Fund Review: Bennelong Kardinia Absolute Return Fund

14 Aug 2013 - Australian Fund Monitors

AFM's updated Fund Review for BKARF, showing KPI's for July 2013 vs ASX200, Performance (net of fees) and Cumulative Performance since inception.

Pengana Australian Equities Fund

13 Aug 2013 - Australian Fund Monitors

The Pengana Australian Equities Fund returned 2.00% for July and 22.92% for the 12 months ended July.

13 Aug 2013 - Pengana Australian Equities Fund

By: Australian Fund Monitors

Report Date	12 August 2013
Manager	Pengana Capital
Fund Name	Pengana Australian Equities Fund
Strategy	Equity Long
Latest Return Date	July 2013
Latest Return	2.00%
Latest 6 Months	6.17%
Latest 12 Months	22.92%
Latest 24 Months	41.35%
Annualised Since Inception	13.10%
Inception Date	01 July 2008
FUM (millions)	AU$295
Fund Overview	The Fund invests in listed equities and seeks to hold a concentrated core portfolio of 15-20 listed stocks in outstanding businesses to provide capital preservation in real terms, and A$ returns of 12-15% p.a. compounded over the medium term time horizon. The Fund seeks to generate consistent investment returns using fundamental research to identify companies with competent management and resilient business models. The investment methodology is designed to profit from a focus on tax aware returns (both capital and income) generated by owning outstanding businesses at reasonable prices.
Manager Comments	The Pengana Australian Equities Fund returned 2.00% for July and now has an annualised return of 13.10% pa since inception in July 2008. As at 31st July, cash (including notes and preference shares) represented 28% of the Fund. The top five holdings by value were: DUET Group, ANZ Bank, Telstra, Resmed and the Caltex Group. The largest positive contributors to the month's performance came mainly from a rebound in those companies that were sold off in the prior two months. These included Duet Group, Seven West Media, Mermaid Marine and Telstra. The Fox Group (recently spun out of News Corporation) also represented a consistent positive contributor. After many years of significant and substantial gains, the McMillan Shakespeare share price fell sharply following the unexpected proposal by the Labor government to make a fundamental change to the fringe benefits tax legislation. While this impacted negatively on the Fund's monthly performance (by approximately -1%), the major portion of the Fund's holding had already been sold in prior months due to valuation concerns independent of this event. The Fund increased its existing holdings in Caltex, ANZ Bank, Resmed, Woolworths, CSL and McMillan Shakespeare with the latter occurring following the sharp sell-off during the month. The Fund's exposure to non-Australian dollar earnings streams (inclusive of companies with global earnings profiles such as Resmed and Fox Group, NZ based companies and US dollar exposure) stands at 21%. The Fund disposed of its holdings in Myer and APN.
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Optimal Australia Absolute Trust

12 Aug 2013 - Australian Fund Monitors

The Optimal Australia Absolute Trust returned 0.35% over July bringing it's since inception (September 2008) return to 11.11% pa.

12 Aug 2013 - Optimal Australia Absolute Trust

By: Australian Fund Monitors

Report Date	09 August 2013
Manager	Optimal Fund Management Australia
Fund Name	Optimal Australia Absolute Trust
Strategy	Equity Long/Short
Latest Return Date	July 2013
Latest Return	0.35%
Latest 6 Months	0.12%
Latest 12 Months	2.76%
Latest 24 Months	8.43%
Annualised Since Inception	11.11%
Inception Date	15 September 2008
FUM (millions)	AU$154
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 returned 0.35% over July bringing it's since inception (September 2008) return to 11.11% pa. The fund's risk statistics are notable. Downside capture ratios are -0.11, -0.12 and -0.22 over the last 12, 24 and 36 months respectively indicating that, on average, the fund has positive returns when the overall market is negative. Specifically, the fund has had positive monthly returns of 0.33%, 0.39% and 0.48% when the market is negative over the previous 12, 24 and 36 months. The Manager comments that it is certainly possible that equities will remain the 'best of a bad lot' from an asset allocation perspective, which may drive additional money flows and further price gains. However, in the Manager's view, equity valuations in Australia are essentially unattractive for a market which will likely follow any progressive, US-led normalisation of long bond rates, but which has vastly less certainty over earnings growth. There will always be opportunities for the fund at a stock level, especially through what appears likely to be a challenging earnings season. From this juncture ― featuring elevated volatility, high valuation, a questionable growth outlook, a risk that yield curve normalisation turns disorderly, and thus significant capital risk ― the Manager continues to favour a low net exposure, hedged approach to managing the fund's capital.
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Morphic Global Opportunities Fund

9 Aug 2013 - Australian Fund Monitors

The Morphic Global Opportunities Fund returned 7.71% during July and 41.16% over the previous twelve months.

9 Aug 2013 - Morphic Global Opportunities Fund

By: Australian Fund Monitors

Report Date	8 August 2013
Manager	Morphic Asset Management
Fund Name	Morphic Global Opportunities Fund
Strategy	Equity Long/Short
Latest Return Date	July 2013
Latest Return	7.71%
Latest 6 Months	22.68%
Latest 12 Months	41.16%
Latest 24 Months
Annualised Since Inception	41.16%
Inception Date	02 August 2012
FUM (millions)	AU$28
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	The Morphic Global Opportunities Fund returned 7.71% during July and 41.16% over the previous twelve months. The Fund's top contributors this month were a handful of individual stocks in a variety of countries, a basket trade in US financials, plus gains from the Manager's belief that the Australian dollar would continue to fall and that Australian and US short term interest rates would stay low for considerably longer than the market had been expecting. The main detractors to performance this month were reasonably small. The Manager had eased its way back into shoe manufacturer Crocs this month but exited again after the company made disappointing comments on its short term outlook. The Fund's Japanese home builder basket was also weak as initial results from companies in the sector proved to be lacklustre, and these shares have also now been sold. The Fund is fully invested and overweight in the US and Japan, although the latter overweight has been reduced. The Fund remains un-hedged into Australian dollars and has slowly increased its short position in the currency versus the US dollar and the Euro.
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Bennelong Long Short Equity Fund

9 Aug 2013 - Australian Fund Monitors

The Bennelong Long Short Equity Fund returned 3.52% during July and 13.89% over the previous 12 months.

Bennelong Kardinia Absolute Return Fund

7 Aug 2013 - Australian Fund Monitors

The Bennelong Kardinia Absolute Return Fund returned 1.31% during July bringing it's twelve month return to 15.20%.

7 Aug 2013 - Bennelong Kardinia Absolute Return Fund

By: Australian Fund Monitors

Report Date	06 August 2013
Manager	Kardinia Capital, a Bennelong Funds Management boutique
Fund Name	Bennelong Kardinia Absolute Return Fund
Strategy	Equity Long/Short
Latest Return Date	July 2013
Latest Return	1.31%
Latest 6 Months	6.52%
Latest 12 Months	15.20%
Latest 24 Months	19.36%
Annualised Since Inception	14.13%
Inception Date	01 May 2006
FUM (millions)	AU$76.3
Fund Overview	The Bennelong Kardinia Absolute Return Fund is an Australian domiciled equity long/short fund investing in ASX listed securities. The Fund uses some exchange traded call options and there is limited use of SPI futures contracts to hedge overall market risk. The Fund consists of a concentrated long/short portfolio typically comprising 30 to 40 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. There is a slight bias to large cap stocks in 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 10 to 15% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position.
Manager Comments	The Bennelong Kardinia Absolute Return Fund returned 1.31% during July bringing it's twelve month return to 15.20%. The since inception (May 2006) return is 14.13% pa. Global equity markets rallied strongly in July with the MSCI World Index up 5.2%. In the US, the Q2 reporting season began well and economic data continued to improve. Despite deteriorating domestic economic news and signs of slowing Chinese growth, the S&P/ASX 300 Accumulation Index rose 5.3%. The Bennelong Kardinia Absolute Return Fund rose 1.3% in July with limited Resources and small cap exposure contributing to a relatively disappointing month. CSL, EBOS, QBE Insurance and BHP Billiton performed strongly, whilst McMillan Shakespeare, Share Price Index futures contracts (hedging long positions) and Treasury Wine Estates were significant detractors from performance. Net equity market exposure (including derivatives) was progressively increased through the month to 50.8% (58.5% long and 7.7% short).
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AUI Wingate Global Equity Fund

6 Aug 2013 - Australian Fund Monitors

The Wingate Global Equity Fund returned 3.69% during June bringing the financial year performance for FY 13 to 29.79%.

6 Aug 2013 - AUI Wingate Global Equity Fund

By: Australian Fund Monitors

Report Date	05 August 2013
Manager	Wingate Asset Management
Fund Name	AUI Wingate Global Equity Fund
Strategy	Equity Income
Latest Return Date	June 2013
Latest Return	3.69%
Latest 6 Months	20.15%
Latest 12 Months	29.79%
Latest 24 Months	42.15%
Annualised Since Inception	6.97%
Inception Date	01 October 2005
FUM (millions)	AU$78
Fund Overview	The Wingate Global Equity Fund is a specialised global equities Fund investing in large cap, high quality companies using an investment process designed to reduce risk and generate income. The Fund primarily invests in global equities, either directly or via derivatives, to generate income from dividends and option premiums, and capital growth. Preservation of investors' capital is an overriding priority. The Fund typically has between 15 and 40 holdings (stock and options) and can invest 98% of its assets in international equities, including direct holdings in shares and option positions over shares, which are fully cash backed. The Fund restricts exposure to any individual company to a maximum of 10% of the net assets of the Fund. Cash that is not used to back option positions is restricted to a maximum of 20% of net assets of the Fund. The Fund's derivatives strategy primarily involves the selling of cash-backed put options to purchase stocks at a price in Wingate's fair price range but below current market price. The sale of the put option can result in either purchase of the stock at an acceptable price to Wingate, or the Fund receiving income in the form of the option premium. Importantly all option positions are fully backed by cash holdings and the Fund does not borrow to make investments. In addition, covered call options may be used to sell stocks that are held in the portfolio.
Manager Comments	The Wingate Global Equity Fund returned 3.69% during June bringing the financial year performance for FY 13 to 29.79%. On a monthly basis for the past 12 months, the portfolio captured 91% of the market's gain when the market was positive but only 54% when the market was negative. The Fund's performance benefited from strong stock selection in the US, offset by a lack of exposure to Japan and an under-weight position to European shares. The Fund's total return was also helped by the weakening US dollar. In a low-growth macro environment the portfolio has increased its exposure to companies returning significant amounts of capital through dividends or share-buy backs.
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Allard Investment Fund

5 Aug 2013 - Australian Fund Monitors

The Allard Investment Fund returned 0.2% during June and 17.65% for the 12 months to June 2013.

5 Aug 2013 - Allard Investment Fund

By: Australian Fund Monitors

Report Date	04 August 2013
Manager	Allard Partners Australia Pty Limited
Fund Name	Allard Investment Fund
Strategy	Equity Long
Latest Return Date	June 2013
Latest Return	0.20%
Latest 6 Months	8.39%
Latest 12 Months	17.65%
Latest 24 Months	18.52%
Annualised Since Inception	9.02%
Inception Date	01 July 2003
FUM (millions)	AU$130
Fund Overview	Allard Partners is an absolute return, long only security investor with a single mission to provide its clients with a net compound rate of return on their capital of 15% per annum over the long term. With offices in Hong Kong and Australia, Allard invests in quoted companies in the Asia Pacific region. Allard's investment approach has remained consistent throughout their history. That is to invest prudently but proactively in well-managed businesses that achieve superior returns on capital in industries with long-term growth potential. The Manager uses both broad top-down guidance and detailed bottom-up analysis to identify suitable markets, industries and companies. As long only investors, a critical factor in their performance has been their preparedness to hold cash when they cannot find companies that meet their criteria or are at a sufficient discount to their valuations.
Manager Comments	The Allard Investment Fund returned 0.2% during June and 17.65% for the 12 months to June 2013. Returns since inception (July 2003) are 9.02% annualised. The Fund was 71.4% invested with 28.6% held in cash and fixed income (allocated 14.8% of NAV in HK dollars, 4.0% of NAV in US dollars and 9.8% of NAV in Australian dollars). In terms of geographic breakdown HK/China was 33.4% of NAV, followed by Singapore at 13.4% and Korea at 11.2%. The Industry break-down was Financial Services 15.0% of NAV, Conglomerates at 12.6% and Telecommunications at 8.5%. The portfolio top five holdings were 38.9% of total NAV with the next five holdings at 16.3%.
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Monash Absolute Investment Fund

2 Aug 2013 - Australian Fund Monitors

The Monash Absolute Investment Fund was up 5.6% after fees in July, bringing the 12 month return to 23.4%.

Intelligent Investor Value Fund

1 Aug 2013 - Australian Fund Monitors

The Intelligent Investor Value Fund returned -0.69% over June and 36.89% over the financial year.

1 Aug 2013 - Intelligent Investor Value Fund

By: Australian Fund Monitors

Report Date	31 July 2013
Manager	Intelligent Investor
Fund Name	Intelligent Investor Value Fund
Strategy	Equity Long
Latest Return Date	June 2013
Latest Return	-0.69%
Latest 6 Months	19.90%
Latest 12 Months	36.89%
Latest 24 Months	47.49%
Annualised Since Inception	11.33%
Inception Date	17 October 2009
FUM (millions)	AU$31.8
Fund Overview	Intelligent Investor Funds Management places no emphasis on predicting short-term price movements or the direction of markets. The focus is on valuing securities and attempting to buy them for substantially less than their underlying value. The Intelligent Investor approach is to be patient, selective and only invest in opportunities where the gap between its estimate of value and the current security price is significant enough to compensate for the large degree of uncertainty inherent in valuing any security.
Manager Comments	The Intelligent Investor Value Fund returned -0.69% over June and 36.89% over the financial year. The Fund has an annualised return of 11.3% pa since inception (31 October 2009), more than double the 5.1% pa return of the All Ordinaries Index. The most significant contributors to performance were Vision Eye Institute, GBST and QBE while Astro Japan and UXC detracted from performance. The Manager notes that there are more stocks that usual in the Value Fund currently. The Fund has been buying small amounts of a number of mining and mining services business as the investment market for these stocks has capitulated, particularly in the last few weeks of June. Liquidity has been a problem once the Fund started buying share prices have often quickly moved against it and the Fund has no intention of establishing large positions in any of these stocks. But with some trading at significant discounts to net cash or huge discounts to net tangible assets and, in one particular example, less than 1.5 times earnings, the Manager's view is that a basket of them could perform well even if the worst China fears are realised. The number of holdings should remain under 20, but the Fund could end up with quite a few stocks in this space.
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Fund Monitors Pty Ltd

News

14 Aug 2013 - Fund Review: Bennelong Kardinia Absolute Return Fund

13 Aug 2013 - Pengana Australian Equities Fund

12 Aug 2013 - Optimal Australia Absolute Trust

9 Aug 2013 - Morphic Global Opportunities Fund

9 Aug 2013 - Bennelong Long Short Equity Fund

7 Aug 2013 - Bennelong Kardinia Absolute Return Fund

6 Aug 2013 - AUI Wingate Global Equity Fund

5 Aug 2013 - Allard Investment Fund

2 Aug 2013 - Monash Absolute Investment Fund

1 Aug 2013 - Intelligent Investor Value Fund

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