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 10.51% p.a. with a volatility of 6.95%, compared to the ASX200 Accumulation's return of 5.33% p.a. with a volatility of 13.49%.

• 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.

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - March 2018 (pdf format)

Macro risk and volatility remain front and centre

Macro issues seem to be centred on geopolitical risk, particularly where The Donald is involved. Mind you, his "my button is bigger than yours" policy approach seems to be moving things along on the Korean Peninsula more than those of his predecessor, so while his style may be more "hardball" than "diplomatic", it might just also turn out to be more effective.

Syria, and in particular with Russia and Iran's involvement, may be a harder nut to crack. From a market perspective investors are possibly becoming acclimatised to Trump's Twitter Diplomacy, which in itself may be a risk when, or if, the rhetoric results in an actual physical or military confrontation.  

Meanwhile turning to the markets, in spite of the increased volatility of the past two months, the upcoming US earnings season is likely to see continuing growth in positive numbers. As the US economy picks up, and while wages/inflation remain reasonably benign, interest rates rises will remain firmly on the agenda as the market's number one economic risk. 

What has recently changed in the US is the market's perception and realisation, particularly over the issue of privacy and personal data for tech stocks and the FANGS, which have had such a stellar run for the past few years. Suddenly people are realising that if you're not paying for a service or product, you are the service or product.

Meanwhile taking a look at the local market and funds' performance YTD and over the past 12 months, where apart from January in the US, there is a sea of red:

Hedge and absolute return funds risky? Hardly! Although choppy markets certainly make things more difficult in a general sense, equity based funds' average outperformance of almost 8% over 12 months, with 85% of all funds' returns beating the market, would seem to answer their critics. 

Next week sees a recommencement of the Hayne Royal Commission, with the spotlight turning to the Financial Services sector and wealth advice (or more correctly in some cases, lack of it). Whilst unlikely to be quite as explosive as envelopes stuffed with cash passing across the desks of suburban bank managers' desks, it will still cause plenty of embarrassment to those in the spotlight, and others in the advice industry.

Expect particular attention not only on fees being charged with no advice given, but also over promotion of in house products on dealer groups' approved product lists (APL's), and vertical integration of the industry overall.

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;

• 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.

• The investment team comprising George Colman, Peter Whiting, and Stephen Nicholls bring 100 years combined experience in equity markets.

• The Fund has an annualised return since inception of +8.43%. The Fund's approach to risk is shown by the Sharpe ratio of 1.41 (Index 0.27), Sortino ratio of 2.95 (Index 0.28), 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.

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - March 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 1.00 and 1.64 respectively.

For further details on the Fund, please do not hesitate to contact us.

Australian Fund Monitors

ATTACHED FILESAFM Fund Review - March 2018 (pdf format)