NEWS
23 Sep 2016 - King Tide NZ/Australian Long/Short Equity Fund
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| Fund Overview | The Fund seeks to outperform the market with less volatility than the market by allocating capital to a select group of eight to sixteen funds whose investment mandates allow them to use short selling of equities and equity indices, to use derivatives to manage risk, to use leverage and to hold large amounts of cash. In-depth proprietary research is used to select and monitor fund managers with particular emphasis on their ability to manage equity market risk through stock selection, short selling and the use of derivatives and cash. |
| Manager Comments | Results from the underlying funds were mixed in August. Of their thirteen Australian funds, five made money, three were down and five fell more than the market. The New Zealand managers, PIE (2 funds) and Aspiring, both contributed positively to the month. However, currency cost the Fund 108 bps. At the end of August, King Tide was invested in sixteen underlying funds, the maximum allowance. The weightings ranged between 2% and their largest weighting which is 11%. Click below to read the latest monthly report. |
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22 Sep 2016 - Fund Review: Bennelong Twenty20 Australian Equities Fund August 2016
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 - August 2016 (pdf format)
22 Sep 2016 - Affluence Investment Fund
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| Fund Overview | The Fund does not invest directly into any asset class, rather, it invests in investment managers which satisfy Affluence Funds Management's investment criteria; its investment philosophy is based on a formula developed by CEO/Portfolio Manager Daryl Wilson since the start of his career in 1999. The Fund targets total returns of at least 5% above inflation over rolling 3 year periods with a volatility of returns less than 50% of the ASX200 Index. The Fund also aims to provide investors with a distribution yield of at least 5% p.a. Finally, the Fund aims to outperform the Australian stock market (S&P/ASX 200 Accumulation Index) by at least 5% in any year in which that index delivers a negative return. To ensure appropriate diversity of managers and limit the potential for conflicts of interest, no more than 20% of the Fund will be invested with any one manager. Affluence seeks to achieve the Funds' investment objective by choosing attractively priced investments overseen by quality managers. The Fund uses a number of processes to identify potential investments including quantitative screens for investments which meet historical performance, volatility, and other criteria. They also use a number of external researchers and information sources to assist in this process. |
| Manager Comments | Amongst the 23 unlisted Fund investments, 16 delivered a positive return for the month. The best returning funds for the month were the Microequities Deep Value Microcap Fund and Wenthworth Williamson Fund. During the month, the fund made new investments in the Terra Capital Natural Resource Fund and the Auscap Australian Equities Long Short Fund. The 22 unlisted funds represented 60% of the total portfolio. The Fund provided exposure to 21 listed investment companies and 5 other securities, which represented 25% of the portfolio. The rest of the balance (15%) was held in cash. Click below to read the latest Fund Manager's report. |
| More Information |
21 Sep 2016 - Fund Review: APN Asian REIT Fund August 2016
APN Asian REIT Fund
Attached is our most recently updated Fund Review on the APN Asian REIT Fund.
We would like to highlight the following aspects of the Fund;
- APN is an ASX-listed fund manager specialising in property investment, with an investment team of six. Established in 1996, APN now has FUM of $A2.4bn including four REIT (Real Estate Investment Trust) funds.
- The APN Asian REIT Fund (Fund) is a property securities fund that invests in a quality portfolio of Asian REITs, listed on the securities exchanges of the Asian Region, with the ability to hold some cash and fixed interest investments.
- The Fund aims to deliver a competitive yield with lower risk than the market. The underlying stocks are selected based on a highly disciplined investment approach that focuses on the fundamentals and number of valuation approaches. The universe can include new IPO's, other corporate actions take place and / or corporate governance improvements at country or REIT level bring new stocks into focus.
- The Fund provides access to a wide spread of property-based revenue streams that are specifically analysed, selected and weighted with the aim of delivering strong and sustainable income returns. The Fund is an unhedged product.
- APN's Asian REIT Fund invests in a portfolio of 25-40 listed Asian REITs with a core philosophy of investing in properties with sustainable rental income streams.
- The Fund has delivered an annualised return of 17.10% p.a., since inception in July 2011 with a standard deviation of 9.36% p.a. The Sharpe and Sortino ratios are 1.45 and 2.71 respectively.
AFM Fund Review - August 2016 (pdf format)
21 Sep 2016 - NWQ Fiduciary Fund
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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 | The earnings season proved difficult for some of the Fund's long managers. This earnings volatility stabilised by month-end and these same positions began to rise following buying interest into the new month. The Beta managers attributed +0.01% for the month, avoiding the market downside. However, the Alpha managers were impacted more heavily by the reporting season, contributing -1.46% for the month. The Fund remains overweight to the Alpha or market neutral strategies to protect again future equity and bond market volatility. Click below to read the latest Fund's Report. |
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20 Sep 2016 - Pengana Absolute Return Asia Pacific Fund
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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 book contributed favourably (+0.8%) to overall performance due to positions in Galileo Japan Trust (GJT AU) and HTL International (HWA SP), which saw positive developments. The Stub-strategy continued to be robust posting a strong contribution to overall performance of 88 basis points. Since the start of the financial year, this strategy has contributed +1.75%. Stub trades in HK Trust (6823 HK) long vs PCCW (8 HK) short and Swire Properties (1972 HK) long vs Swire Pacific (19 HK) short contributed favourably. The Korean preference shares/local shares trades also contributed positively to performance, whilst offset by a negative contribution from the Earnings Surprise sub-strategy. The opportunity set in Asia continues to be robust, which is reflected in the Fund's gross exposure of 206%, with low Beta equity risk. Click below to read the latest Fund Manager's Report. |
| More Information |
20 Sep 2016 - Fund Review: Bennelong Kardinia Absolute Return Fund August 2016
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 a nine-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 11.71% p.a. with a volatility of 7.25%, compared to the ASX200 Accumulation's return of 4.87% p.a. with a volatility of 14.20%.
- 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 - August 2016 (pdf format)
19 Sep 2016 - Fund Review: Optimal Australia Absolute Trust August 2016
OPTIMAL AUSTRALIA ABSOLUTE TRUST
AFM have released the most recently updated Fund Review on the Optimal Australia Absolute Trust.
We would like to highlight the following aspects of the Fund;
- Optimal Australia 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 supported by Stephen Nicholls and Justin Hay have over 100 years combined experience in equity markets.
- In August, the Fund recorded a flat return (+0.02%), to take annualised return since inception to 8.62% p.a. The Fund's approach to risk is shown by the Sharpe ratio of 1.37 (Index 0.21), Sortino ratio of 2.86 (Index 0.19), both of which are well above the ASX 200 Accumulation Index and has recorded 79% positive months.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - August 2016 (pdf format)
19 Sep 2016 - APN AREIT Fund
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| Fund Overview | The senior management of APN FM all have significant experience in their fields. They include CEO Real Estate Securities, Michael Doble who has 25 years'experience having held various senior roles specialising in real estate valuation, consultancy and funds management. Immediately prior to joining APN in 2003 he was Head of Property at ANZ Funds Management. He is a fellow of the Australian Property Institute and FINSIA as well as holding a Bachelor of Business (Property). The Fund aims to deliver a competitive yield with lower risk than the market. The underlying stocks are selected based on a highly disciplined investment approach that focuses on the fundamentals and number of valuation approaches. The Fund provides access to a wide spread of property-based revenue streams that are specifically analysed, selected and weighted with the aim of delivering strong and sustainable income returns. The Fund is suited to medium to long term investors seeking a relatively high monthly income and some capital growth over the long term. |
| Manager Comments | The Fund returned 9.05% for the quarter ended 30 June 2016, underperforming the S&P/ASX 300 Property Accumulation Index by 0.18%. The stocks impacting the Fund's performance relative to the AREIT Index were due to the Fund's overweight positions in underperforming stocks such as Charter Hall Retail (CQR) and Cromwell Group (CMW), along with underweight positions in relatively stronger stocks like Dexus Property Group which was up 16.18%. Click below to read the complete Fund Manager's Report. |
| More Information |
17 Sep 2016 - Hedge Clippings
Regal wears the crown at Annual Hedge Fund awards
Philip King's Regal Funds Management was awarded the Australian hedge fund manager of the year title at the annual "Hedge Funds Rock" event held in Sydney this week, as well as taking out the award for the best long-short equity manager for the Regal Atlantic Absolute Return Fund, having returned 136% in 2015, and an annualised return of 40% since inception in 2004.
Established by Philip's brother Andrew King in 2004, Regal Funds Management is a fundamental Long Short manager that has been one of the mainstays of the Australian industry for over a decade. Whilst probably best described as "old school" Regal's investment team are not scared of taking risk provided they see the potential for significant upside. Since inception, the fund has achieved an annual return of over 100% on no less than five occasions, whilst just missing out on the sixth with a return of 99.35% in 2005.
Those returns have not come without significant volatility with a standard deviation of 36% since inception, and some significant drawdowns along the way, but for those investors prepared to accept risk, 40% per annum after fees over 12 years provides much to write home about.
Other winners on the night included Bennelong's market neutral fund, and NWQ Capital Management, a West Australian based fund of funds which took the award for the best investor in hedge funds. Hedge Clippings has noticed an increase in the number of fund of funds in recent times, with NWQ joined by the likes of Affluence Funds Management, and New Zealand based King Tide Asset Management, each of which focus on investing in local Australian absolute return funds.
Fund of Funds were on the nose with investors around the time of the GFC after they were caught out investing (mainly overseas) while providing a liquidity mismatch between their investors and their underlying investments. However it is good to see that the modern breed, such as those above are gaining traction amongst both advisors and investors who don't necessarily have the capacity or potential to complete the detailed due diligence and monitoring required to put together a truly risk averse portfolio of underlying funds.
While the returns provided by the likes of Regal are highly attractive, they are not always suitable for the everyday investor who now has the word RISK firmly tattooed on his or her hip pocket, and the current trend is very much towards returns being balanced by the requirement for capital protection.
Elsewhere this week the media had a field day with the revelation that Morphic Asset Management, a local long-short fund that traditionally seeks investment opportunities offshore, had taken, and profited from a short position in the listed Australian hedge fund manager Platinum Asset Management. The fact that Morphic, along with all other equity-based hedge fund managers take short positions every day in various companies that they perceive to be overvalued seemed to miss the point. Neither was it a case that Morphic considered Platinum to be badly managed - far from it. Shorting merely consists of selling an asset that is overvalued, irrespective of its underlying quality.
It's probably just easier when or if the company's a dog, and more newsworthy when its a fellow fund manager.
Insync Global Titans Fund rose 0.2% in July to take annualised return since inception to 9.63% p.a.
Bennelong Long Short Equity Fund returned -5.90% in August and +26.81% for the latest 24-months.
The Paragon Fund returned -7.80% after fees for the month of August. The Fund's latest 12-months return was 29.98%.
Totus Alpha Fund rose 2.58% for the month of August, outperforming the ASX 200 Accumulation Index which returned -1.55%, by 4.13%.
Pengana Global Small Companies Fund rose 3.3% in August 2016, compared to a 1.3% return for the MSCI AC World SMID Cap Index.
APN Asian REIT Fund returned +0.06% in August. Since inception, the Fund has an annualised return 17.10% p.a.
Optimal Australia Absolute Trust recorded a flat net return in August in a weaker market, with the ASX 200 Index down 2.3%.
Cyan C3G Fund rose 1.60% in August, outperforming the market (ASX 200 Total Return Index) that fell -1.55%, by 3.15%.
Bennelong Kardinia Absolute Return Fund returned -1.02% in August to take annualised return since inception to 11.71% p.a.
Signature Quantitative Fund returned -0.5% in August, outperforming the ASX 200 Accumulation Index by 1.05%.
KIS Asia Long Short Fund rose 0.52% for the month of August taking the return for the most recent 12 months to 18.12% versus an S&P/ASX 200 Accumulation Index of 8.96% over the same period.
Bennelong Twenty20 Australian Equities Fund returned -0.74% to take latest 6-months return to 13.42%.
FUND REVIEWS released this week: Jamieson Coote Bonds Active Fund; Supervised Global Income Fund; Insync Global Titans Fund; Bennelong Long Short Equity Fund;
And on that note, have a great weekend.
Regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
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