News
Fund Review: Bennelong Long Short Equity Fund November 2017
11 Dec 2017 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available.
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11 Dec 2017 - Fund Review: Bennelong Long Short Equity Fund November 2017
By: Australian Fund Monitors
AFM Fund Review - November 2017 (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 large-caps from the ASX/S&P100 Index, with over fourteen-year track record and annualised returns of 16.38% p.a.
- The consistent returns across the investment history indicate 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 0.99 and 1.63 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - November 2017 (pdf format)
Performance Report: Collins St Value Fund
8 Dec 2017 - Australian Fund Monitors
The Collins St Value Fund fell -4.95% in October, the Fund's 3rd negative month in the 21 months since inception in February 2016. The Fund's annualised return since inception is +15.62% versus the Index's +15.04%.
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8 Dec 2017 - Performance Report: Collins St Value Fund
By: Australian Fund Monitors
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| Fund Overview | The managers of the fund intend to maintain a concentrated portfolio of investments in ASX listed companies that they have investigated and consider to be undervalued. They will assess the attractiveness of potential investments using a number of common industry based measured, a proprietary in-house model and by speaking with management, industry experts and competitors. Once the managers form a view that an investment offers sufficient upside potential relative to the downside risk, the fund will seek to make an investment. If no appropriate investment can be identified the managers are prepared to hold cash and wait for the right opportunities to present themselves. |
| Manager Comments | The Fund's performance in October was largely due to two of the Fund's holdings having experienced temporary falls in their share prices. Crowd Mobile fell from 24c per share to 14c per share after the CEO announced he was selling shares to fund a tax liability. However, Collins St noted Crowd Mobile had moved up to 17c and the Fund had recouped the majority of October's losses at the time of writing their latest report. The Fund stands out as one of the few with zero management fees, charging performance fees only, ensuring the Manager's interests are aligned with investors'. It invests in sustainable cash-flow generating businesses that are trading at significant discounts to their underlying worth. |
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Performance Report: Insync Global Titans Fund
8 Dec 2017 - Australian Fund Monitors
The Insync Global Titans Fund returned +3.75% in October, taking the Fund's annualised return since inception in October 2009 to +9.84%.
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8 Dec 2017 - Performance Report: Insync Global Titans 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 | Performance was driven by positive contributions from Paypal, Microsoft, Oracle, Visa and Stryker. The main negative contributors were London Stock Exchange, Unilever, Reckitt Benckiser and Comcast Corp. 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. Over 50% of the Fund is currently protected using Insync's put protection strategy. Insync discuss their investment in Visa in their latest report. Insync consider Visa to continue to be undervalued based on the company sustaining its high levels of profitability over the medium to long term. They believe Visa Europe and increased uptake in India will bolster Visa shares in the medium-term. |
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Performance Report: Paragon Australian Long Short Fund
7 Dec 2017 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +11.89% in November, outperforming the ASX200 Accumulation Index by +10.25% and taking performance over the past 12 months to +38.71%.
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7 Dec 2017 - 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 Fund had another strong month in November driven by solid contributions from Long holdings in Paragon's electric vehicle theme, along with Cann Group, Origin, Agrimin, Cimic, Lynas, Dacian Gold and Global Energy. At the end of the month the Fund had 39 long and 15 short positions. Paragon's latest report discusses the increased global support for legalisation of medicinal cannabis and the subsequent investment opportunities. They note the cannabis market is likely to be $1b - $2b p.a. by 2025, however, they expect this will be dwarfed by the export market (cumulative $20b+ p.a. to $30b+ p.a.). Paragon initiated its position in Cann Group, Australia's leading medical cannabis producer, in August 2017 and remain long the stock. |
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Performance Report: Pengana PanAgora Absolute Return Global Equities Fund
7 Dec 2017 - Australian Fund Monitors
The Pengana PanAgora Absolute Return Global Equities Fund returned -0.70% in October. Since inception in September 2010, the Fund has returned +8.83% per annum.
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7 Dec 2017 - Performance Report: Pengana PanAgora Absolute Return Global Equities Fund
By: Australian Fund Monitors
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| Fund Overview | PanAgora believes the best way to find opportunities in the global markets is to combine fundamental analysis with robust quantitative techniques in order to filter the investment universe and select the investments. The Fund invests primarily in listed equity securities from a global universe of developed markets and a select group of emerging market countries. The Fund's objective is to seek absolute returns by identifying and exploiting multiple inefficiencies that may exist in global equity markets. These inefficiencies are primarily exploited through the use of a long/short equity strategy which aims to construct a portfolio that is generally neutral to market movements. As such the performance of the investment strategy is largely independent of the market's performance. The Fund seeks to achieve its objective by using a diversified set of strategies that have low correlation to one another. In addition, because many of these strategies are designed to generate profit under different market conditions, their combination is expected to result in more stable returns over time than any individual strategy in and of itself. |
| Manager Comments | Performance for the month was driven by the long-term portfolio which contributed -1.00% and struggled amongst developed international stocks. Pengana noted most of the underperformance was concentrated in Europe, particularly the United Kingdom and France. Long-term strategies detracted -1.47%, intermediate-term strategies detracted a marginal -0.02% and short-term strategies contributed +0.31%. In France and the UK, the largest detractors were Just Eat PLC and Remy Cointreau SA. Positive stock selection within Australia contributed +0.12%, specifically within the Industrials and IT sectors. Positions in the U.S. contributed +0.50% with Consumer Discretionary (+0.50%) the largest sector contributor. The Fund continues to be long Amazon due to its good alpha score. |
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Performance Report: Pengana Global Small Companies Fund
5 Dec 2017 - Australian Fund Monitors
The Pengana Global Small Companies Fund returned +1.83% in October, taking annualised performance since inception in April 2015 to +11.26%.
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5 Dec 2017 - Performance Report: Pengana Global Small Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed by Founder & CIO Leah Zell, and Portfolio Managers Jon Moog and David Li. The Lizard investment team have over 50 years combined investment experience in global small cap investing. Leah Zell has over 30 years of experience and is a recognized expert in international investing in the international small-cap category. The Fund's investment team uses a value-oriented investment approach to small and mid-cap global equities that seeks to identify and invest in quality businesses that create significant value but are mispriced, overlooked or out-of-favour. The investment manager believes that unique opportunities exist due to limited available research, corporate actions or unfavourable investor perception. The portfolio construction process aims to develop portfolios that incorporate the best investment ideas from the investment manager's research while allowing for liquidity constraints and perceived risk. The Fund's investment manager will not typically hedge currency exposures, however during periods of currency extremes, some currency hedging may be employed. Derivatives may be used to achieve long or short exposures, reduce risk and reduce transaction costs. Derivatives will not be used for the purposes of leverage and the Fund's net exposure will never be short. |
| Manager Comments | The Fund underperformed its benchmark (MSCI All Country World SMID Cap Index Unhedged in AUD) in October. Pengana noted being underweight US equities relative to the benchmark was a significant reason for the underperformance. However, Pengana emphasise that they make no effort to track the benchmark. Top 3 contributors were Softcat Plc, Wizz Air Holdings Plc and Motorpoint Group Plc. Top 3 detractors were IWG Plc, Peyto Exploration & Development Corp. and NetScout Systems Inc. IWG, a British provider of short-term office rentals, materially missed Pengana's revenue and profit expectations this month. This caused a meaningful sell-off in the stock which resulted in IWG being the portfolio's largest detractor in October. Pengana noted they are watching the company closely to ensure their long-term thesis is playing out as expected. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
4 Dec 2017 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund returned +6.31% in October, taking annualised performance since inception in January 2009 to +18.39% with a volatility of 13.58%.
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4 Dec 2017 - 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 | At the end of October, the Fund's weightings were increased in the Discretionary, Consumer Staples and Materials sectors, whilst weightings were decreased in the Health Care, Industrials and Financials sectors. The Fund currently holds 21 stocks. The Fund's investment philosophy is to selectively invest in high quality companies with strong growth outlooks and underestimated earnings momentum prospects, this is highlighted by the Fund's portfolio characteristics as shown in the latest report. |
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Fund Review: Insync Global Titans Fund October 2017
1 Dec 2017 - Australian Fund Monitors
Latest Fund Review on Insync Global Titans Fund is now available.
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1 Dec 2017 - Fund Review: Insync Global Titans Fund October 2017
By: Australian Fund Monitors
AFM Fund Review - October 2017 (pdf format)
INSYNC GLOBAL TITANS FUND
Attached is our most recently updated Fund Review on the Insync Global Titans Fund.
We would like to highlight the following:
- The Global Titans 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 - October 2017 (pdf format)
Performance Report: Quay Global Real Estate Fund
1 Dec 2017 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +1.80% in October. The Fund has achieved an annualised return since inception in July 2014 of +14.19%.
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1 Dec 2017 - 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 | At the end of October, the Fund's weightings were increased in the Manufacture Housing, Retail and Data Centre sectors and decreased in the Multifamily/apartments, Student Accommodation, Health, Lodging and Industrial sectors. Geographically, the Fund remains heavily weighted towards the US (55.9% of the portfolio), followed by the UK (15.4%), Australia (10.7%), Canada (6.4%), Germany (4.4%), Spain (4.4%) and Hong Kong (4.1%). The Manager noted the recent decline in the Australian dollar has become a tailwind to the Fund's returns, after almost two years acting as a headwind. Quay believe the impact of currency on the Fund's reported total returns will have a diminished effect over time as currencies tend to be mean-reverting, and the compounding effect of stock returns overwhelm the one-off currency adjustments. |
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Performance Report: Pengana Absolute Return Asia Pacific Fund
30 Nov 2017 - Australian Fund Monitors
The Pengana Absolute Return Asia Pacific Fund returned +2.20% in October, taking annualised performance since inception in September 2010 to +8.47%.
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30 Nov 2017 - Performance Report: Pengana Absolute Return Asia Pacific Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will usually hold 40 to 80 positions and will be well diversified across the various event strategies. In keeping with the absolute return focus the Manager will eliminate market risk where appropriate by hedging market and foreign currency risks. Since inception the Fund has averaged a net equity market exposure of ~10%. Sizing of an investment position will depend on the expected risk adjusted returns while taking account the liquidity and volatility of the stock. In addition, the maximum potential loss on any one position should be greater than 0.5% of the NAV and the position should not exceed 30% participation of stressed volume assuming a $200m NAV. Other criteria considered are ability to hedge and the availability of pair candidates as well as the average bid-ask size. For M&A strategies average long position is 3 to 5.5% and average short position 2 to 5%. |
| Manager Comments | The M&A sub-strategy rose +0.88%, with a year-to-date contribution of +5.2%. The largest contributor was a scrip merger in Alpine Electronics and Alps Electric in Japan. In Australia, Pengana added a new M&A position in Mantra Group. The French group Accor S.A. has offered to acquire all Mantra shares at A$3.96, via a scheme of arrangement. Pengana have also exited the position in Challenger Limited which contributed +0.15% to overall performance. In Hong Kong, Pengana added Tiangong International, offering an annualised IRR of >20% to the proposed take out price of HK$0.90. Pengana anticipates the share price could trade above the take out price due to the low premium offered. The Relative Value book contributed +0.53% during the month. A positive contributor was Pengana's long position in Qantas Airways vs short in Singapore Airlines contributing +0.14%. In Australia, Pengana's position in the Fairfax separation hedged against REA contributed +0.15%. In Japan, Pengana's HoldCo trade long Keisei Electric vs short Oriental Land contributed +0.12%. Pengana also added a new pair long Mitsui OSK vs short Kawasaki Kisen. The Directional Alpha book contributed +0.85%. Key successes during October included Shangri-La Asia (+7.2), 3sBio (+11.5%) and Softbank (+9.5%), whilst detractors included China Foods (-1%), and IHH Healthcare CB (-0.6%). Pengana note that they have locked in gains in HSBC and Capital Land and added Reliance Industries and Thai Beverage to their Directional Alpha book. For Reliance Industries, Pengana see supply side reforms in chemicals and consolidation in telecom as catalysts for outperformance. |
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