Fund Review: Morphic Global Opportunities Fund March 2016

13 Apr 2016 - Australian Fund Monitors

Read the latest March Fund Review on Morphic Global Opportunities Fund.

Optimal Australia Absolute Trust

13 Apr 2016 - Australian Fund Monitors

Optimal Australia Absolute Trust recorded a positive 2.3% return in March.

13 Apr 2016 - Optimal Australia Absolute Trust

By: Australian Fund Monitors

Report Date	11 April 2016
Manager	Optimal Fund Management Australia
Fund Name	Optimal Australia Absolute Trust
Strategy	Equity Long/Short
Latest Return Date	March 2016
Latest Return	2.34%
Latest 6 Months	5.55%
Latest 12 Months	12.59%
Latest 24 Months	13.16%
Annualised Since Inception	9.20%
Inception Date	15 September 2008
FUM (millions)	AU$100
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	Optimal Australia Absolute Trust recorded a positive 2.3% return in March, against the ASX200 Accumulation Index's 4.73%. Since inception, the Fund has an annualised return of 9.20% p.a. (Index 4.5% p.a.), which has been achieved with relatively low volatility of 3.64% p.a. (Index 14.52% p.a). During March, the Fund had solid gains from their high-conviction longs in the retail, media and utility sectors. The hedging through short exposure was not too expensive, with loss attribution of around 0.70% arising almost solely from index futures - the stock shorts broke even for the month. The Fund's stock selection worked extremely well, however the net short through the month, detracted from the returns. At month-end, the Fund's gross exposure was at 72% and net at -15%. Click below to read the latest Fund monthly report.
More Information	Fund Profile Manager's Report

Bennelong Kardinia Absolute Return Fund

12 Apr 2016 - Australian Fund Monitors

The Bennelong Kardinia Absolute Return Fund rose
0.30% in March.

12 Apr 2016 - Bennelong Kardinia Absolute Return Fund

By: Australian Fund Monitors

Report Date	11 April 2016
Manager	Kardinia Capital, A Bennelong boutique
Fund Name	Bennelong Kardinia Absolute Return Fund
Strategy	Equity Long/Short
Latest Return Date	March 2016
Latest Return	0.30%
Latest 6 Months	0.32%
Latest 12 Months	-0.35%
Latest 24 Months	8.79%
Annualised Since Inception	11.83%
Inception Date	01 May 2006
FUM (millions)	AU$269.31
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 rose 0.30% in March, compared to the ASX 200 Total Return Index, which returned 4.73%. Since inception in May 2006, the Fund has an annualised performance of 11.83% p.a, compared to the Index's 4.20% p.a. The Fund has achieved this performance with lower volatility of 7.33% than that of the Index (14.27%), to give notable Sharpe and Sortino ratio of 1.02 (Index 0.08) and 1.86 (Index 0.01) respectively. Beadell, BHP and Aconex were all significant contributors to performance, whilst Share Price Index Futures (hedging long positions) and long positions in Caltex and Northern Star were the major detractors. Net equity market exposure including derivatives decreased to 22.6% (43.1% long and 20.5% short) Click below to read the latest Fund Report.
More Information	Fund Profile Manager's Report AFM Research Reports

Fund Review: Meme Australian Share Fund March 2016

12 Apr 2016 - Australian Fund Monitors

March Fund Review is now available on Meme Australian Share Fund, that invests in ASX listed securities outside of the S&P/ASX20.

Fund Review: Supervised High Yield Fund February 2016

11 Apr 2016 - Australian Fund Monitors

Fund review on Supervised High Yield Fund, a fixed income fund, is now available.

11 Apr 2016 - Fund Review: Supervised High Yield Fund February 2016

By: Australian Fund Monitors

SUPERVISED HIGH YIELD FUND

Attached is AFM's updated Fund Review on the Supervised High Yield Fund.

We would like to highlight the following aspects of the Fund:

The Supervised High Yield Fund (SHYF) has a 6 year track record investing in fixed interest investments. The Investment strategy aims to deliver returns with zero correlation to equity markets by investing in debt securities with minimal default probability and offering a premium return above the risk free rate.
The Fund is managed by Philip Carden whose experience in debt and capital markets spans over 33 years, including time with JB Were's Capel Court Securities and Macquarie Bank, where he was the Executive Director responsible for the Debt Markets Division.
SHYF is an Alternative Income fund which invests in Global and Australian debt markets, with all foreign currency receivables hedged back to Australian dollars.
The Fund utilises a top down analysis of the economic environment and market to screen and identify debt market opportunities which it believes offer low risk with high yield. The next stage is the development of a risk matrix and investment strategy, following which detailed research is undertaken on specific investment opportunities which meet the pre-defined criteria established in the investment strategy.
Prior to approving an investment for the Fund each potential investment is subject to two stress tests. The first of these is for credit and default risk, in which the investment is stress-tested to ensure that in a worst case economic environment it can repay 100% of its principal and interest obligations case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided The second test examines market risk. In this case Carden looks at the worst case scenario for the asset by examining the highest margin over the risk rate that the investment has previously experienced in a crisis situation. Any decline in value under the stress test that exceeds 10% of the Fund's value is avoided.

Australian Fund Monitors

ATTACHED FILES

Supervised High Yield Fund AFM Review February 2016 (pdf format)

The Paragon Fund

11 Apr 2016 - Australian Fund Monitors

The Paragon Fund returned +7.4% after fees for the month of March 2016.

11 Apr 2016 - The Paragon Fund

By: Australian Fund Monitors

Report Date	08 April 2016
Manager	Paragon Funds Management
Fund Name	The Paragon Fund
Strategy	Equity Long/Short
Latest Return Date	March 2016
Latest Return	7.40%
Latest 6 Months	7.01%
Latest 12 Months	8.36%
Latest 24 Months	28.98%
Annualised Since Inception	17.13%
Inception Date	28 February 2013
FUM (millions)	AU$39.2
Fund Overview	The Paragon 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 Fund returned +7.4% after fees for the month of March 2016. Since inception the Fund has an annualised return of 17.13% p.a. vs the Index's 4.46% p.a. The Fund has a notable Sharpe and Sortino ratios of 1.20 (Index 0.22) and 2.29 (Index 0.23) respectively. Key positive contributors for March included longs in the lithium holdings, Netcomm Wireless, Aconex, Mayne Pharma, and the gold holdings. Short positions in Westpac and 1-Page also contributed. At the end of the month the Fund had 33 long positions and 12 short positions. Click below to read the latest monthly report.
More Information	Fund Profile Manager's Report

Bennelong Long Short Equity Fund

8 Apr 2016 - Australian Fund Monitors

Bennelong Long Short Equity Fund returned -6.73% for the month of March.

8 Apr 2016 - Bennelong Long Short Equity Fund

By: Australian Fund Monitors

Report Date	07 April 2016
Manager	Bennelong Long Short Equity Management, a Bennelong boutique
Fund Name	Bennelong Long Short Equity Fund
Strategy	Equity Market Neutral
Latest Return Date	March 2016
Latest Return	-6.73%
Latest 6 Months	4.37%
Latest 12 Months	22.71%
Latest 24 Months	21.56%
Annualised Since Inception	17.81%
Inception Date	01 January 2003
FUM (millions)	AU$334
Fund Overview	Bennelong Long Short Equity Management applies a qualitative stock selection process to construct a diversified portfolio of paired securities based on relative value. The Bennelong Long Short Equity Management strategy invests primarily in the S&P/ASX 100 and is dollar neutral at cost. 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.
Manager Comments	Bennelong Long Short Equity Fund returned -6.73% for the month of March. Long term performance since inception, remains strong with annual returns of 17.81% p.a. (Index 7.35% p.a.) and a volatility of 11.99% (Index 13.03%). The Fund has notable Sharpe and Sortino ratios of 1.08 (Index 0.28) and 1.82 (Index 0.29). The short book drove the under-performance with a negative return contribution approximately twice the size of the positive return generated from the long book. By way of pairs, loss-making pairs outnumbered profitable ones, again by a ratio of about two to one. The short book showed that across the top 10 losing positions in March, all of the price action was driven by sentiment and liquidity factors as opposed to fundamental earnings. The Fund's investment philosophy has always centred upon fundamentals and therefore have not responded to the events of March with any notable portfolio changes. Click below to read the Fund Manager's commentary and market outlook.
More Information	Fund Profile Manager's Report AFM Research Reports

Morphic Global Opportunities Fund

8 Apr 2016 - Australian Fund Monitors

Morphic Global Opportunities Fund fell 0.41% in March, underperforming its benchmark (MSCI AC World Total Return in Australian Dollars), which fell 0.27%, by 0.14%.

8 Apr 2016 - Morphic Global Opportunities Fund

By: Australian Fund Monitors

Report Date	07 April 2016
Manager	Morphic Asset Management
Fund Name	Morphic Global Opportunities Fund
Strategy	Equity Long/Short
Latest Return Date	March 2016
Latest Return	-0.41%
Latest 6 Months	-4.50%
Latest 12 Months	-4.82%
Latest 24 Months	24.80%
Annualised Since Inception	18.57%
Inception Date	02 August 2012
FUM (millions)	AU$120
Fund Overview	The Fund will primarily consist of Global listed shares, and will generally have at least 50% of its net assets invested in these. It may also have short positions in shares that the Manager believes are over-valued, and likely to fall in price, as well as long and short positions in index futures and other derivatives, fixed interest instruments, commodities, credit instruments and currencies.
Manager Comments	Morphic Global Opportunities Fund fell 0.41% in March, underperforming its benchmark (MSCI AC World Total Return in Australian Dollars), which fell 0.27%, by 0.14%. The Fund has an annualised return since inception of 18.57% p.a., with notable Sharpe and Sortino ratios of 1.57 and 3.42 respectively. The best gain came from the Fund's three long short pairs in Japanese retail. Drugstore chains Tsuruha and Kusuri No Aoki outperformed the overall stock market and the over-priced, exgrowth drugstore chain Cosmos, while Tokyo regional supermarket chain Yaoko also beat the struggling but expensive giant retail conglomerate Aeon. In Australia, the Fund made money being long in Fortescue and short in Woolworths. The biggest loser was US banking giant Wells Fargo. The Fund continues to remain fully invested and grow their over-weight position to emerging markets and US Healthcare services, while reducing their overall exposure to US banks. Click below to read more.
More Information	Fund Profile Manager's Report AFM Research Reports

Supervised High Yield Fund

7 Apr 2016 - Australian Fund Monitors

Supervised High Yield Fund returned a positive 0.20% for the month of February, to bring annualised performance since inception to 9.39% p.a.

7 Apr 2016 - Supervised High Yield Fund

By: Australian Fund Monitors

Report Date	06 April 2016
Manager	Supervised Investments Australia Ltd
Fund Name	Supervised High Yield Fund
Strategy	Fixed Income
Latest Return Date	February 2016
Latest Return	0.20%
Latest 6 Months	1.00%
Latest 12 Months	4.11%
Latest 24 Months	9.78%
Annualised Since Inception	9.39%
Inception Date	01 April 2009
FUM (millions)	AU$19.234
Fund Overview	The Supervised High Yield Fund is an AUD denominated alternative income fund which invests only in debt securities. The investment objective of the fund is to outperform a benchmark of 1.5% above the RBA cash rate, whilst trying to minimise the risk of permanent loss of capital. The fund will invest in all forms of marketable floating and fixed income debt securities, such as asset backed debt securities, residential mortgage backed securities, corporate debt, regional and sovereign debt securities, debt/equity hybrid securities, equities and currencies. All these investments will be either listed or traded in a market where prices can be independently verified. The fund may also invest in interest rate swaps, options over authorized investments and exchange traded futures contracts. All these will be either listed or traded in a market where they can be independently valued. Fundamental to the investment procedure is the tenet that no debt security will qualify for investment unless it can repay 100% of its principal and interest in a worst case economic scenario.
Manager Comments	Supervised High Yield Fund returned a positive 0.20% for the month of February, to bring annualised performance since inception to 9.39% p.a. During the same time frame the RBA Cash Rate Index has returned 3.29% p.a. The Fund's performance has been achieved with a relatively low volatility of 2.10% (Index 0.27%), to give a notable Sharpe and Sortino Ratio of 2.86 and 18.37 respectively. More than half of the portfolio's composition (as a percentage of NAV) was invested in Residential Mortgage-Backed Securities (RMBS) 61.29%. The rest of the portfolio composition was in USD Corporate Loans at 21.68%, Cash at 12.46% and AUD Corporate Loans at 4.57%. The Fund Manager believes that individual valuation prices should follow recent market price activity pointing to improved performance in the period ahead for the type of assets held in the Supervised High Yield Fund. During the first half of March 2016 the reversals in price direction have continued with Treasury Bonds selling off whilst Corporate notes and bonds have been increasing in value along with commodities and equities. Click below to view the latest Fund Manager Report.
More Information	Fund Profile Manager's Report AFM Research Reports

Meme Australian Share Fund

6 Apr 2016 - Australian Fund Monitors

The Meme Australian Share Fund rose 3.38% to take latest 12 months return to 9.20%.

6 Apr 2016 - Meme Australian Share Fund

By: Australian Fund Monitors

Report Date	05 April 2016
Manager	Meme Capital Management Pty Ltd
Fund Name	Meme Australian Share Fund
Strategy	Equity Long
Latest Return Date	March 2016
Latest Return	3.38%
Latest 6 Months	11.44%
Latest 12 Months	9.20%
Latest 24 Months	40.54%
Annualised Since Inception	16.00%
Inception Date	01 July 2013
FUM (millions)	AU$2.2
Fund Overview	The Meme Australian Share Fund uses a robust and back-tested quantitative trend-following strategy to identify investment opportunities expected to provide both positive price appreciation and relative price outperformance over the medium to long term. The Fund invests on a long-only basis and does not use derivatives. Meme's investment philosophy is logically derived from addressing our prime investment objectives of creating and preserving wealth. The philosophy therefore comprises elements which separately address investment returns and investment risks while at the same time respecting the interplay between them. The Fund's investment strategy seeks to identify low-risk entry opportunities and then build positions in these stocks. Once established in the portfolio, individual stock holdings are maintained for as long as their long-term upward trend remains intact and while they continue to make positive contributions to portfolio growth. Positions are reduced and ultimately closed out as their trends become exhausted or as their relative long-term performance against the broad market weakens. The Fund believes that longer time frame investments also provide a number of advantages. The effect of false signals and 'noise' which attend shorter term time frames is mitigated by only attending to signals which are confirmed by our longer term assessments. Also, the Fund gains exposure to the more expansive price trends which can last for months and years, allowing dividends and distributions received during this time to further enhance portfolio returns.
Manager Comments	The Meme Australian Share Fund rose 3.38% to take latest 12 months return to 9.20%. Since inception, the Fund has an annualised return of 16.00% p.a (Index 6.87% p.a.) with notable Sharpe and Sortino Ratios of 1.08 and 1.67 respectively. The top 5 positive contributors were Resapp Health, Galaxy Resources, Emerchants Limited, Altura Mining and General Mining, while the five most negative contributors were Collins Foods, Nagambie Resources, Blackham Resources, HUB24 Limited and Ramelius Resources. By month end the total number of portfolio stocks had fallen to 88 however the portfolio was virtually fully invested with cash sitting at less than 1%, reflective of the emergence of opportunities. The portfolio increased exposure to the Financials, Materials, Industrials, Property and Utilities sectors and decreased to the Energy, Consumer Staples and Information Technology sectors. Exposure to other sectors remained relatively stable. Click below to read the latest Fund Manager's commentary on the Fund.
More Information	Fund Profile Manager's Report AFM Research Reports

Fund Monitors Pty Ltd

News

13 Apr 2016 - Fund Review: Morphic Global Opportunities Fund March 2016

13 Apr 2016 - Optimal Australia Absolute Trust

12 Apr 2016 - Bennelong Kardinia Absolute Return Fund

12 Apr 2016 - Fund Review: Meme Australian Share Fund March 2016

11 Apr 2016 - Fund Review: Supervised High Yield Fund February 2016

11 Apr 2016 - The Paragon Fund

8 Apr 2016 - Bennelong Long Short Equity Fund

8 Apr 2016 - Morphic Global Opportunities Fund

7 Apr 2016 - Supervised High Yield Fund

6 Apr 2016 - Meme Australian Share Fund

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