NEWS
Performance Report: ARCO Absolute Trust (formerly Optimal)
20 Dec 2017 - Australian Fund Monitors
The ARCO Absolute Trust returned +1.57% in November. The Fund's annualised return since inception in September 2008 is +8.41% with a volatility of 3.74%.
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20 Dec 2017 - 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 long positions drove performance in November, most notably from a number of long-held positions in JHG, WOW, CYB, AHG and ORE. Limiting the Fund's long exposure in banks to CBA, Macquarie and CYB was also a positive contributor, as was the broader short position in the sector with the Royal Commission announcement into banks. ARCO exited Pilbara Minerals and trimmed Orocobre, although they remain interested in EV and energy storage. Lynas Corporation was added to the portfolio during the month. The Fund exited its investment in FXJ and the Fund continues to be active in TLS, where ARCO believe a solid long investment case is emerging. The Fund's aggregate short positions detracted from performance, ARCO expect these positions to continue to protect investor capital in a market they believe is increasingly overvalued. Into 2018, ARCO believe the 'lower for longer' monetary policy of central banks will continue to be unwound and that the economic fundamentals of companies will play a greater role in their stock price valuations. ARCO noted Corporate Australia will continue to benefit from low domestic rates which should fuel their growth plans, though consumer weakness (indebtedness and sentiment) and tightening bank credit will be a challenge to broad market earnings. They believe volatility in the Australian market will likely rise. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
19 Dec 2017 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +1.08% in November, taking annualised performance since inception to +11.23%.
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19 Dec 2017 - Performance Report: Bennelong Twenty20 Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed as one portfolio but comprises and combines two separately managed exposures: 1. An investment in the top 20 stocks of the markets, which the Fund achieves by taking an indexed position in the S&P/ASX 20 Index; and 2. An investment in the stocks beyond the S&P/ASX 20 Index. This exposure is managed on an active basis using a fundamental core approach. The Fund may also invest in securities expected to be listed on the ASX, securities listed or expected to be listed on other exchanges where such securities relate to ASX-listed securities.Derivative instruments may be used to replicate underlying positions and hedge market and company specific risks. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Accumulation Index. The Fund typically holds between 40-55 stocks and thus is considered to be highly concentrated. This means that investors should expect to see high short-term volatility. The Fund seeks to achieve growth over the long-term, therefore the minimum suggested investment timeframe is 5 years. |
| Manager Comments | At the end of November, weightings were increased in the Consumer Staples, Health Care, Energy and REIT's sectors and were decreased in the Discretionary, Industrials, Telco's, Financials and Materials sectors. The Fund combines a passive investment in the S&P/ASX20 Index and an actively managed investment in Australian listed stocks outside this index. The passive position is achieved by investing individually in each of the S&P/ASX20 Index's individual stocks with approximately the same weightings they represent in the S&P/ASX300. Currently this weight is approximately 60% of the Fund's portfolio. The active position in ex-20 stocks has the goal of allowing the Fund to outperform the broader market. |
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Performance Report: NWQ Fiduciary Fund
18 Dec 2017 - Australian Fund Monitors
The NWQ Fiduciary Fund rose +1.65% in November, taking annualised performance since inception in May 2013 to +6.84% with a volatility of 4.82%.
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18 Dec 2017 - 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 | There were solid contributions to the overall Fund performance from both the Alpha and Beta managers. The Beta managers benefited from the continued strength of the broader equity market, while the Alpha managers benefited from higher levels of dispersion both within and across sectors. Overall, seven of the eleven underlying managers comprising the Fund delivered positive returns. The Fund is a diversified multi manager portfolio comprising 11 managers in total, 6 Alpha managers and 5 Beta managers. The objective of the Fund is to produce attractive positive returns irrespective of market direction. The Fund places emphasis on managers who demonstrate a rigorous and repeatable investment process that has delivered a strong track record. |
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Performance Report: Pengana Absolute Return Asia Pacific Fund
15 Dec 2017 - Australian Fund Monitors
The Pengana Absolute Return Asia Pacific Fund increased +0.25% in November, taking annualised performance since inception in September 2010 to +8.42%.
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15 Dec 2017 - Performance Report: Pengana Absolute Return Asia Pacific Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will usually hold 40 to 80 positions and will be well diversified across the various event strategies. In keeping with the absolute return focus the Manager will eliminate market risk where appropriate by hedging market and foreign currency risks. Since inception the Fund has averaged a net equity market exposure of ~10%. Sizing of an investment position will depend on the expected risk adjusted returns while taking account the liquidity and volatility of the stock. In addition, the maximum potential loss on any one position should be greater than 0.5% of the NAV and the position should not exceed 30% participation of stressed volume assuming a $200m NAV. Other criteria considered are ability to hedge and the availability of pair candidates as well as the average bid-ask size. For M&A strategies average long position is 3 to 5.5% and average short position 2 to 5%. |
| Manager Comments | The M&A and Direction Alpha strategies contributed positively for the month, returning +0.4% and +0.32% respectively, while the Relative Value book detracted -0.43%. In the M&A book, positive contributors included the Fund's position in Hong Kong listed TCC International Holdings (+0.20%) and Siliconware Precision Industries in Taiwan. The Fund also added Changyou.com Limited in the month. In Australia, the Fund's position in Pepper Group completed successfully, as the scheme implementation agreement by private equity buyer KKR was voted through. Key successes in the Directional Alpha book were Shangri-La Asia (+13.4%), Shinsegae (+14.8%) and the spin-off in Wharf Real Estate Investment (+10%), whilst detractors included China Travel (-12.5%) and Samsung Electronics (-7.8%). Most of the negative contribution from the Relative Value book came from the Fund's long/short position long SINA Corp/short Weibo Corp, however, Pengana continue to hold this position. In Japan, the Fund has entered into a long position in Kansai Pain / short Nippon Paint which contributed positively. The Fund's position in long Mitsui OSK / short Kawasaki Kisen was unwound with a positive contribution of 14 basis points. |
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Performance Report: Bennelong Long Short Equity Fund
14 Dec 2017 - Australian Fund Monitors
The Bennelong Long Short Equity Fund fell -1.14% in November. The Fund's annualised return since inception is +16.38% versus the ASX200 Accumulation Index's +8.13%.
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14 Dec 2017 - 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 | Performance in November reflected an even spread of positive vs negative pairs, however, the Fund's top contributors did not overcome the worst pair performers. These were: 1) long SEK / short NWS / short NEC; 2) long ALS / short AZJ; and 3) long Aristocrat / short Tabcorp. The most notable positive pair was long Origin / short CTX / short AGL, with Origin buoyed by a higher oil price and further announced cost reductions at its APLNG project. Bennelong noted the S&P500 has gained every single month in 2017 except in March when it fell -0.04%. There have only been three other calendar years in the entire history of the S&P500 Index (which commenced in 1923) where the Index has exhibited only one negative month. The Index normally has 3-6 negative months in any calendar year, hence Bennelong conclude the Index's trend in 2017 is consistent with other data showing a lack of volatility in the overall market such as the VIX Index. |
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Fund Review: ARCO Absolute Trust November 2017
13 Dec 2017 - Australian Fund Monitors
Read the latest Fund Review on ARCO Absolute Trust.
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13 Dec 2017 - Fund Review: ARCO Absolute Trust November 2017
By: Australian Fund Monitors
AFM Fund Review - November 2017 (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 +8.41%. The Fund's approach to risk is shown by the Sharpe ratio of 1.39 (Index 0.30), Sortino ratio of 2.95 (Index 0.32), both of which are well above the ASX 200 Accumulation Index and has recorded over 79% positive months.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - November 2017 (pdf format)
Performance Report: Allard Investment Fund
12 Dec 2017 - Australian Fund Monitors
The Allard Investment Fund rose +1.38% in November, taking annualised performance since inception in July 2003 to +9.40%.
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12 Dec 2017 - Performance Report: Allard Investment Fund
By: Australian Fund Monitors
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| Fund Overview | Allard's investment approach has remained consistent throughout their history: That is to invest prudently but proactively in well-managed businesses that achieve superior returns on capital in industries with long-term growth potential. The Manager uses both broad top-down guidance and detailed bottom-up analysis to identify suitable markets, industries and companies. Although long only investors, a critical factor in their strategy and performance is the ability to hold cash when they cannot find companies that meet their criteria or are at a sufficient discount to their valuations. |
| Manager Comments | The Fund's latest report shows that holdings in Cash and Fixed Income have decreased to 20.7% from 23.0% as at the end of October. The portfolios weightings were decreased in the Consumer Staples, Industrials and Utilities sectors and weightings in the Health Care, IT, Financials and Telco sectors were increased. The portfolio remains highly concentrated, with 53.2% of NAV held in the Fund's top 10 stocks. Geographically, Hong Kong and China make up most of the portfolio (45.1%), followed by Singapore (13.7%), India (11.2%), Korea (4.9%), Indonesia (2.3%), Australia (1.1%) and Vietnam (1.0%). |
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Fund Review: Bennelong Long Short Equity Fund November 2017
11 Dec 2017 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available.
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11 Dec 2017 - Fund Review: Bennelong Long Short Equity Fund November 2017
By: Australian Fund Monitors
AFM Fund Review - November 2017 (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 large-caps from the ASX/S&P100 Index, with over fourteen-year track record and annualised returns of 16.38% p.a.
- 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 0.99 and 1.63 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - November 2017 (pdf format)
Performance Report: Collins St Value Fund
8 Dec 2017 - Australian Fund Monitors
The Collins St Value Fund fell -4.95% in October, the Fund's 3rd negative month in the 21 months since inception in February 2016. The Fund's annualised return since inception is +15.62% versus the Index's +15.04%.
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8 Dec 2017 - Performance Report: Collins St Value Fund
By: Australian Fund Monitors
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| Fund Overview | The managers of the fund intend to maintain a concentrated portfolio of investments in ASX listed companies that they have investigated and consider to be undervalued. They will assess the attractiveness of potential investments using a number of common industry based measured, a proprietary in-house model and by speaking with management, industry experts and competitors. Once the managers form a view that an investment offers sufficient upside potential relative to the downside risk, the fund will seek to make an investment. If no appropriate investment can be identified the managers are prepared to hold cash and wait for the right opportunities to present themselves. |
| Manager Comments | The Fund's performance in October was largely due to two of the Fund's holdings having experienced temporary falls in their share prices. Crowd Mobile fell from 24c per share to 14c per share after the CEO announced he was selling shares to fund a tax liability. However, Collins St noted Crowd Mobile had moved up to 17c and the Fund had recouped the majority of October's losses at the time of writing their latest report. The Fund stands out as one of the few with zero management fees, charging performance fees only, ensuring the Manager's interests are aligned with investors'. It invests in sustainable cash-flow generating businesses that are trading at significant discounts to their underlying worth. |
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Performance Report: Insync Global Titans Fund
8 Dec 2017 - Australian Fund Monitors
The Insync Global Titans Fund returned +3.75% in October, taking the Fund's annualised return since inception in October 2009 to +9.84%.
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8 Dec 2017 - Performance Report: Insync Global Titans 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 | Performance was driven by positive contributions from Paypal, Microsoft, Oracle, Visa and Stryker. The main negative contributors were London Stock Exchange, Unilever, Reckitt Benckiser and Comcast Corp. The Fund continues to have no foreign currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Over 50% of the Fund is currently protected using Insync's put protection strategy. Insync discuss their investment in Visa in their latest report. Insync consider Visa to continue to be undervalued based on the company sustaining its high levels of profitability over the medium to long term. They believe Visa Europe and increased uptake in India will bolster Visa shares in the medium-term. |
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