NEWS
Performance Report: Bennelong Concentrated Australian Equities Fund
21 Jun 2019 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund has returned +15.96% p.a. since inception in Jan 2009 versus the ASX200 Accumulation Index's +10.75% p.a. over the same period.
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21 Jun 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 | The Fund returned -2.09% in May. The largest detractor was Reliance Worldwide after the company downgraded its earnings guidance during the month. As Reliance had a significant weighting in the portfolio, the share price decline had a material impact on performance. In their latest report, Bennelong point out a number of issues they believe impacted Reliance's performance, noting that they believe these issues are largely one-off events and that they continue to believe in the company's longer term prospects. Other detractors included Corporate Travel Management and Costa Group. Aristocrat Leisure contributed positively after the company reported a strong interim result during the month, with growth revenues and earnings per share of 30% and 17% respectively. Bennelong's view is that while valuation metrics such as price-to-earnings ratios appear relatively attractive for the ASX, the main risk they see is that of earnings risk; i.e. the risk that companies disappoint investors by delivering earnings below expectations. They noted that share prices have often fallen disproportionately in response to earnings downgrades, such as those seen with Reliance Worldwide and Costa Group. Their conclusion is that investors remain very risk-averse, short-term focused and skittish. |
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Performance Report: Bennelong Kardinia Absolute Return Fund
21 Jun 2019 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund was flat in May, with short positions in banks the key detractors given the strong rally following the unexpected Coalition victory in the federal election. Since inception in May 2006 the Fund...
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21 Jun 2019 - 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 included Evolution Mining (+33bp contribution), Northern Star (+29bp), Audinate Group (+32bp), Polynovo (+19bp) and Aristocrat Leisure (+19bp). The short book was the biggest detractor (-90bp), driven by short positions in two of the major four banks as well as a short position in Share Price Index Futures. Other detractors included Macquarie Group (-35bp), A2 Milk (-18bp) and Oz Minerals (-15bp). Net equity market exposure was decreased from 51.5% to 13.5% (47.6% long and 34.1% short), with the key changes being the sale of Bluescope, Fortescue and Worley Parsons and a large increase in their short position in Share Price Index Futures. This was partly offset by new positions in Evolution Mining and Flight Centre, as well as increased weightings in Commonwealth Bank, Polynovo and Northern Star. |
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Performance Report: Bennelong Australian Equities Fund
19 Jun 2019 - Australian Fund Monitors
The Bennelong Australian Equities Fund has returned +13.34% p.a. since inception in February 2009 versus the ASX200 Accumulation Index's +10.75%.
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19 Jun 2019 - 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 Fund returned -1.45% in May, taking the YTD return to +13.08%. The largest detractor was Reliance Worldwide after the company downgraded its earnings guidance. Bennelong noted that, as Reliance had a large weighting in the portfolio, the share price decline had a material impact on performance. Other detractors included Corporate Travel Management and Costa Group. The main positive contributor to performance was Aristocrat Leisure. Bennelong's view is that while valuation metrics such as price-to-earnings ratios appear relatively attractive for the ASX, the main risk they see is that of earnings risk; i.e. the risk that companies disappoint investors by delivering earnings below expectations. They note that share prices have often fallen disproportionately in response to earnings downgrades, such as those seen with Reliance Worldwide and Costa Group. Their conclusion is that investors remain very risk-averse, short-term focused and skittish. |
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Bennelong Twenty20 Australian Equities Fund May 2019
18 Jun 2019 - Australian Fund Monitors
The latest Fund Review on Bennelong Twenty20 Australian Equities Fund is now available. The Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of ex-20 stocks.
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18 Jun 2019 - Bennelong Twenty20 Australian Equities Fund May 2019
By: Australian Fund Monitors
AFM Fund Review - May 2019 (pdf format)
BENNELONG TWENTY20 AUSTRALIAN EQUITIES FUND
Attached is our most recently updated Fund Review on the Bennelong Twenty20 Australian Equities Fund.
- The Bennelong Twenty20 Australian Equities Fund invests in ASX listed stocks, combining an indexed position in the Top 20 stocks with an actively managed portfolio of stocks outside the Top 20. Construction of the ex-top 20 portfolio is fundamental, bottom-up, core investment style, biased to quality stocks, with a structured risk management approach.
- Mark East, the Fund's Chief Investment Officer, and Keith Kwang, Director of Quantitative Research have over 50 years combined market experience. Bennelong Funds Management (BFM) provides the investment manager, Bennelong Australian Equity Partners (BAEP) with infrastructure, operational, compliance and distribution services.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - May 2019 (pdf format)
Performance Report: Cyan C3G Fund
17 Jun 2019 - Australian Fund Monitors
The Cyan C3G Fund rose +2.81% in May, outperforming the ASX200 Accumulation Index by +1.1% and taking annualised performance since inception in August 2014 to +19.21% versus the Index's +7.39%.
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17 Jun 2019 - Performance Report: Cyan C3G Fund
By: Australian Fund Monitors
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | Top contributors included Alcidion, Isentia, AMA Group and ReadCloud. Detractors included Kelly Partners, Experience Co and Afterpay, although smaller weightings in these companies curtailed any material negative Fund performance. The Fund has subscribed to a number of smaller placements but has also taken stock in a handful of new IPO's due to list in the next month or two. Some of these include Victory Offices who operate 19 flexible workspace locations, and Quickfee who offer premium funding and payment solutions to the accounting and legal industries in both Australia and the US. Cyan emphasise that, whilst month-to-month volatility can be expected, they have a firm view of long-term opportunity and remain confident in the outlook for the Fund. |
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Performance Report: DS Capital Growth Fund
14 Jun 2019 - Australian Fund Monitors
The DS Capital Growth Fund rose +2.37% in May, outperforming the ASX200 Accumulation Index by +0.66% and taking annualised performance since inception in Jan 2013 to +15.33% with a volatility of 7.30% p.a. versus the Index's return of...
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14 Jun 2019 - Performance Report: DS Capital Growth Fund
By: Australian Fund Monitors
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| Fund Overview | The investment team looks for industrial businesses that are simple to understand; they generally avoid large caps, pure mining, biotech and start-ups. They also look for: - Access to management; - Businesses with a competitive edge; - Profitable companies with good margins, organic growth prospects, strong market position and a track record of healthy dividend growth; - Sectors with structural advantage and barriers to entry; - 15% p.a. pre-tax compound return on each holding; and - A history of stable and predictable cash flows that DS Capital can understand and value. |
| Manager Comments | The Fund performed strongly in May with solid gains across the portfolio. Top performers included Lifestyle Communities, AMA Group and Interxion (US listed). There were no major changes to the portfolio. DS Capital noted the election result was embraced by the stock market with the policy agenda of the winners appearing favourable for economic growth. In the meantime, they expect low interest rates to have a favourable impact on stock market valuations. They add that although rates will ultimately normalise they don't believe this is likely in the near term. DS Capital feel the portfolio is well positioned as they work toward reporting season. |
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Fund Review: Bennelong Kardinia Absolute Return Fund May 2019
14 Jun 2019 - Australian Fund Monitors
The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund is a long-biased, research driven, active equity long/short strategy which invests in listed ASX companies with track records greater than 10 years.
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14 Jun 2019 - Fund Review: Bennelong Kardinia Absolute Return Fund May 2019
By: Australian Fund Monitors
AFM Fund Review - May 2019 (pdf format)
BENNELONG KARDINIA ABSOLUTE RETURN FUND
Attached is our most recently updated Fund Review. You are also able to view the Fund's Profile.
- The Fund is long biased, research driven, active equity long/short strategy investing in listed ASX companies with over ten-year track record.
- The Fund has significantly outperformed the ASX200 Accumulation Index since its inception in May 2006 and also has significantly lower risk KPIs. The Fund has an annualised return of 9.12% p.a. with a volatility of 7.06%, compared to the ASX200 Accumulation's return of 6.09% p.a. with a volatility of 13.23%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Mark Burgess and Kristiaan Rehder have significant market experience, while Bennelong Funds Management provide infrastructure, operational, compliance and distribution capabilities.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - May 2019 (pdf format)
Performance Report: NWQ Global Markets Fund
12 Jun 2019 - Australian Fund Monitors
The NWQ Global Markets Fund returned -1.67% in May. Since inception in September 2018 the Fund has returned +2.18% on a cumulative basis.
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12 Jun 2019 - Performance Report: NWQ Global Markets Fund
By: Australian Fund Monitors
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| Fund Overview | This is achieved through active allocations to a select number of liquid alternative managers that employ a variety of strategies. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record. |
| Manager Comments | US and European equity markets suffered their largest monthly decline for the year in May while safe haven assets such as US Treasuries, the US Dollar and Japanese Yen strengthened. This market backdrop, they noted, was more favourable for the Fund's discretionary managers (+2.38%) as compared with the systematic managers (-3.99%). The Fund's currency exposures were the largest positive contributor during the month. However, these gains were more than offset by losses in the Fund's equity exposures. The Fund's fixed income positions combined to produce a modest loss while there was a small gain from the Fund's commodities positions. |
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Performance Report: Paragon Australian Long Short Fund
11 Jun 2019 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +10.40% in May, outperforming the ASX200 Accumulation Index by +8.69% and taking annualised performance since inception in March 2013 to +9.43%.
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11 Jun 2019 - 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 included Kidman, iSignthis, Xero, Atrum and shorts in Bluescope and Sandfire. Kidman received a takeover offer from Wesfarmers on 2nd May which became binding later in the month. Paragon noted they anticipated this outcome for KDR, with its world class and undervalued offering. They added that Gina Reinhardt raised her bid yet again to secure Riverdale, illustrating considerable upside in neighbouring Atrum. In their latest report Paragon discuss Nearmap, a cloud-based software-as-a-service (Saas) company offering aerial imagery services in Australia, New Zealand and North America. Paragon see Nearmap to be a highly scalable SaaS-based business in a high growth phase, well placed to continue to deliver >30% organic sales growth over the medium to long-term. They also provide their view on Xero, a company which they believe boasts strong revenue momentum in its cloud-based accounting SaaS and a substantial growth runway. |
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Fund Review: Bennelong Long Short Equity Fund May 2019
7 Jun 2019 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available. The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index...
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7 Jun 2019 - Fund Review: Bennelong Long Short Equity Fund May 2019
By: Australian Fund Monitors
AFM Fund Review - May 2019 (pdf format)
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index, with over 16-years' track record and an annualised returns of 14.69%.
- The consistent returns across the investment history highlight the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 0.88 and 1.41 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - May 2019 (pdf format)
