Paragon Australian Long Short Fund

4 Sep 2017 - Australian Fund Monitors

The Paragon Australian Long Short Fund rose +7.3% in August, outperforming the ASX All Ordinaries Accumulation Index by +6.5%.

4 Sep 2017 - Paragon Australian Long Short Fund

By: Australian Fund Monitors

Report Date	04 September 2017
Manager	Paragon Funds Management
Fund Name	Paragon Australian Long Short Fund
Strategy	Equity Long/Short
Latest Return Date	August 2017
Latest Return	7.30%
Latest 6 Months	3.74%
Latest 12 Months	-11.17%
Latest 24 Months	15.46%
Annualised Since Inception	12.94%
Inception Date	28 February 2013
FUM (millions)	AU$72.3
Fund Overview	The Fund is a concentrated long/short Australian equities product that is fundamentally driven with a focus on the industrial and resource sectors. Paragon's own research process and active portfolio management is overlaid with risk management and an overarching focus on capital preservation. Paragon believes that markets are not always efficient, exhibiting a common tendency to price securities well outside of their intrinsic value over the medium term. This market characteristic provides the opportunity for Paragon, an active manager with a flexible mandate, to generate superior investment returns over the longer term. Paragon believes that it is critical to understand both the companies and the industries in which they operate, in order to fully comprehend each investment opportunity. Accordingly, a fundamental approach to company research is taken. Assessing the potential downside is also paramount in framing the risk/reward trade-off for potential investments.
Manager Comments	The Paragon Australian Long Short Fund rose +7.3% in August, outperforming the ASX All Ordinaries Accumulation Index by +6.5%. Since inception in February 2013, the Fund has returned +12.9% p.a. versus the Index's annualised return of +7.2% over the same period. Main contributors for the month were gains in Kidman, Updater, Global GeoScience, Smartgroup, FastBrick Robotics, Wattle Heath and Lynas plus shorts in Telstra, Domino's Pizza and Select Harvest. At the end of the month the Fund had 42 long and 18 short positions. The Fund's cash holdings were reduced to 20.8% from 29% in July. Paragon's short in Telstra was initiated at $4.83 per share in February 2017, premised on rising Mobile & Broadband competition. In August, Telstra downgraded its FY17 results, cutting its FY18 dividend from 29.5cps to 22cps. Paragon's short in Domino's was initiated at $71 per share based on the view that it was an expensive growth stock (greater than 50x PE ratio) under pressure. Paragon are maintaining their short positions in both Telstra and Domino's.
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Quay Global Real Estate Fund

22 Aug 2017 - Australian Fund Monitors

The Bennelong Quay Global Real Estate Fund has risen +5.4% over the past 6 months, outperforming the FTSE/EPRA NAREIT Developed Index Net TR AUD by +4.4%.

22 Aug 2017 - Quay Global Real Estate Fund

By: Australian Fund Monitors

Report Date	22 August 2017
Manager	Quay Global Investors
Fund Name	Quay Global Real Estate Fund
Strategy	Real Estate
Latest Return Date	July 2017
Latest Return	-1.30%
Latest 6 Months	5.48%
Latest 12 Months	-3.51%
Latest 24 Months	8.01%
Annualised Since Inception	13.98%
Inception Date	31 July 2014
FUM (millions)	AU$18.7
Fund Overview	Quay is a boutique investment management business established in 2013 with a focus on preserving and creating wealth for investors through investments in real estate securities. Quay uses a dual manager approach to the investment and portfolio management decision making process. This involves both Principals collaborating to determine significant portfolio investments and positions. 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	The end of July represented a significant milestone for the Bennelong Quay Global Real Estate Fund, bringing up their three-year track record. The Fund has outperformed its benchmark (FTSE/EPRA NAREIT Developed Index Net TR AUD) consistently since inception, with an annualised return of +14.4% p.a. against its benchmark which has risen by +9.4% p.a. over the same period. Although the Fund fell by -1.3% for the month, it outperformed its benchmark by +0.8%. Approximately +1.6% of the Fund's performance was derived from underlying investments, while the stronger AUD detracted -2.8%. The Manager notes that the RBA's discussion of a neutral cash rate of 3.5% contributed to the strength of the Australian dollar. The biggest positive contributors include Brixmor (US Retail), Hispania (Spain Diversified) and CyrusOne (US Data Centres), while the biggest detractors for the month were Ventas (US Healthcare), Pure Industrial (Canada Industrial) and Mid America Apartments (US Multi-family).
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Bennelong Kardinia Absolute Return Fund

22 Aug 2017 - Australian Fund Monitors

The Bennelong Kardinia Absolute Return Fund was weighed down by its exposure to companies with significant offshore earnings in July.

22 Aug 2017 - Bennelong Kardinia Absolute Return Fund

By: Australian Fund Monitors

Report Date	22 August 2017
Manager	Kardinia Capital, A Bennelong boutique
Fund Name	Bennelong Kardinia Absolute Return Fund
Strategy	Equity Long/Short
Latest Return Date	July 2017
Latest Return	-0.65%
Latest 6 Months	1.25%
Latest 12 Months	-0.68%
Latest 24 Months	3.06%
Annualised Since Inception	10.74%
Inception Date	01 May 2006
FUM (millions)	AU$293
Fund Overview	The Fund consists of a concentrated long/short portfolio typically comprising 20 to 50 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. On average since inception the Fund's exposure has averaged 40% net long. There is a slight bias to large cap stocks on the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. 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 Bennelong Kardinia Absolute Return Fund fell 0.65% in July, weighed down by its exposure to companies with significant offshore earnings. Since inception in May 2006, the Fund has gained 10.74% p.a. against the ASX300 Accumulation Index which has risen 3.89% p.a. over the same period. The Manager notes that the selloff in 'offshore earners' during the month was influenced by the strong rally in the A$ after the RBA suggested the neutral cash rate was 3.5%. Positive contributors to performance included BHP (+0.35%), JB Hi-Fi (+0.29%), South32 (+0.17%) and RCR Tomlinson (+0.12%). Detractors included Aristocrat Leisure (-0.34%) and Amcor (-0.17%), both of which were impacted by the strong A$/US$, as well as James Hardie (-0.14%) and Oil Search (-0.13%). The Fund's short positions outperformed the long positions with Asaleo Care, Telstra and Westfield all making solid contributions. Net equity market exposure including derivatives increased from 55.4% to 60.4% (65.8% long and 5.4% short) as the Manager increased the Fund's holdings in Bluescope, JB Hi-Fi and three of the four major banks (CBA, ANZ & NAB).
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4D Global Infrastructure Fund

21 Aug 2017 - Australian Fund Monitors

The Bennelong 4D Global Infrastructure Fund has risen 2.45% over the past 3 months, outperforming their benchmark (OECD G7 Inflation Index +5.5%) by +0.37%.

21 Aug 2017 - 4D Global Infrastructure Fund

By: Australian Fund Monitors

Report Date	21 August 2017
Manager	4D Infrastructure, A Bennelong Boutique
Fund Name	4D Global Infrastructure Fund
Strategy	Infrastructure
Latest Return Date	July 2017
Latest Return	-0.84%
Latest 6 Months	16.76%
Latest 12 Months	7.71%
Latest 24 Months
Annualised Since Inception	13.59%
Inception Date	07 March 2016
FUM (millions)	AU$8.72
Fund Overview	The 4D Global Infrastructure Fund aims to outperform the OECD G7 Inflation Index +5.5% p.a. over the long term by identifying quality listed global infrastructure securities, trading at or below fair value with sustainable, growing earning combined with sustainable, growing dividends. The fund will be managed as a single portfolio of listed global infrastructure securities including regulated utilities in gas, electricity and water, transport infrastructure such as airports, ports, road and rail as well as communication assets such as the towers and satellite sectors. The portfolio is intended to have exposure to both developed and emerging market opportunities, with country risk assessed internally before any investment is considered. The maximum absolute position of an individual stock is 7% of the fund.
Manager Comments	While the Bennelong 4D Global Infrastructure Fund fell -0.84% in July and outperformed the FTSE 50/50 Infrastructure Index by +0.33%, since inception in March 2016 the Fund has increased by +13.74% per annum. July's negative performance can largely be attributed to the strength of the A$, which was up 4% in the month. With only 6% of the Fund held in A$, the strength of the currency negatively impacted more than 90% of the portfolio. The Fund's weakest performer for July was US rail operator Norfolk Southern (-7.5%), however, the Manager continues to see fundamental value in this investment. The Fund remains overweight in European user pays and emerging markets, but Bennelong have been reallocating some profits from those regions to increase exposure to quality names in North America which have underperformed year to date. Bennelong's outlook for global listed infrastructure is positive over the medium term, noting that 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, meaning that there will be an increasing need for private sector capital as part of the funding solution. Bennelong believes that new, improved and expanded infrastructure around the world will be compelled by the world's growing population which will be accompanied by an emerging middle class, particularly in Asia.
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Cyan C3G Fund

21 Aug 2017 - Australian Fund Monitors

The Cyan C3G Fund rose +2.3% in July, outperforming the ASX Small Industrials Accumulation Index by +2.5%.

21 Aug 2017 - Cyan C3G Fund

By: Australian Fund Monitors

Report Date	21 August 2017
Manager	Cyan Investment Management
Fund Name	Cyan C3G Fund
Strategy	Equity Long
Latest Return Date	July 2017
Latest Return	2.30%
Latest 6 Months	8.35%
Latest 12 Months	7.81%
Latest 24 Months	53.52%
Annualised Since Inception	25.42%
Inception Date	24 July 2014
FUM (millions)	AU$15
Fund Overview	The Cyan C3G Fund operates as a wholesale unregistered managed investment scheme under a unit trust structure. The Fund primarily invests in ASX listed companies outside the ASX 100 and typically holds between 15-35 stocks. 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	The Cyan C3G Fund posted a strong result in July, returning +2.3% and delivering a milestone three year cumulative return of 25% p.a., exceeding the ASX Small Industrials Accumulation Index with lower volatility than any of the comparable ASX Indices. The monthly return was delivered in a volatile market with the Small Industrials retracing -0.2% by month's end, with a broad group of contributors to the positive return, and with the fund increasing positions in a number of core holdings while initiating some new ones. There were a handful of positions that fell slightly throughout the month, including MSL Solutions (MPW) and Skydive the Beach (SKB), but not significantly enough to materially impact the Fund's overall return. The Fund's portfolio is diversified across 24 individual holdings with no position accounting for more than 6.5% of the total. The stocks lie across 6 broad industry sectors including consumer staples and discretionary, industrials, health care, technology and financials with a weighted average market cap of approximately $250m.
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Fund Review: Bennelong Kardinia Absolute Return Fund July 2017

19 Aug 2017 - Australian Fund Monitors

Latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available.

Collins St Value Fund

18 Aug 2017 - Australian Fund Monitors

The Collins St Value Fund rose +4.72% in July, outperforming the flat ASX200 Total Return by +4.73%.

18 Aug 2017 - Collins St Value Fund

By: Australian Fund Monitors

Report Date	18 August 2017
Manager	Collins St Asset Management
Fund Name	Collins St Value Fund
Strategy	Equity Long
Latest Return Date	July 2017
Latest Return	4.72%
Latest 6 Months	5.70%
Latest 12 Months	19.99%
Latest 24 Months
Annualised Since Inception	20.96%
Inception Date	05 February 2016
FUM (millions)	AU$24.66
Fund Overview	The Collins Street Value Fund is an index unaware fund which seeks to create strong investment returns over the medium and long term with capital preservation a priority. 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 Collins St Value Fund rose +4.72% in July against a flat ASX200 Total Return. Over the past 12 months, the Fund has outperformed the ASX200 Total Return by +12.66% capturing 73.66% in positive months while providing positive performance when the market was negative. At the end of July, stocks in the Fund's portfolio had an average PE ratio of 8.88x versus that of the ASX200 which was 16.88x, indicating the Fund is continuing to trade in line with its objective. The portfolio's cash holdings decreased to 18% from 22% at the end of June. The Manager notes that they continue to be aware of market risks, with particular focus on tax changes on property for foreign investors and the effect of the removal of stamp duty concessions on the construction industry and property prices.
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Optimal Australia Absolute Trust

15 Aug 2017 - Australian Fund Monitors

Optimal's Australia Trust weathers currency headlines in July to record a return of +0.24% leading into reporting season...

15 Aug 2017 - Optimal Australia Absolute Trust

By: Australian Fund Monitors

Report Date	11 August 2017
Manager	ARCO Investment Management
Fund Name	Optimal Australia Absolute Trust
Strategy	Equity Long/Short
Latest Return Date	July 2017
Latest Return	0.24%
Latest 6 Months	2.32%
Latest 12 Months	3.51%
Latest 24 Months	12.20%
Annualised Since Inception	8.12%
Inception Date	15 September 2008
FUM (millions)	AU$117
Fund Overview	The investment objective of the Fund is to seek to achieve above average returns in absolute terms, through investing in listed securities in Australia and New Zealand, subject to the overarching requirement of capital preservation. Investments will predominantly be in equity securities but may include fixed interest instruments, money market instruments, derivatives and foreign exchange contracts. The Fund's bias is likely to be net long under normal market conditions, with the core strategy being to construct a portfolio of listed equity securities priced at levels that do not adequately reflect their underlying value. The Fund will seek to boost returns and limit potential market downside by selective short selling of individual stocks which are priced at levels that are viewed as materially above their underlying value. The Fund will also use certain trading strategies both within its core portfolio (through rebalancing stock weights and overall market exposure in response to price movements) and in certain other situations (typically of a shorter-duration and/or opportunistic nature) with the objective of further increasing returns.
Manager Comments	The Optimal Australia Absolute Trust recorded a positive return of 0.24% in July as the strong Australian dollar impacted the market, particularly stocks with offshore earnings. With the portfolio materially exposed to non-AUD earnings and asset values, it suffered from the strong rise in the local currency, which also hit the broader market. Meanwhile the manager's thinking has not changed much from recent months, citing a 'bubble of complacency' along with evidence of consumer mortgage stress (albeit only in certain demographic pockets) despite interest rates at generational lows, with the general consumer slow-down in the June quarter highlighting the broader sensitivity to interest rates. While generally not fans of the Australian consumer economy, the manager benefited from investments in several retail stocks where the discount to their fair value assessment seemed excessive, and where stock prices in the sector had been heavily influenced by short selling, and a deep fear that no local retail business model will survive Amazon's imminent arrival. The Fund's commodity and energy exposure, while small, also generated positive returns, particularly in the emerging lithium sector, while short positions (barring financials) also made a small positive net contribution to performance in July.
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MHOR Australian Small Cap Fund

14 Aug 2017 - Australian Fund Monitors

The MHOR Australian Small Cap Fund completes its first year of operation with a strong result of +4.95% for the month, and gaining 10.82% over three months...

14 Aug 2017 - MHOR Australian Small Cap Fund

By: Australian Fund Monitors

Report Date	14 August 2017
Manager	MHOR Asset Management
Fund Name	MHOR Australian Small Cap Fund
Strategy	Equity Long
Latest Return Date	July 2017
Latest Return	4.95%
Latest 6 Months	4.08%
Latest 12 Months	4.60%
Latest 24 Months
Annualised Since Inception	4.60%
Inception Date	01 August 2016
FUM (millions)	AU$17.5
Fund Overview	The MHOR Australian Small Cap Fund aims to outperform the S&P/ASX Small Ordinaries Accumulation Index over a rolling 5-year period after fees and expenses. The portfolio is made up of 25-75 stocks listed on the ASX or NZX. The fund may also invest in stocks to be listed within the next 12 months. The portfolio is constructed to achieve an aggregate exposure that delivers a growth profile that is materially above that of the broader market. The fund may hold between 0% - 50% of its assets in cash. 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	July produced a strong result to complete the Fund's first year of operations to return 4.60% over which time the Small Cap sector struggled and declined by -1.09%. As a result the Fund out-performed the small cap benchmark by 5.69%. Commenting on the positive result the Manager noted that in July small caps had outperformed large caps for the third consecutive month, and that the fund had gained 10.82% over the same three months. The Fund's stock holdings remained constant over the month at 31, and by month's end cash holdings were marginally higher at 9.2% of NAV. The portfolio continued to exhibit a growth bias and has considerable exposure to smaller undiscovered stocks, which the manager believes are the future growth stories. At the same time they continue to search and find interesting new and emerging small cap equity opportunities.
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Fund Review: Optimal Australia Absolute Trust July 2017

8 Aug 2017 - Australian Fund Monitors

Read the latest Fund Review on Optimal Australia Absolute Trust.

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News

4 Sep 2017 - Paragon Australian Long Short Fund

22 Aug 2017 - Quay Global Real Estate Fund

22 Aug 2017 - Bennelong Kardinia Absolute Return Fund

21 Aug 2017 - 4D Global Infrastructure Fund

21 Aug 2017 - Cyan C3G Fund

19 Aug 2017 - Fund Review: Bennelong Kardinia Absolute Return Fund July 2017

18 Aug 2017 - Collins St Value Fund

15 Aug 2017 - Optimal Australia Absolute Trust

14 Aug 2017 - MHOR Australian Small Cap Fund

8 Aug 2017 - Fund Review: Optimal Australia Absolute Trust July 2017

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