Performance Report: Surrey Australian Equities Fund

9 Apr 2020 - Australian Fund Monitors

The Surrey Australian Equities Fund outperformed the ASX200 Accumulation Index in March by +1.95%. During the month, Surrey continued to bolster the Fund's defensive positioning both through stock selection, reduced exposure to micro caps...

9 Apr 2020 - Performance Report: Surrey Australian Equities Fund

By: Australian Fund Monitors

Report Date	09 April 2020
Manager	Surrey Asset Management Pty Ltd
Fund Name	Surrey Australian Equities Fund
Strategy	Equity Long
Latest Return Date	March 2020
Latest Return	-18.70%
Latest 6 Months	-24.45%
Latest 12 Months	-16.23%
Latest 24 Months (pa)
Annualised Since Inception	-10.49%
Inception Date	01 June 2018
FUM (millions)
Fund Overview	The Investment Manager will be primarily focussed on investing in companies listed in the S&P/ASX Small Ordinaries Index while retaining capacity to invest up to 30% of the Fund in ASX listed companies outside this benchmark. The Investment Manager believes this approach offers attractive, under researched investment opportunities that can provide capital upside and growing dividend income over rolling 5-year periods. The Investment Manager follows a defined investment process which is underpinned by detailed bottom up fundamental analysis, overlayed with sectoral and macroeconomic research. This is combined with an extensive company visitation program where we endeavour to meet with company management and with other stakeholders such as suppliers, customers and industry bodies to improve our information set. Surrey Asset Management defines its investment process as Qualitative, Quantitative and Value Latencies (QQV). In essence, the Investment Manager thoroughly researches an investment's qualitative and quantitative characteristics in an attempt to find value latencies not yet reflected in the share price and then clearly defines a roadmap to realisation of those latencies. Developing this roadmap is a key step in the investment process. By articulating a clear pathway as to how and when an investment can realise what the Investment Manager sees as latent value, defines the investment proposition and lessens the impact of cognitive dissonance. This is undertaken with a philosophical underpinning of fact-based investing, transparency, authenticity and accountability.
Manager Comments	The Surrey Australian Equities Fund outperformed the ASX200 Accumulation Index in March by +1.95%. During the month, Surrey continued to bolster the Fund's defensive positioning both through stock selection, reduced exposure to micro caps and increasing cash levels to 27.5%. They expect numerous equity capital raisings over the coming months, similar to what was seen during the GFC, and aim to be well positioned to capitalise on these. Despite the volatility, Surrey believe markets will manage through this challenging period. They noted that all of the Fund's companies have robust balance sheets and continue to generate revenue and cashflow. The Fund's top holdings at the end of March included Cooper Energy (COE), Fisher & Paykel Healthcare (FPH), IMF Group (IMF) now known as Omni Bridgeway (OMN), Saracen Minerals (SAR) and Xero Limited (XRO).
More Information	Fund Profile Manager's Report

Performance Report: Bennelong Long Short Equity Fund

8 Apr 2020 - Australian Fund Monitors

The Bennelong Long Short Equity Fund outperformed the ASX200 Accumulation Index by +16.15%, returning -4.5% after fees. The Fund has returned +15.49% p.a. since inception in February 2002 versus the Index's annualised return of +6.68%.

8 Apr 2020 - Performance Report: Bennelong Long Short Equity Fund

By: Australian Fund Monitors

Report Date	08 April 2020
Manager	Bennelong Long Short Equity Management, a Bennelong boutique
Fund Name	Bennelong Long Short Equity Fund
Strategy	Equity Market Neutral
Latest Return Date	March 2020
Latest Return	-4.50%
Latest 6 Months	17.69%
Latest 12 Months	24.64%
Latest 24 Months (pa)	9.17%
Annualised Since Inception	15.49%
Inception Date	01 January 2003
FUM (millions)	AU$388.7
Fund Overview	Bennelong Long Short Equity Management applies a qualitative stock selection process to construct a diversified portfolio of paired securities based on relative value. The Bennelong Long Short Equity Management strategy invests primarily in the S&P/ASX 100 and is dollar neutral at cost. 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	The Bennelong Long Short Equity Fund outperformed the ASX200 Accumulation Index by +16.15%, returning -4.5% after fees. The Fund has returned +15.49% p.a. since inception in February 2002 versus the Index's +6.68%. The Fund's down-capture ratio for performance since inception of -171.44% highlights the Fund's capacity to significantly outperform in falling markets (a negative down-capture ratio indicates that, on average, the Fund has risen during the months the market has fallen). The Fund's gearing declined to 3.9X, down from 4.3X at the end of February, to counter market volatility. In this environment Bennelong remain focused on enhancing the attributes they are looking for in both the long and short portfolios. The Fund's trading activity was elevated as a result of volatility and opportunity. Bennelong noted it remains unclear whether the flow-on effects of a health crisis becoming an economic crisis will extend to a full-blown credit crisis. They highlight that the risk of financial distress in the economy is material, with the prolonged backdrop of artificially depressed interest rates via central bank intervention continuing to distort creditworthiness and capital allocation.
More Information	Fund Profile Manager's Report

Performance Report: Australian Eagle Trust Long-Short Fund

7 Apr 2020 - Australian Fund Monitors

The Australian Eagle Trust Long-Short Fund outperformed the ASX200 Accumulation Index by +4.41% in March. Since inception in July 2016, the Fund has returned +12.18% p.a. versus the Index's +3.55%. Australian Eagle noted they remain...

7 Apr 2020 - Performance Report: Australian Eagle Trust Long-Short Fund

By: Australian Fund Monitors

Report Date	07 April 2020
Manager	Australian Eagle Asset Management
Fund Name	Australian Eagle Trust Long-Short Fund
Strategy	Equity Long/Short
Latest Return Date	March 2020
Latest Return	-16.24%
Latest 6 Months	-16.09%
Latest 12 Months	-4.13%
Latest 24 Months (pa)	4.47%
Annualised Since Inception	12.18%
Inception Date	27 June 2016
FUM (millions)
Fund Overview	The Australian Eagle Trust Long-Short Fund aims to achieve strong double digit returns by allowing clients to access Australian Eagle's demonstrated historical strength in constructing Australian share portfolios applied to a long-short product. Using a combination of Australian Eagle's actual long investment performance in conjunction with a short selling discipline, suggests that this product can provide strong investment returns along with an alpha performance that is negatively correlated to the broader Australian equity market.
Manager Comments	The Australian Eagle Trust Long-Short Fund outperformed the ASX200 Accumulation Index by +4.41% in March. Since inception in July 2016, the Fund has returned +12.18% p.a. versus the Index's +3.55%. The Fund's up-capture and down-capture ratios for performance since inception, 132.6% and 79.6% respectively, highlight the Fund's capacity to outperform in both rising and falling markets. The Fund returned -16.24% against the Index's -20.65% in March. The portfolio's largest positive contributions came from long positions in ASX Ltd, Fortescue Metals and Resmed Inc. Key detractors included long positions in Japara Healthcare, QBE Insurance Group Ltd, and a short position in Cimic Group. The Fund had 31 long positions and 24 short positions with largest exposure to medical devices & services and technology stocks. At month-end, the portfolio had relatively less exposure to banking and materials stocks. Australian Eagle noted they remain focused on taking long-term positions in high quality growth companies with strong balance sheets that will be able to take advantage of weaker competitors once this downturn passes. Consequently, outside of minor trades to take advantage of large falls in certain stock prices during the month, they do not intend to trade excessively during this volatile time nor change the net exposure, but allow the strong individual company attributes to produce the Fund's results.
More Information	Fund Profile Manager's Report

Performance Report: Gyrostat Absolute Return Income Equity Fund

6 Apr 2020 - Australian Fund Monitors

The Gyrostat Absolute Return Income Fund rose +5.8% after fees in March, outperforming the ASX200 Accumulation Index by +26.45%. Since inception in December 2010, the Fund has returned +5.27% p.a. with an annualised volatility of 4.20%.

6 Apr 2020 - Performance Report: Gyrostat Absolute Return Income Equity Fund

By: Australian Fund Monitors

Report Date	06 April 2020
Manager	Gyrostat Capital Management
Fund Name	Gyrostat Absolute Return Income Equity Fund
Strategy	Equity Income
Latest Return Date	March 2020
Latest Return	5.80%
Latest 6 Months	9.31%
Latest 12 Months	16.97%
Latest 24 Months (pa)	10.50%
Annualised Since Inception	5.27%
Inception Date	10 December 2010
FUM (millions)	AU$12
Fund Overview	Gyrostat's absolute return income equity fund is designed to combine protection, returns and regular income through all stages of the investment cycle (including large market falls). 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 Gyrostat Absolute Return Income Fund rose +5.8% after fees in March, outperforming the ASX200 Accumulation Index by +26.45% and taking 12-month performance to +16.97% versus the Index's -14.42%. Since inception in December 2010, the Fund has returned +5.27% p.a. with an annualised volatility of 4.20%. The Fund's largest drawdown since inception is -2.97%. Gyrostat are focused on ensuring the Fund is highly defensive, protecting wealth whilst delivering regular income. The Fund has operated for 37 consecutive quarters with a 'hard' pre-defined risk parameter always in place (no more than 3% of capital at risk with a maximum drawdown of -2.2% in any quarter). Gyrostat have expanded the international assets within the Fund to include S&P500, Nasdaq, FANGS, Nikkei, Hand Send, MSCI China, MSCI Developed and developing markets, allowing Gyrostat to offer a broader range of non-correlated assets with significant scale potential.
More Information	Fund Profile Manager's Report

Hedge Clippings | 03 April 2020

3 Apr 2020 - Australian Fund Monitors

"Only when the tide goes out do you discover who's been swimming naked" Hedge Clippings is happy to credit the above quote to Warren Buffett, as, amongst all the wise words he has spoken over the years, this seems the most...

3 Apr 2020 - Hedge Clippings | 03 April 2020

By: Australian Fund Monitors

Hedge Clippings | Friday 03 April, 2020

"Only when the tide goes out do you discover who's been swimming naked"

Hedge Clippings is happy to credit the above quote to Warren Buffett, as, amongst all the wise words he has spoken over the years, this seems the most appropriate one for these extraordinary times. If you want more, here's a link to them courtesy of "Brainy Quote" - the only problem being you'll have to put up with a whole bunch of people advertising on the back of his wisdom.

We're not quite sure of his view on the current market, but as one of his pearls was/is "our favourite holding period is forever" we can probably guess. However, having a long-term view when markets are as volatile as they are now requires nerve, and probably a strong balance sheet to boot.

He also said, "let blockheads read what blockheads wrote", so we will leave it to the reader to decide if we qualify!

Everyone is, however, aware (we presume) that the ASX200 fell over 20% in March, with daily and intraday volatility at unprecedented levels, making the role of portfolio managers doubly difficult. As we recently wrote, these are difficult and disorderly markets, and managers that previously rode the bull markets - or as Buffett might say, rose on the flood tide - are going to be found wanting to various degrees.

That was certainly the case in February when the ASX200 fell by 8%, while the average absolute return fund on www.fundmonitors.com fell by half that amount, but with performances ranging from -30% through to +20%. On early indications March will have a similar pattern, with some already reporting falls of around 30%.

On the positive side, those managers and strategies we would expect to excel have been doing just that. Again, reports are still sparse after just three days, but Gyrostat's Absolute Return Fund rose +5.8%, while preliminary returns from the likes of Levitas (+15%), ARK (+5%), and Arnott (+7%) are hopefully an indication of those to come.

Positive is one thing, but in our view any manager protecting capital is worth looking at. So, with the ASX down almost 18% over 12 months (what a difference a couple of months make), even half that figure is something to crow about.

Meanwhile, Hedge Clippings has pleasingly seen an increase in manager "Insights" articles focusing on the potential long-term effects of the current pandemic. Included below are two worth reading - "How bad will the COVID-19 recession be" from Arminius Capital (whose author Marcel von Pfyffer admits to now knowing why he studied what he did at university), and the interestingly titled "Love in the time of COVID-19" from Delft Partners.

The latter provides the following advice: Invest, Don't Speculate; Be Patient - think long term, and finally, Diversify to spread risk.

Wise words indeed, but it takes nerve. Both Insights are worth reading, and as you can't (or shouldn't) go anywhere on the weekend, spend a little time doing so - even with a well-earned glass in hand!

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How bad will the COVID-19 recession be?

3 Apr 2020 - Arminius Capital

EPIDEMICS - A NATURAL PART OF LIFE If there were no quarantines, lockdowns, vaccines or cures, the COVID-19 epidemic would keep on spreading through the population until everyone susceptible to it had been infected. This was how...

Presentation - Gyrostat Absolute Return Income Equity Fund

3 Apr 2020 - Gyrostat Capital Management

The Fund is designed for retiree income with protection, and to address sequencing risk. The distinctive features are 'hard' protection always in place and a track record of returns increasing with market volatility. There is an...

Love in the Time of COVID-19

3 Apr 2020 - Delft Partners

Another brief update from Delft on what to do with your hard-earned savings. We are not epidemiologists so won't be pontificating on the myriad possibilities and uncertainties of the virus - mutations, complications and infections. We have...

Fund Review: Bennelong Kardinia Absolute Return Fund February 2020

3 Apr 2020 - Australian Fund Monitors

The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund, which has been in operation for more than 10 years, has a long-biased, research driven, active equity long/short strategy and invests in...

Performance Report: Surrey Australian Equities Fund

2 Apr 2020 - Australian Fund Monitors

The Surrey Australian Equities Fund has returned +4.07% over the past 12 months. Surrey noted they are conscious of the risks COVID-19 poses - both the health and economic impacts. They remain positive on equity markets in 2020 but are...

2 Apr 2020 - Performance Report: Surrey Australian Equities Fund

By: Australian Fund Monitors

Report Date	02 April 2020
Manager	Surrey Asset Management Pty Ltd
Fund Name	Surrey Australian Equities Fund
Strategy	Equity Long
Latest Return Date	February 2020
Latest Return	-9.90%
Latest 6 Months	-5.02%
Latest 12 Months	4.07%
Latest 24 Months (pa)
Annualised Since Inception	0.22%
Inception Date	01 June 2018
FUM (millions)
Fund Overview	The Investment Manager will be primarily focussed on investing in companies listed in the S&P/ASX Small Ordinaries Index while retaining capacity to invest up to 30% of the Fund in ASX listed companies outside this benchmark. The Investment Manager believes this approach offers attractive, under researched investment opportunities that can provide capital upside and growing dividend income over rolling 5-year periods. The Investment Manager follows a defined investment process which is underpinned by detailed bottom up fundamental analysis, overlayed with sectoral and macroeconomic research. This is combined with an extensive company visitation program where we endeavour to meet with company management and with other stakeholders such as suppliers, customers and industry bodies to improve our information set. Surrey Asset Management defines its investment process as Qualitative, Quantitative and Value Latencies (QQV). In essence, the Investment Manager thoroughly researches an investment's qualitative and quantitative characteristics in an attempt to find value latencies not yet reflected in the share price and then clearly defines a roadmap to realisation of those latencies. Developing this roadmap is a key step in the investment process. By articulating a clear pathway as to how and when an investment can realise what the Investment Manager sees as latent value, defines the investment proposition and lessens the impact of cognitive dissonance. This is undertaken with a philosophical underpinning of fact-based investing, transparency, authenticity and accountability.
Manager Comments	The Surrey Australian Equities Fund has returned +4.07% over the past 12 months. Surrey noted they are conscious of the risks COVID-19 poses - both the health and economic impacts. They remain positive on equity markets in 2020 but are more cautious relative to this time last year. They believe the hysterical reaction to the virus has created share price dislocations which they have used to buy what they believe to be strong companies at very attractive valuations. These investments are not directly exposed to COVID-19 either on the supply or demand side. The fund's top holdings at the end of February included Centuria Capital Group (CNI), Fisher & Paykel Healthcare (FPH), IMF Group (IMF), Imricor Medical Systems (IMR) and Xero Limited (XRO). The fund doesn't hold any travel business or have any significant exposure to companies directly focused on the Chinese consumer market.
More Information	Fund Profile Manager's Report

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9 Apr 2020 - Performance Report: Surrey Australian Equities Fund

8 Apr 2020 - Performance Report: Bennelong Long Short Equity Fund

7 Apr 2020 - Performance Report: Australian Eagle Trust Long-Short Fund

6 Apr 2020 - Performance Report: Gyrostat Absolute Return Income Equity Fund

3 Apr 2020 - Hedge Clippings | 03 April 2020

3 Apr 2020 - How bad will the COVID-19 recession be?

3 Apr 2020 - Presentation - Gyrostat Absolute Return Income Equity Fund

3 Apr 2020 - Love in the Time of COVID-19

3 Apr 2020 - Fund Review: Bennelong Kardinia Absolute Return Fund February 2020

2 Apr 2020 - Performance Report: Surrey Australian Equities Fund

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