NEWS
Performance Report: ARCO Absolute Trust (formerly Optimal)
28 Jun 2018 - Australian Fund Monitors
The ARCO Absolute Trust returned -0.65% in May. Since inception in September 2008, the Fund has returned +8.14% per annum with an annualised volatility of 3.76%.
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28 Jun 2018 - Performance Report: ARCO Absolute Trust (formerly Optimal)
By: Australian Fund Monitors
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| Fund Overview | 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. *Formerly the Optimal Australia Absolute Trust |
| Manager Comments | The Fund's primary positive driver of returns in May were the resources stocks. Notable positive contributors included BHP, NuFarm, Atlas Iron, Lynas and Super Retail Group (since exited), along with the Fund's continued short exposure to select banking and building material stocks. Two long positions dragged significantly on the portfolio's overall performance - Link and AHG. Short positions in interest rate sensitive stocks were a modest drag on the May result, though ARCO noted they continue to see increasing downside risk to the price of these stocks and retain their short exposure. ARCO also initiated a position in Fairfax Media and JB Hi-Fi during the month. ARCO continue to spend a significant amount of time researching the impact of a much more difficult credit environment on the local economy and the markets, not only to re-test their view on banks but also in recognition of the many multiplier effect on local stocks; they believe it is difficult to imagine that property prices will not take a material hit. ARCO's broad view by month end was that market headwinds are building again and so, consequently, have moved the portfolio risk settings to a modest net short market exposure. |
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Performance Report: 4D Global Infrastructure Fund
27 Jun 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund returned -2.88% in May. Since inception in March 2016, the Fund has risen +10.60% per annum.
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27 Jun 2018 - 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 May was Chinese gas distributor ENN Energy (+17.4%), driven by continued strong gas demand across China as they continue to promote the move from coal to gas. The second strongest performer was US LNG shipper Cheniere (+14.6%) who is capitalising on this theme, working the meet the strong Chinese and global demand for LNG. The weakest performer was Brazilian toll road operator Ecorodovias (-15.9%), with the stock caught up in the Brazilian trucking strike. 4D Infrastructure noted that, given the global macro environment, they remain overweight user pay assets which have a direct correlation to macro strength. However, ongoing geo-political concerns plus near-term elections sees 4D Infrastructure maintain core exposure to quality defensive utility assets. |
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Fund Review: ARCO Absolute Trust May 2018
26 Jun 2018 - Australian Fund Monitors
Read the latest Fund Review on ARCO Absolute Trust. ARCO Investment Management is a specialist Australian equity investment manager and the Fund has a long/short equity strategy typically with a low but variable net market exposure...
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26 Jun 2018 - Fund Review: ARCO Absolute Trust May 2018
By: Australian Fund Monitors
AFM Fund Review - May 2018 (pdf format)
ARCO ABSOLUTE TRUST (formerly Optimal Australia Absolute Trust)
AFM have released the most recently updated Fund Review on the ARCO Absolute Trust.
We would like to highlight the following aspects of the Fund;
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ARCO Investment Management is a specialist Australian equity investment manager and the Fund has a long/short equity strategy typically with a low but variable net market exposure comprising 40 to 65 stocks broadly selected from within the ASX200.
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The investment team comprising George Colman, Peter Whiting, and Stephen Nicholls bring 100 years combined experience in equity markets.
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The Fund has an annualised return since inception of +8.14%. The Fund's approach to risk is shown by the Sharpe ratio of 1.34 (Index 0.30), Sortino ratio of 2.79 (Index 0.33), both of which are well above the ASX 200 Accumulation Index and has recorded over 77% positive months.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - May 2018 (pdf format)
Performance Report: KIS Asia Long Short Fund
26 Jun 2018 - Australian Fund Monitors
The KIS Asia Long Short Fund rose +1.06% in May, taking annualised performance since inception in October 2009 to +13.46% with an annualised volatility of 5.18%.
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26 Jun 2018 - Performance Report: KIS Asia Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Whilst the Fund's primary strategy is focused on long/short equities, the ability to retain discretionary powers to allocate across a number of other investment strategies is reserved. These strategies may include, but not be limited to: convertible bond investments, portfolio hedging, equity related arbitrage, special situations (e.g. merger arbitrage, rights offerings, participation in international public offerings and placements, etc.). The Fund's geographic focus is Asia excluding Japan, but including Australia). The Fund may invest outside of this region to the extent that: 1. The investment decision is driven from the Asian region or; 2. The exposure is intended to mitigate risk or enhance return from factors external to the Asian region. |
| Manager Comments | On the short side, key positive contributors in May included Treasury Wine Estates (+74bp contribution) and Metcash (+40bp). On the long side the Fund benefitted from owning call options on Petrochina Co Ltd (857 HK), as the stock rallied KIS sold stock to take profits as their options moved into the money (+38bp contribution). The Fund suffered a loss of -22bp on a short position in Qantas which KIS attribute to a share buyback, relatively cheap valuation, FYQ3 trading update and FY18 guidance giving the stock strong support and offsetting the long term impact of higher oil prices. In their latest commentary KIS point to risks in emerging markets, such as Brazil's truck driver's strike due to escalating fuel prices, the Italian election results and Turkish President Erdogan's decision to go to the polls early. KIS believe that, despite the apparent stability of developed markets such as HK, US and Australia, the close relationship between developed and emerging markets is often unclear until after the event, referencing the impact of LTCMs leveraged bond convergence trades in 1998 on the US financial system which is thought to have been triggered by defaults in Russian bonds. |
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Bennelong Twenty20 Australian Equities Fund May 2018
25 Jun 2018 - 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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25 Jun 2018 - Bennelong Twenty20 Australian Equities Fund May 2018
By: Australian Fund Monitors
AFM Fund Review - May 2018 (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 2018 (pdf format)
Performance Report: Bennelong Kardinia Absolute Return Fund
25 Jun 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund rose +1.78% in May, outperforming the ASX200 Accumulation Index by +0.69%.
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25 Jun 2018 - 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 in May included Emeco (+46bp contribution), Seven Group (+26bp), Qantas (+43bp), CSL (+37bp), Whitehaven (+35bp), Aristocrat (+32bp), Netwealth (+32bp). Detractors included RCR Tomlinson (-32bp), CYBG (-24bp), Bellamy's (-21bp), Ausdrill (-20bp) and Independence Group (-16bp). The short book contributed positively, driven by a short position in Share Price Index Futures (+26bp) and individual shorts in the retail, telco, banks and healthcare sectors. Net equity market exposure (including derivatives) was reduced from 60.7% to 12.9% (68% long and 55.1% short), with the addition of Kidman Resources and Reece more than offset by the sale of Bellamy's, Boral, Star Entertainment and Santos, as well as five new individual stock shorts and an increase in the Fund's short position in SPI Futures contracts. |
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Performance Report: NWQ Fiduciary Fund
22 Jun 2018 - Australian Fund Monitors
The NWQ Fiduciary Fund returned +1.20% in May, outperforming the ASX200 Accumulation Index by +0.11% and taking annualised performance since inception in May 2013 to +7.36%.
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22 Jun 2018 - 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 | NWQ noted that, despite the modest rise in the equity market in May, there continues to be an elevated level of return dispersion at the stock level which was beneficial to the Fund's Alpha managers. NWQ's Investment Committee remains circumspect about the Fund's beta exposure (i.e. exposure to the directionality of the equity market) and continues to prefer market neutral or low net exposure strategies at this time. |
| More Information |
Performance Report: Bennelong Australian Equities Fund
21 Jun 2018 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +6.44% in May, outperforming the ASX200 Accumulation Index by +5.35%.
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21 Jun 2018 - 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 | As at the end of May, the Fund's weightings had been increased in the Discretionary, Industrials and Materials sectors, and had been decreased in the Health Care, Consumer Staples and Financial sectors. The Fund aims to invest in high quality companies with strong growth outlooks and underestimated earnings momentum and prospects. By comparison with the ASX300 Accumulation Index, the portfolio's characteristics show that its holdings, on average, have a higher Return on Equity and lower debt/equity (Premium Quality), higher sales growth and higher EPS growth (Superior Growth), as well as higher price/earnings and lower dividend yield (Reasonable Valuation). |
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Performance Report: Glenmore Australian Equities Fund
20 Jun 2018 - Australian Fund Monitors
The Glenmore Australian Equities Fund rose +4.68% in May, outperforming the ASX200 Accumulation Index by +3.59% and marking the completion of the Fund's first year of operations.
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20 Jun 2018 - 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 | Positive contributors in May included Emeco Holdings (+26.5%), Mastermyne (+23.6%), Navigator Global Investments (+19.8%), Pinnacle Investment Management (+16.4%), ALE Property Group (+6.5%), Jumbo Interactive (+6.4%) and Bravura Solutions (+6.2%). Negative contributors included Pioneer Credit (-4.6%) and Pacific Current (-4%), however for both there was no news flow and neither were materials to Fund performance. This month marks the completion of the Fund's first year of operations. Glenmore noted that they are pleased with the fund's return of +35% after fees over the period. The Fund's outperformance came from a wide range of stocks and sectors, with a relatively high weighting to large cap, defensive stocks in the early months of the Fund, and with zero contribution from higher risk sectors such as small cap resources and energy or speculative technology stocks. |
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Fund Review: Bennelong Long Short Equity Fund May 2018
19 Jun 2018 - 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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19 Jun 2018 - Fund Review: Bennelong Long Short Equity Fund May 2018
By: Australian Fund Monitors
AFM Fund Review - May 2018 (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 15-years' track record and an annualised returns of over 16%.
- The consistent returns across the investment history indicate 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 1.02 and 1.69 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - May 2018 (pdf format)
