News
Performance Report: 4D Global Infrastructure Fund
29 Nov 2017 - Australian Fund Monitors
The 4D Global Infrastructure Fund returned +3.51% in October, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +3.10%. Since inception in March 2016, the Fund has returned +15.96% per annum.
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29 Nov 2017 - 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 for the month was Indonesian toll road operator Jasa Marga (+16.1%) while the weakest performer was Brazilian contracted generator AES Tiete (-9.2%). AES Tiete fell on concerns over very poor national hydrology in September, however, the Manager noted Tiete remains a solid operator with a strong balance sheet and attractive yield. The Manager's outlook for global listed infrastructure over the medium term remains positive. They note there has been a significant underinvestment in infrastructure around the world over the past 30 years and that public sector fiscal and debt constraints will limit governments' ability to respond, resulting in an increasing need for private sector capital as part of the funding solution. |
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Performance Report: Qato Capital Market Neutral Fund
28 Nov 2017 - Australian Fund Monitors
The Qato Capital Market Neutral Fund fell -1.45% during October with performance hampered given the aggressive rally in the ASX100, which finished October +3.78%.
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28 Nov 2017 - Performance Report: Qato Capital Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund seeks to preserve capital and maximise absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks by generally holding up to 50 S&P/ASX-100 positions (up to 25 long positions & 25 short positions). Historically, the strategy has been uncorrelated to traditional asset classes with a negative beta to equity markets. Qato Capital's process is entirely systematic - stock selection and risk management are all employed in a rules based approach. Positions in Qato's long-portfolio and short-portfolio are rotated monthly dependent upon their Q-Score ranking. The strategy employs no financial leverage/gearing to purchase securities, no derivatives and no financial products to imitate leverage. |
| Manager Comments | Positive contributors for the month included REA Group (+7.88%), Brent Crude (+6.65), Treasury Wines (+14.32%), Fairfax (+16.40%) and Aristocrat (+12.14%). Detractors included Bluescope (+17.05%) and Healthscope (+17.37%), with short positions in both dragging on the gains of the long book considerably. Fortescue Metals performed strongly for Qato's short book (-9.73%) despite October's broad based rally. Qato noted the discounted spot price of poorer quality iron ore was key to the move, with reduced Chinese steel mill utilisation meaning higher quality ore was preferred. Qato's Market Neutral strategy invests in the S&P/ASX100 utilising the Q-Score process, a fundamentally based systematic model which captures improvements and deteriorations in fundamentals, price and risk metrics. The portfolio construction seeks dollar neutrality through targeting 25 long and 25 short positions, with gross exposure averaging 170% and net exposure averaging +5%. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
27 Nov 2017 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +4.56% in October, taking performance over the past 12 months to +17.23%.
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27 Nov 2017 - Performance Report: Bennelong Twenty20 Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed as one portfolio but comprises and combines two separately managed exposures: 1. An investment in the top 20 stocks of the markets, which the Fund achieves by taking an indexed position in the S&P/ASX 20 Index; and 2. An investment in the stocks beyond the S&P/ASX 20 Index. This exposure is managed on an active basis using a fundamental core approach. The Fund may also invest in securities expected to be listed on the ASX, securities listed or expected to be listed on other exchanges where such securities relate to ASX-listed securities.Derivative instruments may be used to replicate underlying positions and hedge market and company specific risks. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Accumulation Index. The Fund typically holds between 40-55 stocks and thus is considered to be highly concentrated. This means that investors should expect to see high short-term volatility. The Fund seeks to achieve growth over the long-term, therefore the minimum suggested investment timeframe is 5 years. |
| Manager Comments | At the end of October, the Fund's weightings were increased in the Consumer Staples, Health Care and Materials sectors whilst weightings in the Discretionary, Industrials, Telco's and Financials sectors. The Fund combines a passive investment in the S&P/ASX20 Index and an actively managed investment in Australian listed stocks outside this index. The passive position is achieved by investing individually in each of the S&P/ASX20 Index's individual stocks with approximately the same weightings they represent in the S&P/ASX300. Currently this weight is approximately 60% of the Fund's portfolio. The active position in ex-20 stocks has the goal of allowing the Fund to outperform the broader market. |
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Performance Report: MHOR Australian Small Cap Fund
24 Nov 2017 - Australian Fund Monitors
The MHOR Australian Small Cap Fund rose +6.11% in October, outperforming the ASX200 Accumulation Index by +2.1%.
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24 Nov 2017 - Performance Report: MHOR Australian Small Cap Fund
By: Australian Fund Monitors
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| Fund Overview | MHOR looks for investment that exhibit the following set of characteristics: -Opportunity - to take advantage of growth and positive alignment with industry themes and trends. -Quality business - competitively advantaged product or service offering. -Financial flexibility - appropriately resourced to capture its opportunity. -Management - with the vision and capability to bring it all together. -Fundamentally undervalued. MHOR also considers labour standards, environmental, social and ethical considerations when making investment decisions but only to the extent that these factors impact the assessment of risk or return. The minimum suggested investment timeframe is 3-5 years. |
| Manager Comments | Positive contributors in October included Alliance Aviation Services (AQZ), IPH Ltd (IPH) and G8 Education (GEM). The key detractor were Xenith IP Group (XIP) which, as MHOR noted, provided a disappointing trading updated citing lower than anticipated earnings from the newly acquired Griffith Hack business. MHOR thinks these integration issues will likely be transitory rather than systematic while valuation remains supportive at these levels (sub 10x PE, 7% yield). The Fund entered October with 36 stocks and 6.7% cash, exiting the month with 33 stock and 13.5% cash. MHOR's view is that synchronised global economic growth continues to underpin a constructive outlook for equity markets. Monetary policy is expected to normalise, however, MHOR only anticipate a gradual tightening cycle considering stubbornly low wage inflation and relatively high household debt levels. Domestically, MHOR remain cautious on retail and property, preferring to play resources, mining services and technology whilst remaining disciplined on valuation. The Fund's relatively high cash levels provides them MHOR with ample flexibility to capitalise on investment opportunities over the coming months. |
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Performance Report: KIS Asia Long Short Fund
24 Nov 2017 - Australian Fund Monitors
The KIS Asia Long Short Fund returned +0.67% in October with an annualised return since inception in October 2009 of +13.73%.
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24 Nov 2017 - 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 | The gains on the portfolio were driven by long positions this month, on aggregate the Fund made 1.4x as much money on long positions as the losses it suffered on the short. Positive contributors included MedAdvisor (+0.31%), Fairfax Media (+0.24%) and Base Resources Ltd (+0.21%). Detractors included Range International Ltd (-0.39%), HSCEI Index (-0.23%) and a2 Milk Company Ltd (-0.22%). The Manager's report highlights the advantages of running a carefully risk managed portfolio in the face of a protracted bull market. KIS noted that the largest drawdown experienced by an investor in the Fund since inception was -2.6%, this is contrasted against drawdowns experience over the same period by several indices - S&P ASX200 -17.7%, Hang Seng -32.1%, HSCEI -45.1% and S&P500 -17%. |
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Performance Report: Glenmore Australian Equities Fund
22 Nov 2017 - Australian Fund Monitors
The Glenmore Australian Equities Fund returned +5.32% in October, outperforming the ASX200 Accumulation Index by +1.31%.
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22 Nov 2017 - Performance Report: Glenmore Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | Positive contributors in October included Praemium Limited (+37.2%), Pioneer Credit (+20.5), HFA Holdings (13.8%) and Macquarie Atlas Roads (+9.8%). Glenmore's outlook on each of these companies over the next 3-5 years is positive. The only detractor of note was Pacific Current (-8.7%) after it sold its 40% stake in Investors Mutual (IML), the company's largest earnings contributor, to Natixis Global Asset Management at a sale price which was below market expectations. However, Glenmore's view is that Pacific Current remains attractively priced despite near-term uncertainty. |
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Performance Report: Touchstone Index Unaware Fund
21 Nov 2017 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +4.33% in October. Since inception in April 2016, the Fund has returned +14.44% per annum with a volatility of 9.47%.
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21 Nov 2017 - 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 | Over the past 12 months, the Fund has outperformed the ASX200 Accumulation Index by +1.58%. The Fund's up-capture and down-capture ratios indicate that the Fund has, on average, outperformed in both rising and falling markets. The Fund's Sharpe and Sortino ratios for performance over the past 12 months are also superior to those of the Index; the Fund's Sharpe and Sortino ratios are 2.01 and 6.37 respectively, compared with the Index's Sharpe ratio of 1.94 and Sortino ratio of 4.48. |
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Performance Report: Bennelong Australian Equities Fund
20 Nov 2017 - Australian Fund Monitors
The Bennelong Australian Equities Fund returned +4.40% in October, taking annualised performance since inception to +13.92%.
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20 Nov 2017 - 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 | At the end of the October, the portfolio's weightings were decreased in the Industrials, Utilities and Financials sectors and were increased in the Discretionary, Consumer Staples and Materials sectors. The portfolio's weightings in Health Care, IT, Telco's, Energy and REIT's remained the same as they were at the end of September. The Fund's portfolio characteristics, as shown in the latest report, are in line with the Fund's objective of investing in high quality businesses with strong growth outlooks and underestimated earnings and momentum prospects. At the end of October the Fund held 28 stocks, the top 5 being CSL, Westpac, Aristocrat Leisure, NAB and Treasury Wine Estates. |
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Performance Report: Bennelong Long Short Equity Fund
17 Nov 2017 - Australian Fund Monitors
The Bennelong Long Short Equity Fund rose +5.29% in October, taking annualised performance since inception to +16.50%.
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17 Nov 2017 - 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 | Performance during the month reflected a broad spread of positive contributions across two thirds of the portfolio. Losing pairs made small contributions with long Ramsay/short Primary and Healthscope the only one of significance. Long BlueScope/short Sims Metal was the biggest contributor driven by a recovery in BlueScope from a depressed level. Elsewhere, AGM trading updates have been broadly positive for the Fund. The Manager's view is that share markets remain well bid at present with improved earnings and sentiment overcoming any valuation concerns from inevitable policy normalisation. They also noted the recent rally in the local market has taken it to the upper bound of its trading range of between 5,000 - 6,000 for the last 4 years. |
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Performance Report: Cyan C3G Fund
16 Nov 2017 - Australian Fund Monitors
The Cyan C3G Fund returned +6.1% in October. Since inception in July 2014, the Fund has returned +28.1% per annum and outperformed the ASX200 Accumulation Index by +21.9% per annum.
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16 Nov 2017 - 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 | Positive performers in October included Afterpay Touch (+25%), BlueSky Alternative Investments (+28%), AxsessToday (+11%) and Motorcycle Holdings (+15%). The only detractor was cyber safety business Family Zone (-8%), however, the Manager noted the Fund had been reducing its holding as the stock rose and hence the recent retracement was immaterial to the Fund's overall return. Cyan noted that, in recent months, the small cap market has been conducive to making money and they believe there's no sign of it slowing at this stage. That said, Cyan noted one of their ongoing focal points is the risk/reward metric and they therefore retain a relatively high proportion of cash. The Fund is well diversified, with 22 individual holdings and no position accounting for more than 9% of the total fund. |
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