NEWS
Performance Report: Harvest Lane Asset Management Absolute Return Fund
28 Feb 2020 - Australian Fund Monitors
The Harvest Lane Absolute Return Fund returned +0.27% in January. Since inception in July 2013, the Fund has returned 7.95% p.a. with an annualised volatility of 6.70%. The manager noted the Fund was almost fully invested at month-end,...
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28 Feb 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Harvest Lane Asset Management employs a conservative, highly selective and opportunistic approach. Using their extensive knowledge in the area of corporate actions, the Fund's managers assess each opportunity based on a thoughtful, diligent and disciplined process and invest where they believe an opportunity exists to generate above average investment returns relative to the risk incurred. Investment decisions are made without speculating on market direction, with rigid risk controls enforced to minimise the risk of large losses of investor capital. The Fund invests in securities that are predominantly listed on the ASX and occasionally in those listed in other developed markets. Equity swaps and other derivatives may be used at times to reduce risk. The fund typically holds high levels of cash in the absence of sufficiently attractive opportunities to deploy investor capital in accordance with its objectives. |
| Manager Comments | Corporate activity ramped up in the second half of January. One new position in Windlab Limited was established following a non-binding offer from Federation Asset Management, but the majority of the Fund's activity was focused on existing positions in the portfolio or existing deals that saw Harvest Lane re-enter as the risk-reward dynamics became more favourable. The largest detractor for the month was the Fund's residual holding in Panoramic Resources Limited. Fresh from completing a $32m equity raise in mid-January, it took only two weeks for the company to realise it still wasn't adequately funded and was likely in breach of existing debt covenants. Due to the complexities of the company's required funding and management's inability to understand it, Harvest Lane exited their position for safety. |
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Performance Report: Frazis Fund
28 Feb 2020 - Australian Fund Monitors
The Frazis Fund rose +11.4% in January, outperforming AFM's Global Equity Benchmark by +7.67% and taking 12-month performance to +27.22%.
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28 Feb 2020 - Performance Report: Frazis Fund
By: Australian Fund Monitors
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| Fund Overview | The manager follows a disciplined, process-driven, and thematic strategy focused on five core investment strategies: 1) Growth stocks that are really value stocks; 2) Traditional deep value; 3) The life sciences; 4) Miners and drillers expanding production into supply deficits; 5) Global special situations; The manager uses a macro overlay to manage exposure, hedging in three ways: 1) Direct shorts 2) Upside exposure to the VIX index 3) Index optionality |
| Manager Comments | The Frazis Fund rose +11.4% in January, outperforming AFM's Global Equity Benchmark by +7.67% and taking 12-month performance to +27.22%. The software firms the Fund was buying heavily late in 2019 rebounded strongly, with Afterpay moving to new highs. The Fund also saw strong performance from ASX-listed life sciences companies such as PolyNovo and Avita which are discussed in more depth in the latest report. Frazis noted, given the strong start to the year, there's an inclination to trim and realise profits, however they're going to stick to their long-term investment philosophy. So far the Fund's investment theses are on track during reporting season. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
28 Feb 2020 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +5.21% in January, taking 12-month performance to +28.82% versus the ASX200 Accumulation Index's +24.72%. Since inception in November 2009 the Fund has returned +11.05% p.a. versus the...
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28 Feb 2020 - 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 | Bennelong remain constructive on equities. They believe valuations are relatively attractive in the context of low rates and by comparison with the competition (bonds, term deposits and property), corporate fundamentals are supportive with some earnings growth, generally strong balance sheets and decent cash flows, and investor sentiment is still quite cautious. They also highlight the following uncertainties impacting markets at present - ongoing US-Sino trade frictions, remaining Hong Kong tensions, Brexit fallout, the US Presidential election, coronavirus, and a sluggish Australian economy. |
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Performance Report: Insync Global Capital Aware Fund
28 Feb 2020 - Australian Fund Monitors
The Insync Global Capital Aware Fund returned +5.31% in January, taking 12-month performance to +35.38% versus AFM's Global Equity Benchmark's +26.09%. Since inception in October 2009, the Fund has returned +11.68% p.a. with an annualised...
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28 Feb 2020 - 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 | Positive contributors during the month included Intuit, Visa, Adobe, S&P Global and Paypal. Detractors were Bookings.com, Treasury Wine Estates, Boston Scientific, Walt Disney and Estee Lauder. The Fund continues to have no currency hedging in place as Insync consider the main risks to the AUD to be skewed to the downside. Insync believe the prevailing low growth and low inflation environment is unlikely to change in the medium term. |
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Performance Report: Quay Global Real Estate Fund
27 Feb 2020 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +5.20% in January, taking the 12-month return to +21.85%. Since inception in January 2016, the Fund has returned +11.73% p.a. with an annualised volatility of 10.31%.
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27 Feb 2020 - 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 | The Fund's overall return was boosted at the stock level by some of Quay's highest conviction investments, including LEG Immobilien (German Residential). The Fund's relatively high weight to Hong Kong was a headwind for performance. Quay expect the region's strong currency, political turmoil, protests and fears of the impacts of coronavirus to further impact the local economy, however, they noted they refuse to panic and sell out of positions that on almost any measure are very cheap. Quay continue to have zero exposure to US Mall REITs. Their view is that there is simply too much mall space in the US, and they believe it will take many years to rationalise. |
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Performance Report: Wheelhouse Global Equity Income Fund
26 Feb 2020 - Australian Fund Monitors
The Wheelhouse Global Equity Income Fund rose +4.82% in January, outperforming AFM's Global Equity Benchmark by +1.09% and taking performance since inception in May 2017 to +10.38% p.a. with an annualised volatility of 7.80%.
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26 Feb 2020 - 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 | The Fund's January return comprised -0.18% from the portfolio (in USD) and +5.00% from the weakening of the Australian dollar versus the US dollar. Top contributors included ServiceNow, Salesforce, Adobe, Intel Corp and Novo Nordisk. Key detractors included Amgen, Microchip Technology, Richemont, Elekta AB and Bank of America. |
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Fund Review: Bennelong Twenty20 Australian Equities Fund January 2020
26 Feb 2020 - 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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26 Feb 2020 - Fund Review: Bennelong Twenty20 Australian Equities Fund January 2020
By: Australian Fund Monitors
AFM Fund Review - January 2020 (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 - January 2020 (pdf format)
Performance Report: Cyan C3G Fund
25 Feb 2020 - Australian Fund Monitors
The Cyan C3G Fund has returned +17.79% p.a. since inception in August 2014 with an annualised volatility of 11.39%. By contrast the ASX200 Accumulation Index has returned +8.72% p.a. with an annualised volatility of 10.93% over the same period.
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25 Feb 2020 - 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 | The Fund returned -0.3% in January. During the month the Fund had 16 positions deliver positive results, 15 negative and four flat. The Fund's strongest positive contributor by price movement rose +39% and the weakest contracted -21%. Top contributors included Quickstep, RPM Global, Readcloud and Alcidion. The Fund also enjoyed some early success from two recent IPO's - Icetana and Open Learning. Notable detractors included Oventus and Schrole. The portfolio contains companies at various stages of the growth cycle. Cyan remain confident that their investment positions will be rewarded over time, noting that they are aware that this never happens in a straight line. |
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Fund Review: Bennelong Long Short Equity Fund January 2020
25 Feb 2020 - 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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25 Feb 2020 - Fund Review: Bennelong Long Short Equity Fund January 2020
By: Australian Fund Monitors
AFM Fund Review - January 2020 (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 15.88%.
- 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 0.96 and 1.60 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - January 2020 (pdf format)
Bond yields can be misleading
25 Feb 2020 - Ardea Investment Management
How can a negative yield bond deliver a positive return, or a positive yield bond deliver a loss?
Those used to conventional bond investments tend to focus on a bond portfolio's yield as a proxy for its expected return. This...
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25 Feb 2020 - Bond yields can be misleading
By: Ardea Investment Management
