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Performance Report: Paragon Australian Long Short Fund
26 May 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +17.60% in April, outperforming the ASX200 Accumulation Index by +8.82% and taking annualised performance since inception in March 2013 to +6.72% versus the Index's 5.57%. The Fund has...
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26 May 2020 - 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 | Positive contributors for the Fund in April were across all of Paragon's gold and technology holdings. This was offset by a material write-down of iSignthis (ISX) taken by Paragon on 30 April as a result of ongoing legal proceedings and the adverse impact caused by the ASX suspension as evidenced in their 1Q20 result. The Fund's current median market cap is $1.0bn. Paragon noted compelling drivers for gold continued in April. Their view is that US$ gold will break new all-time highs in the short to medium-term. In their latest report, Paragon highlight that 4 of the 5 best performing ASX gold stocks since the 23 March 2020 bear market low are held by the Fund, including the top 2 - DeGrey and SKY. They also provide updates on three of their key gold holdings - Alacer, West African, and DeGrey's. |
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Performance Report: Australian Eagle Trust Long-Short Fund
25 May 2020 - Australian Fund Monitors
The Australian Eagle Long Short Fund rose in line with the market in April, returning +8.32%. The Fund has returned +14.26% p.a. since inception in July 2016 versus the ASX200 Accumulation Index's +5.77%.
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25 May 2020 - Performance Report: Australian Eagle Trust Long-Short Fund
By: Australian Fund Monitors
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| Manager Comments | Top contributors in April included long positions in Fortescue Metals Group, Oz Minerals and Altium. Key detractors included short positions in Virgin Money UK, Scentre Group and Boral Ltd. The Fund had 32 long and 25 short positions with largest exposure to medical devices & services and technology stocks. The Fund ended the month with relatively less exposure to banking and real estate stocks. Australian Eagle remains focused on taking long term positions in high quality growth companies with strong balance sheets that will be able to take advantage of weaker competitors once this downturn passes. |
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Performance Report: Insync Global Capital Aware Fund
25 May 2020 - Australian Fund Monitors
The Insync Global Capital Aware Fund rose +6.16% in April, outperforming AFM's Global Equity Index by +2.01% and taking annualised performance since inception in October 2009 to +11.46% versus the Index's +10.57%.
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25 May 2020 - Performance Report: Insync Global Capital Aware 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 | The Fund's focus on protecting investors' capital in falling markets is highlighted by the following statistics (since inception): Sortino ratio of 1.67 versus the Index's 1.21, average negative return of -1.69% versus the Index's -2.19%, and down-capture ratio of 57.4% which indicates that, on average, the Fund has fallen slightly more than half as much as the market during the market's negative months. The Fund's top 10 holdings as at the end of April included Facebook, Adobe, PayPal, Microsoft, Apple, Bristol-Myers Squibb, Roche, Domino's Pizza, Accenture and S&P Global. The top three megatrends by weighting in the portfolio at month-end were the 'Age related health solutions' megatrend (16%), the 'Digitisation' megatrend (13%) and the 'Cashless Society' megatrend (9%). |
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Performance Report: Harvest Lane Asset Management Absolute Return Fund
22 May 2020 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund rose +6.37% in April, taking annualised performance since inception in July 2013 to +4.66%. Gains were spread broadly across the portfolio. Harvest Lane noted spreads in many transactions narrowed...
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22 May 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Harvest Lane Asset Management employs a conservative, highly selective and opportunistic approach. Using their extensive knowledge in the area of corporate actions, the Fund's managers assess each opportunity based on a thoughtful, diligent and disciplined process and invest where they believe an opportunity exists to generate above average investment returns relative to the risk incurred. Investment decisions are made without speculating on market direction, with rigid risk controls enforced to minimise the risk of large losses of investor capital. The Fund invests in securities that are predominantly listed on the ASX and occasionally in those listed in other developed markets. Equity swaps and other derivatives may be used at times to reduce risk. The fund typically holds high levels of cash in the absence of sufficiently attractive opportunities to deploy investor capital in accordance with its objectives. |
| Manager Comments | Gains in April were spread broadly across the portfolio. Harvest Lane noted spreads in many transactions narrowed after the market dislocation observed in March. The manager believes spreads may have in part also benefited from a general risk-on sentiment across equity markets which were also strongly positive for the month. A strong gold price underpinned activity in Alto Metals and Ora Banda Mining, both of which contributed positively to the portfolio in April. Harvest Lane also noted the Fund's very cheap entry into Lotus Resources is also beginning to bear fruit as the uranium price awakens from its slumber for the first time in years. At month-end, the portfolio was mostly holding a combination of deeply discounted LIC's or cash proxies such as Salmat Ltd, MG Unit Trust and Onemarket Limited. |
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Performance Report: Bennelong Australian Equities Fund
22 May 2020 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +12.30% in April, outperforming the ASX200 Accumulation Index by +3.52%. Since inception in February 2009, the Fund has returned +12.32% p.a. versus the Index's +8.74%.
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22 May 2020 - 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 | The Bennelong Australian Equities Fund rose +12.30% in April, outperforming the ASX200 Accumulation Index by +3.52%. Since inception in February 2009, the Fund has returned +12.32% p.a. versus the Index's +8.74%. The Fund's up-capture and down-capture ratios for performance since inception, 126.55% and 96.34% respectively, highlight the Fund's capacity to outperform in both rising and falling markets. As at the end of April, the portfolio's weightings had been increased in the Discretionary, Materials, Industrials, Communication, REIT's and Financials sectors, and decreased in the Health Care sector. The Fund aims to invest in high quality companies with strong growth outlooks and underestimated earnings momentum. The portfolio's characteristics, as detailed in the latest report, indicate that the Fund is in line with its investment objective. |
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Performance Report: 4D Global Infrastructure Fund
21 May 2020 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +2.21% in April, outperforming its benchmark by +1.63% and taking annualised performance since inception in March 2016 to +9.40%. 4D continue to maintain a relatively high cash position awaiting core...
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21 May 2020 - 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 in April was US midstream operator Targa Resources (+89%) recovering some of its March losses. The weakest performer was US utility CMS (-2.8%). 4D expect utilities to offer relative resilient earnings over coming months as economic deterioration plays around the globe. 4D expect investors' focus to turn to not only the shape of the economic recovery but also whether the huge monetary and fiscal stimulus measures are inflationary as we move into phase 2 of the pandemic (as defined by the IMF). 4D noted the stimulus could lead to inflation if demand exceeds supply for a sustained period. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
20 May 2020 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund has returned +15.08% over the past 12 months and +5.03% p.a. since inception in December 2010. In April, the Fund's returns fell consistent with Gyrostat's guidance as market volatility fell...
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20 May 2020 - Performance Report: Gyrostat Absolute Return Income Equity Fund
By: Australian Fund Monitors
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| Fund Overview | The investment objective is to deliver regular and stable income stream (from ASX20 dividends) in a low interest rate environment with capital security - a 'highly-defensive' asset class. Gyrostat has operated for 37 consecutive quarters within a 'hard' pre-defined risk parameter (no more than 3% capital at risk with the Fund's maximum draw-down 2.2% in any circumstances) always in place, delivering regular income by passing through ASX-20 dividends, and meeting returns guidance based upon market conditions (demonstrating increasing returns with market volatility). The Fund buys and holds ASX-20 and international assets with lowest cost protection always in place with upside. It is a conservative asset allocation. Note that Gyrostat have expanded their international assets within the Fund to include SP500, FANGS, Nikkei, Hang Seng, MSCI China, MSCI Developed and Developing markets. Advances in investment risk management enable cost-effective protection to always be in place for a 'hard' defined risk parameter (say no more than 3% capital at risk). Returns are designed to increase as volatility levels increase, as this provides more opportunities to lower protection costs. Investment Objectives: - Returns: 6% - 8% pa in trending markets, greater than 8% pa in volatile markets, BBSW90 + 3% in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.0% p.a.) from dividends and franking credits - Protection: No quarterly NAV draw-downs exceeding 3% Also includes a 'tail hedge' for gains on large market falls. |
| Manager Comments | Gyrostat noted the market conditions in April allowed them to enter additional positions for more elevated returns on any uplift in market volatility. The Fund's investment strategy allows up to 15% of the Fund's assets to be invested in international assets with positions in S&P500, NASDAQ, Hang Seng, MSCI Developed and emerging markets (among others). Gyrostat anticipate increasing levels of 'late cycle' market volatility with elevated geopolitical tensions, historically high debt levels and elevated valuations. |
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Performance Report: Glenmore Australian Equities Fund
19 May 2020 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +16.63% in April, outperforming the ASX200 Accumulation Index by +7.85% and taking annualised performance since inception in June 2017 to +12.24% versus the Index's +2.96%.
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19 May 2020 - 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 | Glenmore noted the common theme in April across the vast majority of stocks in the Fund was a recovery from oversold positions at the end of March. While COVID-19 will clearly have had a very significant economic impact, Glenmore believe there are some early signs the business world can navigate this crisis. Following the bounce in stocks in April, the manager now sees earnings risks as more appropriately priced into stocks. Positive contributors in April included People Infrastructure, Dicker Data, Pinnacle Investment Management, Magellan Financial Group, NRW Holdings, Arena REIT, Integral Diagnostics and Charter Hall Social Infrastructure. There were no detractors of any materiality in the month. |
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Performance Report: Loftus Peak Global Disruption Fund
19 May 2020 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +7.00% in April, outperforming AFM's Global Equity Index by +2.85% and taking annualised performance since inception in November 2016 to +22.73% versus the Index's +12.25%.
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19 May 2020 - Performance Report: Loftus Peak Global Disruption Fund
By: Australian Fund Monitors
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| Fund Overview | The investment process involves a combination of top-down analysis with fundamental bottom-up qualitative and quantitative research to derive a risk-adjusted discounted cash flow (DCF) valuation of companies in the target universe. The investment team will generally buy stocks from the pool of securities that are trading below Loftus Peaks' valuation and sell them when they are trading above Loftus Peak's valuation. The approach allows for both fundamental accounting information as well as market-oriented inputs to be factored into the portfolio construction process. Loftus Peak's model typically does not rely on leverage to deliver investment returns and specifically takes into account risk in the valuation process. Capital preservation can be managed by holding up to 50% cash. Index and currency options and futures may also be used to manage risk. |
| Manager Comments | In their latest report, Loftus Peak highlight the acceleration of the move towards digitisation seen over the past three months as a result of the COVID-19 pandemic. They noted that, while this has been in train for twenty years, the virus has forced significant additional adoption of digital tools to facilitate work, banking, shopping and entertainment. They expect a good number of these practices to stick post-pandemic. This in turn has driven very strong growth in revenues for a number of Loftus Peak's well-placed investee companies. Top contributors in April included Roku, Amazon and Qualcomm. Key detractors included BlackBerry, Alibaba and Baidu. The Australian dollar appreciated +7.0% over the month against the US dollar which decreased the value of the Fund's US dollar positions. As at 30 April 2020, the Fund carried a foreign currency exposure of 95%. The Fund ended the month 91% invested in 24 holdings with the balance in cash. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
18 May 2020 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +12.04% in April, outperforming the ASX200 Accumulation Index by +3.26%. Since inception in February 2009, the Fund has returned +15.03% p.a. versus the Index's +8.74%.
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18 May 2020 - 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 | As at the end of April, the portfolio's weightings had been increased in the Discretionary, Materials, Industrials, REIT's and Financials sectors, and decreased in the Health Care and Consumer Staples sectors. The Fund's aim is to invest in a concentrated portfolio of high quality companies with strong growth outlooks, underestimated earnings momentum and underestimated prospects. By comparison with the Fund's benchmark (ASX300 Accumulation Index), the portfolio's holdings, on average, have a higher return on equity, lower debt/equity, higher sales growth, higher EPS growth, higher price/earnings and lower dividend yield which collectively indicate that the Fund is in line with its investment objectives. |
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