NEWS
Performance Report: 4D Global Infrastructure Fund
30 Aug 2019 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +0.87% in July, taking annualised performance since inception in March 2016 to +14.29% with an annualised volatility of 9.26%.
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30 Aug 2019 - 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 portfolio performer for July was Brazilian toll road operator Ecorodovias which was up +9.5%. 4D noted this was note driven by stock specific news but rather the entire Brazilian infrastructure space was up as Bolsonaro executes on reforms. The weakest performer was US midstream operator Williams, down -12.1% on the back of concerns that key counterparties are cutting production targets which will flow through to Williams' volumes and earnings. 4D believe the sell-off was overdone. Despite a slowing global macro environment, 4D's view is that it remains supportive of the Fund's overweight to user pay assets. However, ongoing geopolitical issues see them avoiding certain markets until issues are resolved (e.g. Brexit). They are also seeing certain markets move ahead of fundamentals and have taken a more defensive stance in these regions, increasing their exposure to defensive yield stories. |
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Performance Report: Insync Global Capital Aware Fund
29 Aug 2019 - Australian Fund Monitors
The Insync Global Capital Aware Fund rose +4.07% in July, outperforming AFM's Global Equity Index by +1.20%. Over the past 12 months the Fund has returned +20.99% versus the Index's +11.87%.
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29 Aug 2019 - 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 | Insync noted strong stock selection was the key driver of the solid outperformance. Positive highlights during the month include London Stock Exchange, Intuit, Accenture, Apple and Visa. Detractors were Bristol-Myer Squibb, Heineken, Wirecard, TE Connectivity and PayPal. No currency hedging continues across both funds as Insync consider the main risks to the Australian dollar to be on the downside. Insync's view is that current market conditions continue to reflect the trend in place since the GFC of low growth and low inflation. They believe that if this trend continues then investing in a portfolio of high ROIC stocks benefitting from global megatrends should prevail. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
28 Aug 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +3.41% in July, outperforming the ASX200 Accumulation Index by +0.47%. Since inception in February 2009, the Fund has returned +16.41% p.a. versus the Index's annualised return of +11.26%.
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28 Aug 2019 - 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 July, the Fund's weightings had been increased in the Health Care, IT, Industrials, Communication, Materials and Financials sectors, and decreased in the Discretionary, REIT's and Consumer Staples sectors. Top holdings included CSL, BHP Billiton and Aristocrat Leisure. The Fund aims to invest in a concentrated portfolio of high quality companies with strong growth outlooks and underestimated earnings momentum and prospects. By comparison with the 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. This highlights that the Fund is in line with its investment objectives. |
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Performance Report: Quay Global Real Estate Fund
27 Aug 2019 - Australian Fund Monitors
The Quay Global Real Estate Fund returned +1.6% in July, driven in part by currency returns of +1.0%. Since inception in January 2016, the Fund has returned +10.60% per annum.
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27 Aug 2019 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | 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 | Quay noted the Fund's Hong Kong names have been buffeted by poor sentiment as a result of ratcheting trade wars and increasing protests in HK. They also added a new investee to the portfolio, American Homes for Rent (AMH), which is in the US single family sector. AMH owns a portfolio of 53,000 houses across the US that it rents to people seeking rental accommodation. |
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Fund Review: Insync Global Capital Aware Fund July 2019
27 Aug 2019 - Australian Fund Monitors
Latest Fund Review on Insync Global Capital Aware Fund is now available. The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend...
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27 Aug 2019 - Fund Review: Insync Global Capital Aware Fund July 2019
By: Australian Fund Monitors
AFM Fund Review - July 2019 (pdf format)
INSYNC GLOBAL CAPITAL AWARE FUND
Attached is our most recently updated Fund Review on the Insync Global Capital Aware Fund.
We would like to highlight the following:
- The Global Capital Aware Fund invests in a concentrated portfolio of 15-30 stocks, targeting exceptional, large cap global companies with a strong focus on dividend growth and downside protection.
- Portfolio selection is driven by a core strategy of investing in companies with sustainable growth in dividends, high returns on capital, positive free cash flows and strong balance sheets.
- Emphasis on limiting downside risk is through extensive company research, the ability to hold cash and long protective index put options.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - July 2019 (pdf format)
Performance Report: Bennelong Emerging Companies Fund
23 Aug 2019 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +9.58% in July, outperforming the ASX200 Accumulation Index by +6.64% and taking annualised performance since inception in November 2017 to +33.03% versus the Index's +13.04%.
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23 Aug 2019 - Performance Report: Bennelong Emerging Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may invest in securities expected to be listed on the ASX within 12 months. The Fund may also invest in securities listed, or expected to be listed, on other exchanged where such securities relate to ASX-listed securities |
| Manager Comments | The Fund's top five holdings as at the end of July included Eml Payments, Viva Leisure, Jumbo Interactive, BWX and Prospa. The Fund invests predominantly in micro and small-cap stocks listed on the ASX. It is managed via a research-intensive and predominantly bottom-up investment approach. The Fund focuses on high quality stocks an seeks to avoid the higher risk that usually comes with micro and small-cap stocks. |
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Performance Report: Loftus Peak Global Disruption Fund
23 Aug 2019 - Australian Fund Monitors
The Loftus Peak Global Disruption Fund rose +3.16% in July, outperforming AFM's Global Equity Index by +0.29% and taking annualised performance since inception in November 2016 to +22.58% versus the Index's +16.14%.
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23 Aug 2019 - 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 | Loftus Peak noted that while trade uncertainty has weighed on company earnings and market expectations, some of the Fund's positions still managed to deliver. Top contributors in July included Google, Apple and Tencent. Key detractors included Baidu, Qualcomm and Netflix. The Australian dollar depreciated -1.8% over the month against the US dollar, which meant the value of the Fund's US dollar positions increased. As at 31 July 2019, the Fund carried a foreign currency exposure of 99%. |
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Performance Report: Touchstone Index Unaware Fund
22 Aug 2019 - Australian Fund Monitors
The Touchstone Index Unaware Fund returned +3.61% in July, outperforming the ASX200 Accumulation Index by +0.67% and taking annualised performance since inception in April 2016 to +12.32%.
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22 Aug 2019 - Performance Report: Touchstone Index Unaware Fund
By: Australian Fund Monitors
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| Fund Overview | The portfolio is constructed using Touchstone's Quality-At-a-Reasonable-Price ('QARP') investment process. QARP is a fundamental bottom-up process, however, it also incorporates a top-down risk management framework designed to successfully manage the portfolio during varying market conditions and economic cycles. The Touchstone Fund is concentrated, typically holding between 15-20 stocks. No individual stock will ever make up more than 10% of the portfolio at any one time. The Investment Manager may temporarily exceed the exposure limits of the Fund occasionally, particularly during periods of market volatility, to allow for holdings in excess of this 10% limit where the increase in value of the underlying security is due to market movement. The Fund may also hold between 0-50% of the portfolio in cash. The Fund has a high level of associated risk, therefore, the minimum suggested investment time-frame is 5 years. |
| Manager Comments | As at the end of July, the Fund held 22 stocks with a median position size of 4.5%. The portfolio's holdings had an average forward year price/earnings of 16.7, forward year EPS growth of 4.8%, forward year tangible ROE of 22.6% and forward year dividend yield of 4.2%. The Fund's cash weighting was increased to 5.1% from 3.0% as at the end of June. The Fund primarily seeks to select stocks from the ASX300 Index, typically holding between 10-30 stocks. The Fund seeks to invest in reasonably priced, good quality companies with a significant share of expected returns coming from sustainable dividends. |
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Performance Report: NWQ Fiduciary Fund
21 Aug 2019 - Australian Fund Monitors
The NWQ Fiduciary Fund rose +3.21% in July, outperforming the ASX200 Accumulation Index by +0.27% and taking annualised performance since inception in May 2013 to +5.52% with an annualised volatility of 4.91%.
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21 Aug 2019 - 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 between 8% to 11% 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's performance in July was disproportionately driven by the Alpha managers (+2.73%), with the Beta managers also making a positive contribution (+0.56%). This was the Fund's largest monthly gain since July 2015 and the second largest since its inception in May 2013. NWQ's view is that the current global environment presents investors with a mosaic of risks. These range from the continuing and escalating disagreement between the US and China on trade, ongoing uncertainty around Brexit, the deceleration and likely recession in continental Europe, and the fissures opening up in emerging markets such as Argentina. They believe recent volatility is likely to continue and could become more pronounced given that fundamentals continue to deteriorate with falling earnings coupled with a fragile global macro environment. |
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Performance Report: Wheelhouse Global Equity Income Fund
21 Aug 2019 - Australian Fund Monitors
The Wheelhouse Global Equities Income Fund returned +2.17% in July, taking annualised performance since inception in May 2017 to +9.01% with an annualised volatility of 7.63%.
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21 Aug 2019 - Performance Report: Wheelhouse Global Equity Income Fund
By: Australian Fund Monitors
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| Fund Overview | To pursue this objective, the Investment Manager is responsible for actively managing, monitoring and tailoring the integration of derivative contracts alongside the Morningstar Portfolio, while taking into account changing market and stock specific conditions. The Investment Manager is responsible for maximising the structural benefits of short option positions (lowered Volatility, improved capital preservation, higher income generation), whilst mitigating, minimising and monitoring the structural negatives (variable market exposure, option expiries, collateral management and asymmetric return profiles). In addition, long derivatives positions are also used to enhance the capital preservation characteristics of the Fund in more extreme market movements. As a consequence of the integration of Derivatives, returns of the strategy, intra-cycle, are expected to vary from the underlying Morningstar Portfolio due to these characteristics. For example in weak markets, or in extended sideways markets, the Fund is expected to outperform relative to the Morningstar Portfolio. Conversely in strong positive markets the Fund is expected to underperform. |
| Manager Comments | Top contributors included KLA-Tencor, Zimmer Biomet, Anheuser-Busch InBev, Union Pacific and Western Union. Detractors included Enbridge, Pfizer, Cheniere Energy, Kao Corp and Roche. The Fund is designed to deliver equity returns with higher income generation and active downside protection. The strategy's high income generation and active tail risk program are designed to lower risk and deliver equity returns with a smoother, more retiree-friendly return profile. As a result, Wheelhouse intend for returns to add relative value in weak and low-growth markets and to drag in more positive markets. The Fund's up-capture and down-capture ratios since inception, 56.11% and 57.83% respectively, demonstrate that the Fund has been successful in achieving its investment objective. |
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