NEWS
Performance Report: Bennelong Kardinia Absolute Return Fund
27 Oct 2017 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund increased +0.66% in September. Since inception in May 2006, the Fund has outperformed the ASX200 Accumulation Index by +5.41% per annum.
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27 Oct 2017 - 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 | Positive performers included South32 (+0.22%), RCR Tomlinson (+0.19%) and Costa Group (+0.15). Negative contributors included Amcor (-0.12%), BHP (-0.09%) and Evolution (-0.09%). The short book performed well, with Fortescue and Telstra the key contributors adding +0.2% for the month. Net equity market exposure, including derivatives, was reduced from 35.8% to 22.4% as the Manager sold their holdings in ANZ and NAB and added short positions in Fortescue and Share Price Index Futures. |
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Performance Report: Glenmore Australian Equities Fund
27 Oct 2017 - Australian Fund Monitors
The Glenmore Australian Equities Fund returned +3.05% in September, taking performance since inception in June 2017 to +13.42%.
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27 Oct 2017 - 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 for the month included Mastermyne (+29.6%), HUB24 (+20.0%), Fiducian Group (+12.5%), NRW Holdings (+12.2%), Appen (+11.7%) and Alliance Aviation Services (+5.9%). Detractors from performance included APA Group, Moelis Australia, Sydney Airport and Pinnacle Investments - however, the Manager notes that none were overly material, with no specific news flow released during the month. |
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Performance Report: KIS Asia Long Short Fund
27 Oct 2017 - Australian Fund Monitors
The KIS Asia Long Short Fund returned +1.82% in September with an annualised return since inception in October 2009 of +13.79%.
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27 Oct 2017 - 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 | The Fund was able to generate returns on both the long and short side of the book. On the long side the Manager was successful on 53% of their ideas. KIS Capital note the majority of the alpha came from their 'slug ratio' which is a ratio of how much a winning trade generates vs a losing trade, here the ratio was 1.8x. On the short side 51% of the Manager's ideas were successful, their slug ratio was 1.9x. KIS Capital participated in Cre8tek Limited's capital raising and bought shares on the market during September, this contributed +0.28%. They also participated in a block trade to sell some of their exposure in Cardinal Resources which contributed +0.22%. KIS Capital took profits on a long position in Independence Group NL early in the month as they felt the rally in stock was too fast, they started to rebuild the long position later in the month after the stock slipped back to less elevated levels. On the losing side no single name lost the portfolio more than 0.2%. |
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Performance Report: Allard Investment Fund
27 Oct 2017 - Australian Fund Monitors
The Allard Investment Fund returned +0.53% in September, taking annualised performance since inception to +9.20%.
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27 Oct 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 23.2% of the portfolio, down from 23.7% as at the end of August. The portfolio's weightings were decreased in the Industrials, IT, Health Care, Telco and Financials sectors while its weightings in the Utilities, Consumer Discretionary, Consumer Staples and Real Estate sectors were increased. The portfolio remains highly concentrated, with 52.7% of NAV held in the Fund's top 10 stocks. Geographically, Hong Kong and China make up most of the portfolio (43.4%), followed by Singapore (+14.3), India (+11.4%), Korea (+5.1%), Vietnam (+1.6%) and Indonesia (+1.0%). |
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Performance Report: Qato Capital Market Neutral Fund
27 Oct 2017 - Australian Fund Monitors
The Qato Capital Market Neutral Fund rose +0.76% in September, outperforming the ASX200 Accumulation Index by +0.78%.
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27 Oct 2017 - Performance Report: Qato Capital Market Neutral Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund seeks to preserve capital and maximise absolute returns through active and constant risk management, targeting monthly a net market exposure of 0% to hedge broader market risks by generally holding up to 50 S&P/ASX-100 positions (up to 25 long positions & 25 short positions). Historically, the strategy has been uncorrelated to traditional asset classes with a negative beta to equity markets. Qato Capital's process is entirely systematic - stock selection and risk management are all employed in a rules based approach. Positions in Qato's long-portfolio and short-portfolio are rotated monthly dependent upon their Q-Score ranking. The strategy employs no financial leverage/gearing to purchase securities, no derivatives and no financial products to imitate leverage. |
| Manager Comments | Positive contributors in September included long positions in Qantas, Lendlease (+10.27%), Cimic Group (+6.62%) and CYBG (+9.36%). Of Qato's short book, falls in TPG Telecom (-11.29%), Telstra (-4.90%), Fortescue (-10.88%), OZ Minerals, QBE (-4.12%), Newcrest Mining (-8.01%) and Evolution Mining (-8.68%) contributed positively. Negative contributors included a short position in South32 which rallied +14.78% and a long position in Flight Centre which fell -5.02%. Qato Capital note that September saw the addition of another element to the Qato Risk Model, which further complements the existing risk management process. Specifically, the prevailing global risk regime algorithm will allow Qato to dynamically adjust its risk management models. |
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Performance Report: Bennelong Australian Equities Fund
27 Oct 2017 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +1.56% in September, taking annualised performance since inception in January 2009 to +13.49%.
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27 Oct 2017 - 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 | The Fund benefited from strong returns during the quarter from Flight Centre, Reliance Worldwide and Costa Group. The largest detractors were Ramsay Health Care, Domino's Pizza Enterprises and Aristocrat Leisure as well as the Fund's underweight exposure to the strong performing Resources sector. Bennelong identify a rise in interest rates as a major risk to the Australian stock market, their view is that rates may lift, but not dramatically. Their belief is that higher rates will be attributable to higher inflation, which is likely to result from factors relating to innovation, demographics and under-employment. |
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Fund Review: Bennelong Kardinia Absolute Return Fund September 2017
25 Oct 2017 - Australian Fund Monitors
Latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available.
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25 Oct 2017 - Fund Review: Bennelong Kardinia Absolute Return Fund September 2017
By: Australian Fund Monitors
AFM Fund Review - September 2017 (pdf format)
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 10.67% p.a. with a volatility of 7.01%, compared to the ASX200 Accumulation's return of 5.26% p.a. with a volatility of 13.68%.
- 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.
AFM Fund Review - September 2017 (pdf format)
Performance Report: 4D Global Infrastructure Fund
20 Oct 2017 - Australian Fund Monitors
The 4D Global Infrastructure Fund increased +0.4% in September, taking annualised performance since inception in March 2016 to +14.35%.
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20 Oct 2017 - 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 | Positive performers in September included Brazilian rail operator Rumo (+15.1%), Canadian pipeline operator Pembina (+11.2%) and US gas transporter Cheniere (+9%). Negative contributors included UK satellite operator Inmarsat (-8.1%) and Spanish airport operator AENA (-4.5%). The Fund remains overweight in user pays and underweight regulated utilities, and the Manager noted they are beginning to allocate cash to high quality, fundamentally attractive stocks that have lagged over the past few months. The Manager has a positive outlook for global listed infrastructure over the medium term. They note there has been a significant underinvestment in infrastructure around the world over the past 30 years and that public sector fiscal and debt constraints will limit governments' ability to respond, resulting in an increasing need for private sector capital as part of the funding solution. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
20 Oct 2017 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund returned +1.06% in September, outperforming the ASX200 Accumulation Index by +1.08%.
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20 Oct 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 | The Fund's outperformance over the quarter is largely due to a number of its larger ex-20 positions, including Reliance Worldwide, Flight Centre and Costa Group. Negative contributors included Domino's Pizza and Aristocrat Leisure as well as the Fund's underweight exposure to the resources sector. Bennelong note that, given recent stock market returns and a low ASX200 VIX Index among other factors, they believe selective ex-20 stock picking may be able to contribute positively to investor returns. They identify a rise in interest rates as a major risk to the Australian stock market, their view is that rates may lift, but not dramatically. Bennelong's belief is that higher rates will be attributable to higher inflation, which is likely to result from factors relating to innovation, demographics and under-employment. |
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Performance Report: Optimal Australia Absolute Trust
20 Oct 2017 - Australian Fund Monitors
The Optimal Australia Absolute Trust returned +2.79% in September, demonstrating its ability to outperform when the market is flat or down.
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20 Oct 2017 - Performance Report: Optimal Australia Absolute Trust
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. |
| Manager Comments | The Trust's short positions contributed positively, however, most of the performance was driven by the long portfolio. Positive performers included CYBG, Automotive Holdings, Macquarie Bank and Janus, as well as the Trust's investment in lithium producers - Orecobre, Galaxy Resources and Pilbara Minerals. The Trust's increased exposure to retail REITs amid the Amazon-inspired sell-off also contributed positively. ARCO increased the Trust's long position in Telstra, however, this remained a drag on overall performance. They also moved to exit their investment in Santos, and closed their short position in Woodside. ARCO note that ultra-low interest rates may continue to underpin expensive equity valuations, however, they believe that this won't last much longer. They note that offshore central banks seem keen to lift rates and tighten liquidity, and that despite there being less immediate upward pressure on rates in Australia, Australian banks have been tightening credit for some time. ARCO remain wary about the outlook for housing and its implications for the banking sector and the economy more broadly. |
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