News
Performance Report: 4D Global Infrastructure Fund
12 Nov 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +0.2% in September, taking 12-month performance to +5.27% and annualised performance since inception in March 2016 to +10.72%.
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12 Nov 2018 - 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 performer in September was Brazilian Rail operator Rumo (+9.1%) on the back of the ANTT recommendation for the early renewal of one of its concessions. The weakest performer was global port operator DP World (-11.6%), impacted by increasing global trade tensions. 4D believe that, despite the ongoing posturing between China and the US, the trade talks will ultimately resolve. They also believe that, despite a softening in the global macro outlook, it does remain positive across the board and supportive of global port volumes. 4D remain fundamental buyers of DP World. Given the generally positive global macro environment, 4D remain overweight user pay assets which have a direct correlation to macro strength. However, ongoing geo-political concerns, plus near-term elections, sees them maintain core exposure to quality defensive utilities. |
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Performance Report: Touchstone Index Unaware Fund
9 Nov 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund has returned +16.43% over the past 12 months and +13.80% per annum since inception in April 2016.
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9 Nov 2018 - 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 | At the end of the month the Fund held 21 stocks with a median position size of 4.5%. The portfolio's holdings had an average price/earnings of 15.8, EPS growth of 12.8%, tangible ROE of 19.3% and dividend yield of 4.6%. The Fund's cash weighting decreased to 4.5% from 7.1% at the end of August. The Touchstone Index Unaware Fund primarily selects 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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Performance Report: Newgate Real Estate and Infrastructure Fund
9 Nov 2018 - Australian Fund Monitors
The Newgate Real Estate and Infrastructure Fund has returned +11.93% per annum since inception in July 2013 versus the ASX200 Accumulation Index's +9.80%. This return has been achieved with slightly lower volatility.
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9 Nov 2018 - Performance Report: Newgate Real Estate and Infrastructure Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's research use detailed analysis of the underlying assets integrated with financial analysis to determine a sustainable yield and fundamental DCF valuation for the security. Also the Fund believes in having a strong risk control framework. The Fund will also use trading strategies via rebalancing of core portfolio positions as well as taking advantage of shorter duration inefficiencies in markets caused by an imbalance in demand and supply for global REIT and Infrastructure securities. The Fund focuses on generating absolute returns after fees of 10 to 12% pa over the medium to long term. The long-short nature of the Fund combined with Newgate's rigorous investment process ensures returns generated by the Fund are largely independent of rising or falling markets. Newgate is focused on providing investment opportunities primarily within core, value-add, opportunistic and development sectors of direct property and across listed and unlisted real estate and infrastructure securities. The Fund's investment team consists of Tim Hannon, Andrew Lewandowski. |
| Manager Comments | Over the September quarter, the Fund returned -2.13%. Newgate noted that, over the quarter, the Fund has been impacted by the market's concerns over the escalation of trade conflict between the USA and China. Positive contributors included Japara Healthcare (JHC), Centuria Industrial REIT (CIP), Sydney Airport (SYD) and Updater (UPD). Detractors included Charter Hall Group (CHC), Mirvac Group (MGR) and Data Exchange (DXN). In their latest report, Newgate describe how the Fund benefited from share price declines in the aged care sector after the ABC's Four Corners report and the Prime Minister's subsequent announcement of a Royal Commission. They also discuss their views on Mirvac Group after the Fund's short position in the company failed to deliver. |
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Performance Report: Wheelhouse Global Equities Income Fund
8 Nov 2018 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund rose +0.76% in September, taking performance over the quarter to +6.85% and 12-month performance to +18.73%.
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8 Nov 2018 - Performance Report: Wheelhouse Global Equities 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 Manager believes that the tailwinds that supported growth in global markets over the quarter, such as robust US earnings growth driven by the Trump tax cuts, continued accommodative monetary policy from the US Federal Reserve, and US technology sector outperformance, appear to be slowing. They noted that, as tailwinds become headwinds, the value of strategies that can both protect capital and deliver an income-driven source of real return will likely increase, particularly for investors that require a regular source of both income and real-return to fund their living expenses. The Wheelhouse Global Equity Income Fund is designed to deliver equity returns with higher income generation and active downside protection. As at the end of September, the Fund's performance was broadly in line with equities, outperforming for the year-to-date, but dragging a little in the September quarter. |
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Performance Report: DS Capital Growth Fund
7 Nov 2018 - Australian Fund Monitors
The DS Capital Growth Fund rose +2.1% over the September quarter, outperforming the ASX200 Accumulation Index by +0.6% and taking annualised performance since inception in January 2013 to +15.89%.
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7 Nov 2018 - 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 | DS Capital noted that, during the quarter, they were focused on earnings results. Their view is that, although business conditions were reasonable, it remained challenging to find organic growth and outlook commentary was cautious. Positive contributors included NEXTDC, Baby Bunting and Seek. Detractors included Eclipx and Experience Co. DS Capital sold their holdings in Baby Bunting and Seek, however, they noted they continue to like Seek and will look to reinvest at an appropriate time. The Fund's cash level ranged between 20% - 25% over the quarter. DS Capital noted the risk of a trade war continues to influence investors and will take time to play out. Domestically, they are monitoring deterioration in business conditions after July's political turmoil and the decision by some major banks to lift mortgage rates. They are also watching for signs of accelerating inflation that, together with resulting higher interest rates, will have various implications for asset markets. They also believe the Australian dollar is likely to remain under pressure as further rate rises are expected in the US while Australian rates remain flat. |
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Performance Report: Bennelong Australian Equities Fund
5 Nov 2018 - Australian Fund Monitors
The Bennelong Australian Equities Fund has returned +20.41% over the past 12 months versus the ASX200 Accumulation Index's +13.97%. Since inception in February 2009, the Fund has returned +14.20% per annum with an annualised volatility of 12.89%.
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5 Nov 2018 - 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 | Over the September quarter the Fund returned -2.3% versus the Index's +1.5%. In light of this, Bennelong emphasised that, over time, the quarter-to-quarter performances of the Fund have averaged out to provide clients with very attractive returns and expect that the Fund will continue to do so going forward. Overall, the companies in the portfolio reported strong results and gave reasonable guidance; one of the largest contributors for the quarter, and the largest portfolio position, was CSL Limited. However, in the case of a number of the Fund's larger positions, the market nevertheless reacted negatively which weighed heavily on the Fund's returns. Key detractors over the quarter included Costa Group, Flight Centre and Aristocrat Leisure. Read the Fund's latest quarterly report for their in-depth analysis and outlook for each of these companies. Bennelong noted they increased the Fund's weightings in Costa Group and Flight Centre during the quarter and remain invested in Aristocrat Leisure. Bennelong have neither a bearish or bullish outlook on the market. They see Australian equities to be relatively attractive, however, they still believe there is the need to remain selective. They remain constructive on the market for the following reasons - stock fundamentals look solid, valuations are relatively attractive and investor sentiment is supportive. They also believe there is always a need to be diligent and manage risk and thus have ensured the portfolio is well positioned on a risk/return basis. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
2 Nov 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund has returned +10.16% p.a. since inception in May 2006 versus the ASX200 Accumulation Index's +5.93%. This has been achieved with approximately half the market's volatility.
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2 Nov 2018 - 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's return in September of -1.93% was impacted significantly by holdings in CSL and Aristocrat which offset good performance in mining stocks. Top contributors included Whitehaven Coal (+34bp contribution), Seven Group (+30bp), Rio Tinto (+29bp), Computershare (+10bp) and Independence Group (+9bp). Detractors included CSL (-60bp), Aristocrat Leisure (-41bp), Afterpay Touch (-24bp) and Qantas (-17bp). Net equity market exposure was decreased from 55.2% to 29.9% (64.5% long and 34.5% short), with the key changes being the sale of Viva Energy and Afterpay Touch, a lower weighting in CSL, and new short positions in financial and infrastructure stocks and Share Price Index Futures. |
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Performance Report: Insync Global Capital Aware Fund
1 Nov 2018 - Australian Fund Monitors
The Insync Global Capital Aware Fund has risen +21.16% over the past 12 months (after the cost of fees and protection) versus the Global Equity Index's +19.91%.
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1 Nov 2018 - Performance Report: Insync Global Capital Aware 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 of typically 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. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
| Manager Comments | In September the Fund returned -1.03% after fees and protection. Top contributors included Boston Scientific, Stryker Corp, Visa and Twenty-First Century Fox. The main negative contributors were Heineken, S&P Global, PayPal and Facebook. The Fund continues to have no foreign currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Insync continues to utilise 'out of the money' index put options to buffer sharp falls in equity markets for the protected option of the fund. Insync noted they maintain a positive outlook on their stock holdings. They believe the Fund's holdings will continue to benefit from global 'Megatrends' despite trade wars and rate rises. Insync's valuation approach, which seeks to capture the long-term growth of these companies, continues to show a valuation discount. Should markets continue to perform well, the portfolio of stocks will participate in the rally. However, more importantly, if the market suffers a significant correction then the Fund has a downside strategy in place. |
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Performance Report: KIS Asia Long Short Fund
31 Oct 2018 - Australian Fund Monitors
The KIS Asia Long Short Fund rose +0.18% in September, outperforming the ASX200 Accumulation Index by +1.44%. Since inception in October 2009, the Fund has returned +12.88% per annum versus the market's 7.67%.
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31 Oct 2018 - Performance Report: KIS Asia Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Whilst the Fund's primary strategy is focused on long/short equities, the ability to retain discretionary powers to allocate across a number of other investment strategies is reserved. These strategies may include, but not be limited to: convertible bond investments, portfolio hedging, equity related arbitrage, special situations (e.g. merger arbitrage, rights offerings, participation in international public offerings and placements, etc.). The Fund's geographic focus is Asia excluding Japan, but including Australia). The Fund may invest outside of this region to the extent that: 1. The investment decision is driven from the Asian region or; 2. The exposure is intended to mitigate risk or enhance return from factors external to the Asian region. |
| Manager Comments | During the month the Fund benefited from long call option positions on the HSECI. KIS noted being long an index is unusual for them as they usually have an excess of long ideas that need to be hedged and hence are short indices. Due to weakness in the Hong Kong markets in the first half of September KIS stopped out of various equity long positions. To avoid the risk of a snap back in the market leading to losses on unhedged short equities KIS bought calls and, in tandem with having been short futures earlier in the month, this contributed +0.22%. Across all of the Fund's index hedges, the rest of which were either short futures or long puts, the Fund generated a total of +0.29%. Other positive contributors included GTN Ltd (+0.23%) and SembCorp Marine Ltd (+0.23%). KIS remain long GTN Ltd and have exited their long position in SembCorp Marine Ltd. Key detractors included Telstra (-0.23%) and Vocus (-0.21%). KIS still see the telecom industry in severe difficulty and expect operators such as TPG Telecom (a significant previous contributor delivering +1.06% on the quarter) to compete fiercely on price to gain market share. The Fund also suffered a -1.08% loss on a long position in Aveo Group (AOG.AX). KIS significantly reduced their holding in AOG after the Four Corners report on poor conditions for aged care residents and the Prime Minister's response of a Royal Commission. They believe the timeline for the Royal Commission would lead to a delay in any developments at AOG.AX. |
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Fund Review: Insync Global Capital Aware Fund September 2018
30 Oct 2018 - Australian Fund Monitors
Latest Fund Review on Insync Global Capital Aware Fund is now available. The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend...
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30 Oct 2018 - Fund Review: Insync Global Capital Aware Fund September 2018
By: Australian Fund Monitors
AFM Fund Review - September 2018 (pdf format)
INSYNC GLOBAL CAPITAL AWARE FUND
Attached is our most recently updated Fund Review on the Insync Global Capital Aware Fund.
We would like to highlight the following:
- The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend growth and downside protection.
- Portfolio selection is driven by a core strategy of investing in companies with sustainable growth in dividends, high returns on capital, positive free cash flows and strong balance sheets.
- Emphasis on limiting downside risk is through extensive company research, the ability to hold cash and long protective index put options.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - September 2018 (pdf format)
