MORPHIC GLOBAL OPPORTUNITIES FUND

ATTACHED FILESMorphic Global Opportunities AFM Monthly Review February 2014 (pdf format)

April fools' day came and went this week with little surprise, but luckily for the recently departed Assistant Treasurer, Arthur Sinodinos his appearance at the Independent Commission Against Corruption (ICAC) didn't occur until two days after. The media and others would have had a field day with the headlines covering the story.

For those not familiar with the details, Sinodinos received $200,000 a year to act as chairman of a company seeking a NSW state government contract to deliver water infrastructure to a growing region of Sydney's north west. As such his role took an annual total of 45 hours, or nearly $4,500 on an hourly basis.

Not a bad gig if you can get it, particularly as it only required him to be, in his words "a door opener", but it appears one without a very clear memory based on the number of times he couldn't remember or recall many details to assist the Commission. Adding to his memory lapse was that he forgot to mention to the NSW Premier, presumably one of the doors he opened, that if successful he was personally in line to pick up $20 million for his troubles.

Regular readers of "Hedge Clippings" might wonder if this is relevant to our weekly update on managed funds, but given that as Assistant Treasurer Sinodinos was until very recently the champion of changing the FoFA regulations, we think it is. What is relevant that he was trying to soften the FoFA legislation around conflicted remuneration (otherwise known as commissions) not strengthen them. If anyone was better placed, or more personally involved, to understand conflicts of interest I'd like to know who.

Having said there was a significant amount of misinformation and fear mongering in the campaign against the FoFA changes, but that in itself was caused by the lack of clarity and transparency on what the REAL effects would be.  And as the previously mentioned Sinodinos would now realise, transparency is essential if one is to avoid confusion, or misinterpretation. Unless of course clarity and transparency are not in your best interests.

This week's "and now for something completely different" is probably topical.

And now to matters financial. Equity markets both here and in the US saw very narrow trading ranges in March, with the S&P500 trading in a 49.3 point range even as it topped new highs. By comparison January and February ranges were 111.18 and 130 respectively. Meanwhile the ASX200 equivalent was 173 points in March, compared with 224 points in January, and 409 points in February. Volatility has collapsed accordingly, and given the concerns over the credit situation in China, military activity in Eastern Europe, and the growing realisation that interest rates can only rise, albeit possibly not for another 12 months.

Against this backdrop the ASX200 Accumulation index rose 0.29% in March to take the YTD return to just 2.08%. Early indication of March fund returns are significantly positive with the Monash Investment Fund the standout to date with an estimated +4.6%. 

Specific results received this week include the following PERFORMANCE and NEWS UPDATES:

The Pengana Australian Equities Fund recorded a 1.44% return during February 2014 and 7.30% for the preceding 12 months with a volatility of 6.41%.

The Monash Absolute Investment Fund returned a solid 4.6% during March (Index 0.20%) and 27.72% (Index 12.0%) over the last 12 months.

Updated FUND REVIEWS released this week included:

AFM's updated Fund Review for the Optimal Australia Absolute Trust  has been released. The fund is characterised by very low risk with an annualised standard deviation 3.55% (Index 15.07%) and a Sharpe Ratio since inception of 1.76.

Insync's Global Titans Fund Review shows the Fund delivering an annualised return of 11.33% and annualised standard deviation of 7.59% (since inception in October 2009) with sound risk-reward statistics.

Aurora Fortitude Absolute Return Fund - The Fund is characterised by steady returns and very low risk. Since inception (March 2005) the Fund has returned 8.12% pa.

FUTURE EVENTS

If you know of any upcoming hedge fund industry Events, or would like your Event listed in our calendar, please contact us.

And now for something completely different this week, although this clip is about a golf situation it presents a real-life dilemma regarding ethics. The real question is: What would the aforementioned Sinodinos do in this situation?

On that note, I hope you have a safe and happy weekend.

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.  To celebrate the 20th anniversary of their #CBDGolf Escape! charity golf event, Cerebral Palsy Alliance are holding an online raffle. The prize will be a Toyota Yaris YR Hatch 3 Door, plus many amazing prizes inside the car - A total prize value of $22,000...See more

For more information visit www.cpresearch.org.au or contact me by email.

INSYNC GLOBAL TITANS FUND

ATTACHED FILESInsync Global Titans Fund AFM Review - February 2014 (pdf format)

Advent Connect, 2014

3 April 2014 - Taxi Kitchen, Melbourne

Stay up to date on industry trends with fresh insights from industry thought leaders, your peers, and Advent¹s executive management team.

Event highlights include:

• Advent Overview with Chris Momsen, Executive Vice President, Global Sales & Solutions Management
• Panel on Cloud Computing and the Future of Financial Services, moderated by Alex Wise, Select Funds

Panelists include:

• Brian Smith, Risk Metrics and Chris O¹Connor, Eze Castle Software

Keynote presentations on:

• Regulatory issues by Nikki Bentley, Partner at Henry Davis York
• Current economic conditions in the region by Savanth Sebastian, Equities Economist at Commonwealth Bank 
• Regional Advent Community and Global Services Update

Being held in MELBOURNE on Thursday 3 April 2014: 5-9pm at the Taxi Kitchen. Register Here.

Attached is our most recently updated Fund Review on the Optimal Australia Absolute Trust.  

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 has recorded out-performance of the market since inception in September 2008 with approximately 83% of monthly performances having positive returns and the largest drawdown was -1.38% (Index -33.11%). 
• The Fund has sound Sharpe and Sortino ratios at 1.76 and 5.14 since inception, as compared to the Index ratios of 0.19 and 0.15 respectively.
• The investment team comprising George Colman, Peter Whiting and Stephen Nicholls have close to 90 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 FILESAFM Fund Review Optimal Australia Absolute Trust February 2014 (pdf format)

Advent Connect, 2014

1 April 2014 - The Establishment Hotel, Sydney

OR

3 April 2014 - Taxi Kitchen, Melbourne

Stay up to date on industry trends with fresh insights from industry thought leaders, your peers, and Advent¹s executive management team.

Event highlights include:

• Advent Overview with Chris Momsen, Executive Vice President, Global Sales & Solutions Management
• Panel on Cloud Computing and the Future of Financial Services, moderated by Alex Wise, Select Funds

Panelists include:

• Brian Smith, Risk Metrics and Chris O¹Connor, Eze Castle Software

Keynote presentations on:

• Regulatory issues by Nikki Bentley, Partner at Henry Davis York
• Current economic conditions in the region by Savanth Sebastian, Equities Economist at Commonwealth Bank 
• Regional Advent Community and Global Services Update

Seats are limited. RSVP for the Sydney Event here. We look forward to seeing you! 

Also being held in MELBOURNE on Thursday 3 April 2014: 5-9pm at the Taxi Kitchen. Register for Melbourne Here.