash flows that DS Capital can understand and value. |
| Manager Comments | The Fund performed strongly in May with solid gains across the portfolio. Top performers included Lifestyle Communities, AMA Group and Interxion (US listed). There were no major changes to the portfolio. DS Capital noted the election result was embraced by the stock market with the policy agenda of the winners appearing favourable for economic growth. In the meantime, they expect low interest rates to have a favourable impact on stock market valuations. They add that although rates will ultimately normalise they don't believe this is likely in the near term. DS Capital feel the portfolio is well positioned as they work toward reporting season. |
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Fund Review: Bennelong Kardinia Absolute Return Fund May 2019
14 Jun 2019 - Australian Fund Monitors
The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund is a long-biased, research driven, active equity long/short strategy which invests in listed ASX companies with track records greater than 10 years.
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14 Jun 2019 - Fund Review: Bennelong Kardinia Absolute Return Fund May 2019
By: Australian Fund Monitors
AFM Fund Review - May 2019 (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 with over ten-year track record.
- 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 9.12% p.a. with a volatility of 7.06%, compared to the ASX200 Accumulation's return of 6.09% p.a. with a volatility of 13.23%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Mark Burgess and Kristiaan Rehder 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 - May 2019 (pdf format)
