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Performance Report: Bennelong Concentrated Australian Equities Fund
17 Jun 2020 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +6.32% in May, outperforming the ASX200 Accumulation Index by +1.96% and taking annualised performance since inception in February 2009 to +15.54% versus the Index's +9.08%.
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17 Jun 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 May, the portfolio's weightings had been increased in the Discretionary, Materials and Industrials sectors, and decreased in the Health Care, Consumer Staples, REIT's and Financials sectors. The Fund aims 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 together indicate that the Fund is in line with its investment objectives. |
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Performance Report: 4D Global Infrastructure Fund
17 Jun 2020 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +4.98% in May, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +4.33% and taking annualised performance since inception in March 2016 to +10.46% with an annualised volatility of 12.41%.
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17 Jun 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 for May was US midstream operator Targa Resources, up +38% rebounding from a very oversold position following the March double shock of commodity price declines and COVID-19. The weakest performer was Mexican tower operator Telesites, down -9.9%. 4D noted Telesites held up remarkably well during the March sell-off and expect the May correction was attributable to both rebalancing and an increase in Mexican sovereign risk as the government interferes in the energy sector. 4D continue to maintain a relatively high cash position awaiting core economic data and stabilisation of the contagion as they look to capitalise on the opportunities currently on offer. |
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Performance Report: NWQ Fiduciary Fund
17 Jun 2020 - Australian Fund Monitors
The NWQ Fiduciary Fund rose +2.31% in May, taking annualised performance since inception in May 2013 to +4.83% with an annualised volatility of 5.57%. By contrast, the ASX200 Accumulation Index has returned +5.95% p.a. with an annualised...
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17 Jun 2020 - Performance Report: NWQ Fiduciary Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund aims to produce returns after management fees and expenses of RBA Cash Rate + 4.0-5.0% p.a. over rolling five-year periods. Furthermore, the Fund aims to achieve these returns with volatility that is a fraction of the Australian equity market, in order to smooth returns for investors. |
| Manager Comments | The Fund has hedged out 70% of the fall in the Australian market for the calendar year (-3.64% for the Fund vs -12.70% for the market). NWQ believe the Fund is well positioned for a full recovery. The Fund's recovery began in April and continued in May with the Alpha managers taking advantage of both relative value opportunities and corporate activity. NWQ expect these sources of alpha to persist as the Australian economy reopens and businesses and consumers come to terms with the 'new normal'. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
16 Jun 2020 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund returned +0.73% in May, taking annualised performance since inception in May 2006 to +8.58% with an annualised volatility of 7.18%. By contrast, the ASX200 Accumulation Index has returned +5.13%...
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16 Jun 2020 - Performance Report: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | 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 | Top contributors for May included Saracen, James Hardie, Pointsbet, Ramelius and Appen. Key detractors included NAB, CSL, Jumbo Interactive and Sydney Airport. The Fund's Short Book detracted -185bp from performance due to the strong rally in the market. Kardinia also participated in a significant number of capital raisings/placements during the month, including Qube, Elmo Software, Megaport, Incitec Pivot, Breville Group, Bigtincan and Decmil. The Fund's net equity market exposure was increased from 43.3% to 71.3% (95.3% long and 24.0% short), with the key changes being a significant increase in the Fund's banking exposure (CBA, NAB) as well as technology, resources and oil stocks. Kardinia believe the recent lifting of restrictions across the nation and the magnitude of the stimulus provided offer significant short-term positives, however, they don't believe the recent rally represents a new bull market. Their view is that volatility will remain high and that a new bull market is several years away. They expect the market to trade in a broad range until the outcome of the US election is known. |
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Performance Report: Glenmore Australian Equities Fund
15 Jun 2020 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +9.64% in May, outperforming the ASX200 Accumulation Index by +5.28% and taking annualised performance since inception in June 2017 to +15.36% versus the Index's +4.35%.
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15 Jun 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 | Top contributors in May included Moelis Australia, Alliance Aviation Services, People Infrastructure, NRW Holdings, Fiducian Group, Magellan Financial Group, Integral Diagnostics, Dicker Data and Mineral Resources. There were no detractors of any materiality during the month. Glenmore's view is that, despite the recession, there still exist stocks where the fall in price has been excessive relative to its long term valuation. Glenmore's initial take on recent earnings updates from ASX companies is that the earnings impact of COVID-19 is not going to be as severe as the fall in stock prices in February and March implied. They noted that, while not underplaying the significance of COVID-19's impact on the economy, they don't believe it is sufficiently negative to derail the earnings growth prospects of high quality businesses. Glenmore remain comfortable with the portfolio's composition. |
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Performance Report: PURE Income and Growth Fund
12 Jun 2020 - Australian Fund Monitors
The PURE Income and Growth Fund returned +5.7% in May. The Fund has now fully recovered the COVID-19 drawdown and is +6.1% CYTD. Since inception in December 2018, the Fund has returned +20.3% on a cumulative basis.
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12 Jun 2020 - Performance Report: PURE Income and Growth Fund
By: Australian Fund Monitors
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| Fund Overview | For fund investors, The Income and Growth Fund offers a unique risk/return profile. This form of investing includes a high yield, yet retains equity exposure to successful growth stories. Furthermore, the Fund's superior position in the investee Company's capital structure insulates investors from capital loss. PURE targets a return of 15% per annum through a mixture of Income (8-9%) and capital growth. While most investments involve ASX listed companies, the fund mandate retains modest flexibility to capitalise on attractive pre-IPO opportunities. |
| Manager Comments | PURE is now actively engaged in deal origination as the Australian economy begins to unfreeze. They noted that, while COVID-19 has been a difficult period for most, there are still good businesses out there with meaningful growth opportunities. The investment team is assessing business models that have experienced minimal disruption from the lockdown. The team is pleased with how the portfolio has performed throughout a very difficult 2020 year-to-date and are excited by the quality of opportunities under review. |
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Performance Report: Bennelong Long Short Equity Fund
11 Jun 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund returned +0.22% in May, taking 12 month performance to +29.06% and the Fund's annualised return since inception in February 2002 to +15.43%. By contrast, the ASX200 Accumulation Index has returned...
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11 Jun 2020 - 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 | Positive returns in May were broadly spread across sectors whilst negative returns were concentrated in Healthcare and Consumer, specifically in the three bottom pairs. The top pairs for the month were long TPG Telecom / short Telstra, long Pointsbet/Crown / short SkyCity, and long Xero / short TechnologyOne. The bottom three pairs were long ResMed / short Ansell, long CSL / short Sonic Healthcare, and long JB Hi-Fi / short Super Retail. Bennelong noted the enormous bond purchases by central banks has helped stimulate a 'risk on' environment in share markets since the lows of March which can present a headwind for the portfolio. |
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Performance Report: Gyrostat Absolute Return Income Equity Fund
9 Jun 2020 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund returned +0.77% in May, taking annualised performance since inception in December 2010 to +5.07%. Over the past 12 months, the Fund has returned +10.15% against the ASX200 Accumulation Index's -6.70%.
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9 Jun 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 | The market conditions in May enabled Gyrostat to enter additional positions for more elevated returns on any uplift in market volatility. The investment strategy allows for 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 returns in all market environments of at least BBSW 90 +3% with 'left' tail in case of large market falls. Gyrostat anticipate increasing levels of 'late cycle' market volatility with geopolitical tensions elevated, historically high debt levels, and elevated valuations. |
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Performance Report: Paragon Australian Long Short Fund
5 Jun 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +21.4% in May, outperforming the ASX200 Accumulation Index by +17.04% and taking annualised performance since inception in March 2013 to +9.53% versus the Index's +6.13%.
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5 Jun 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 | The Paragon Australian Long Short Fund rose +21.4% in May, outperforming the ASX200 Accumulation Index by +17.04% and taking annualised performance since inception in March 2013 to +9.53% versus the Index's +6.13%. The Fund's down-capture ratio of 68.74% for performance since inception indicates that, on average, the Fund has outperformed during the market's negative months since it began. Positive contributors in May came from the Fund's gold and technology holdings. Paragon maintain the view that the 1Q20 bear market is likely to prove cyclical, comparing most closely to the cyclical bear market crash of 1987 which was followed by the resumption of a secular bull market. Paragon are excited about the opportunities within their thematics and noted they are fully invested to capitalise. They also continue to find lucrative gold-equities which they expect to emerge as the next market leaders. In their latest report, Paragon share their views on Pointsbet. They exited their profitable position in Pointsbet ahead of the March sell-off and took the opportunity to buy back in April at a materially lower price point. In the near-term, they see Pointsbet entering a positive catalyst cycle with the US national sports leagues progressively commencing, product (sports betting and iGaming) rolling out across more states, and further state access agreements to be executed. |
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Performance Report: Datt Capital Absolute Return Fund
4 Jun 2020 - Australian Fund Monitors
The Datt Capital Absolute Return Fund rose +9.22% in May, outperforming the ASX200 Accumulation Index by +4.86% and taking annualised performance since inception in August 2018 to +8.24% versus the Index's -0.55%. The Fund has outperformed...
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4 Jun 2020 - Performance Report: Datt Capital Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Our investment objectives are: 1) To minimise the risk of permanent capital loss 2) Generate a net return of 10% through the economic cycle An unconstrained, concentrated approach focused on superior risk-adjusted returns. The investment strategy: - targets long-term capital growth in a prudent manner, with an emphasis on capital preservation and low volatility in returns - aims to outperform in markets where equities are down - diversifies investments across asset classes and duration to reduce risk while maintaining relatively concentrated exposure to attractive investment opportunities - is an application of the Manager's investment process, that has no institutional constraints and is completely benchmark unaware |
| Manager Comments | The Fund's CRE debt portfolio continues to perform to Datt Capital's expectations. They noted their focus on short duration, low LVR and double-digit yielding deals restricted to the core Australian cities (Sydney and Melbourne) continue to bear fruit. The Fund's equity portfolio also performed well in May. Datt Capital noted they continue to find and exploit inefficiently priced opportunities in the market. Looking forward, they are expecting a weak month for equities in June as Australia continues to reopen society, and the social and economic impact of the lockdown is gradually revealed. |
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