ALPHA BETA ASIAN FUND

ATTACHED FILESAlpha Beta Asian Fund June 2014 (pdf format)

AARIA ROUND TABLE 2014

12 August 2014 in Sydney

We operate in the area of "real returns" and are eager to help our network of IFA's that operate outside the traditional static buy and hold methodology. This has led me to meeting the Association of Real Return Investment Advisers (ARRIA).

The Group has been established as a not-for-profit entity run by advisers for advisers. ARRIA is an initiative based on feedback and insights from advisers regarding the challenges that they face in using Real Return investment strategies, which they believe are able to deliver tangible solutions to meet their client's objectives.

ARRIA is hosting a round table discussion on Tuesday 12^th August, from 12pm to 4.30pm, in Sydney and offers a valuable opportunity to meet with likeminded advisers. The agenda for the round table is as follows:

Round Table 1: Agenda

• What are the implications of developing Real Return outcomes for PI and the regulators?
• Panel discussion - which alternative "strategies" work when?
• Panel discussion - what are the new investment opportunities, "access" methods (e.g. LICs), strategies, asset classes and investment flavours?
• Tool time
• Open Forum

Click here to register for the Round Table event, or if you would like more information please contact:

Philip Reid   |   General Manager
Association of Real Return Investment Advisers Limited (ARRIA)
ABN 82 99 168 267 623
GPO Box 5025, Sydney NSW 2001
T 0411-828 097   E [email protected]

The next Round Table event to be held in Sydney will be on Tuesday 11 November 2014.

As an association ARRIA aims to:

• assist in setting and maintaining a higher level of professional standards for all Real Return Investment Advisers and all relevant Stakeholders in the real return investment industry.
• create an environment where all Real Return Investment Advisers and all relevant Stakeholders can network in appropriate forums to advance the exchange of information, best-practice and compliance issues;
• create an environment where all Real Return Investment Advisers and all relevant Stakeholders can leverage industry resources;
• assist with the gathering and dissemination of resources in order to help facilitate:
• the collation and provision of information of interest or relevance;
• the development and / or access of appropriate tools;
• access to and sourcing of relevant and appropriate expertise;
• liaise and co-ordinate communications with government, regulatory bodies, other relevant industry associations and general service providers in the real return investment industry;
• whether undertaken with or without other participants; to promote, organise, conduct and/or participate in meetings, lectures, seminars, study groups, conferences, education, training and counselling courses for the purposes of increasing and advancing the knowledge and understanding of all facets and issues affecting or related to Real Return Investment Advisers and all relevant Stakeholders in the real return investment industry;

The operations of ARRIA are overseen by a Board, under the direction of the associations' corporate constitution and guidance of the directors. Both Directors and the Board are elected by the members on a rotation policy.

ATTACHED FILESARRIA Round Table (pdf format)

Financial System Inquiry - Public Forum

Presented by: The Committee of the Financial System Inquiry

The Committee of the Financial System Inquiry invites members of the public to attend a Public Forum to discuss the Inquiry.

The Chair of the Inquiry, Mr David Murray AO will attend each forum with members of the Committee. The forums are open for anyone to attend and provide an opportunity for members of the public to hear about the Inquiry, ask questions of the Committee, and raise issues for examination by the Inquiry.

Forums will be held in Perth, Melbourne, Brisbane and Sydney during August, with venues to be advised shortly.

Interested persons can register online.

Dates

• Perth: Wednesday 13 August, 6pm - 8pm - venue tba
• Melbourne: Thursday 14 August, 6pm - 8pm - venue tba
• Brisbane: Tuesday 19 August, 6pm - 8pm - venue tba
• Sydney: Wednesday 20 August, 6pm- 8pm - venue tba

If you would like to attend this education event, please click here to register.

Continuing Professional Development

AFM have been accredited by the Financial Planning Association of Australia to issue CPD points.

What you need to do:

Read the most recent Fund Review for any of our research clients, and then answer 5 straightforward questions, these are presented in multiple choice format. An 80% or more success score will provide 0.5 CPD points, with a certificate provided as proof of completion.  There is no cost for this service.

>> Read the Fund Review

>> Complete the Test

Reading the review and answering the questions will take approximately 10 minutes to complete.

Certified Financial Planner (CFP) professional members are required to keep up to date with industry knowledge to maintain their professional proficiency and status. This continuing professional development translates to CPD points which are to be maintained and recorded over a three year period (triennium).  The current triennium runs from 1 July 2012 - 30 June 2015. CFP professionals must achieve a total of 120 CPD points during each three year period. The breakdown of these points needs to be as follows: 

• at least 50% accredited,

• 50% non-accredited 

• including 3 ethics points.

CFP professionals must accumulate a minimum 35 points each year. 

This week's Clippings is going to attempt to multi-task, (not your scribe's strongest point) or at least cover a number of different topics. Feedback (positive or negative) is welcome.

Firstly AFM's Research Manager, Sean Webster has taken a look below the surface of yesterday's poor employment numbers (6.4% against the market expectation of 6.1%) which helped trigger a fall of almost 1c in the Aussie dollar, and led to further expectations of the RBA easing official rates by Christmas. RBA Governor Glen Stevens came out today and tried to pour cold water on that view, but it would certainly seem that any rate rise might be further off than previously expected.

Sean's piece, 'Lies, damn lies and statistics' is not suggesting there was any fiddling of the books, just that the ABS has made some significant changes to its data collection and survey methodology, and yesterday's numbers are the first example of the resultant numbers. For those wondering why the numbers were such a surprise it makes excellent reading.

What might also have impacted the unemployment rate was the never ending budget saga, which three months after budget night is still being debated in the media at least, as debate in parliament has been interrupted by Federal MP's winter overseas holidays (apologies, "fact finding tours"). Business hates uncertainty, almost as much as a bad budget. With the final budget outcome yet to be determined by negotiation with the minor parties in the Senate, including the uncertain Clive Palmer, business confidence and patience might be running as low as Treasurer Joe Hockey's.

Elsewhere Sean also unearthed this excellent article entitled The Great Fee Debate - Resetting Manager and Investor Expectations. If there's one subject guaranteed to generate ill feelings, let alone a debate, it is the quantum and structure of fund manager's fees. We have raised this issue before, and it was front and centre in David Murray's interim FSI report a few weeks ago, but Jonathan Rochford of Narrow Road Capital has some excellent points to make - most of all his number one factor when choosing a manager: Integrity. At AFM we often ask ourselves a rhetorical question when speaking with managers: Do they see managing other people's money as an opportunity, or a responsibility? Only after that can one analyse the value for money the Manager is providing.

Finally ASIC has today released its clarification on how it will apply the wholesale investor test to self-managed superannuation funds (SMSF's).  As ASIC says: "This has long been an area of ongoing legal uncertainty" (and therefore probably quite a lucrative area of advice for the legal fraternity) where SMSF's were not necessarily judged to be wholesale investors even though their trustees were.

ASIC's revised approach can be viewed here, and as the previous approach (QFS 150) was issued ten years ago, and the SMSF sector has since grown dramatically to number over 500,000 funds, representing over one third of Australia's retirement pool by value, the clarity will be welcomed. As we read it, ASIC's new approach means that it is the Trustee's status as a wholesale investor which determines the wholesale status of their super fund. Maybe we should get a legal opinion on that. Or two just to be sure.

Specific results received this week include the following PERFORMANCE UPDATES:

Microequities Deep Value Microcap Fund recorded a return of 5.94% during July and 34.46% for the previous twelve months.

Returning a performance result of 3.20% in July, the Monash Absolute Investment Fund is now at 20.24% over the prior year with a volatility of 8.62% in line with the Index.

AFM are now accredited by the Financial Planning Association of Australia to issue CPD points for FUND REVIEWS.
This week's new reviews include:

Optimal Australia Absolute Trust, Aurora Fortitude Absolute Return Fund and also Insync Global Titans Fund

Read the most recent Fund Review for any of our research clients, and then answer 5 straightforward questions, these are presented in multiple choice format. An 80% or more success score will provide 0.5 CPD points, with a certificate provided as proof of completion. There is no charge for this service.

UPCOMING EVENTS:

Tuesday 12th August 2014, from 12pm to 4.30pm - ARRIA is hosting a round table discussion in Sydney, providing a valuable opportunity to meet with like-minded advisers. No cost to participants. Also in Melbourne on Tuesday 26 August and Brisbane on Tuesday 9 September.

Wednesday 13 August 2014 - Perth and Thursday 14 August - Melbourne: Financial System Inquiry - Public Forums to raise issues and discuss the inquiry. Brisbane and Sydney next week. Click here to see dates in your capital city and register.

Thursday 14th August in Sydney: AIMA Australia Education Forum. The forum will discuss regulatory, tax and other issues, as well as current observations and insights associated with a range of hedge fund investment products, including Australian unit trusts, Cayman funds, UCITS and listed investment companies. It is a "must attend" event for hedge fund managers reviewing their current products or considering development of new products.

14-15 August in Sydney: Alternative Investments Conference - Investigating the rise and rise of non-traditional high yield and low risk investment products, strategies and allocation in an era of prolonged volatility and low returns.

Wednesday 27 - Friday 29 August Money Management's Platforms and Wraps conference in the beautiful Hunter Valley, NSW. Covers the latest industry trends and innovation, while also exploring technology iniatives, client segmentation, data ownership, analytics, marketing and distribution, regulatory reform and consolidation. Pre-conference golf and wine tour of Hope Estate included. Special rate for fundmonitors.com members.

If you would like your Event listed in our calendar, please contact us.

This week's Now For Something Completely Different should either put to rest the argument that children are not influenced by what they see on TV, or that cats are more intelligent than dogs. Enjoy, and wishing you a safe and happy week-end.

Best wishes,

Chris
CEO, AUSTRALIAN FUND MONITORS

Connect with me on LinkedIn Twitter Facebook

Australian Fund Monitors are helping to raise awareness to support research into prevention and cure for cerebral palsy.  For more information visit www.cpresearch.org.au or contact me by email.

INSYNC GLOBAL TITANS FUND

ATTACHED FILESInsync Global Titans Fund June 2014 (pdf format)

• The Aurora Fortitude Absolute Return Fund  (AFARF) has a 8 year track record investing in ASX listed equities. A Market Neutral overlay is used across a multi strategy approach which allows for flexible asset allocation to maximise returns and minimise risk under a variety of market conditions and cycles.CIO John Corr has over 20 years financial market experience with a strong focus on risk.
• Significant use of low risk "long" derivatives and option overlays has provided positive returns with low volatility during periods of market dislocation. Risk statistics are impressive and shows the Funds risk philosophy; over 88% of monthly performances have been positive with no losing months in 2008, the Fund's largest drawdown is -2.09% and the Sharpe ratio 1.16.
• ASX listed Aurora Funds Limited was established on the merger of three existing fund management businesses, managing approx. $230m on behalf  of more than 2,500 retail and wholesale investors.

ATTACHED FILESARARF Fund Review June 2014 (pdf format)

AFM have released the most recently updated Fund Review on the Optimal Australia Absolute Trust.

CPD Points are now available for all AFM Fund Reviews. Read the review and answer 5 questions to earn half a point toward your continuing professional development.

We would like to highlight the following:

• 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 Fund returned 0.63% in June with an annual return of 5.66%.
• The Fund's low risk profile is shown by 84% of monthly performances to date being positive with the largest drawdown of -1.38%.
• The Fund's Sharpe Ratio is 1.79 and Sortino ratio of 5.25 compared to the ASX200 Accumulation Index.
• The investment team comprising George Colman, Peter Whiting supported by Stephen Nicholls and Justin Hay have over 100 years combined experience in equity markets.

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

Sean Webster

Research and Database Manager
Australian Fund Monitors

ATTACHED FILESOptimal Australia Absolute Trust - June 2014 (pdf format)