NEWS
Fund Review: Bennelong Long Short Equity Fund September 2020
13 Oct 2020 - Australian Fund Monitors
Latest Fund Review for the Bennelong Long Short Equity Fund is now available. The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index...
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13 Oct 2020 - Fund Review: Bennelong Long Short Equity Fund September 2020
By: Australian Fund Monitors
AFM Fund Review - September 2020 (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 16-years' track record and an annualised returns of 15.98%.
- The consistent returns across the investment history highlight 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 0.97 and 1.63 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - September 2020 (pdf format)
Performance Report: Paragon Australian Long Short Fund
12 Oct 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund has risen +22.47% over the past 12 months, outperforming the ASX200 Accumulation Index by +32.68%. Since inception in March 2013, the Fund has returned +11.99% p.a. vs the Index's annualised return of +6.15%.
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12 Oct 2020 - Performance Report: Paragon Australian Long Short Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market. |
| Manager Comments | The Fund returned -7.4% in what Paragon described as a volatile month globally. Despite this, the Fund delivered +15.23% for the quarter vs the Index's -0.44%. Portfolio protection/hedges fell, with both gold and treasuries down -4.2% and -3.0% respectively. Positive contributors for the Fund were Chalice and West African which were more than offset by declines across the Fund's gold, silver and technology holdings. Paragon view the pullback in gold as merely a correction after a strong run. The Fund ended the month with 27 long positions, 5 short positions and a net exposure of 123%. |
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Performance Report: Bennelong Long Short Equity Fund
9 Oct 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund has risen +36.89% over the past 12 months against the ASX200 Accumulation Index's -10.21%. Since inception in February 2002, the Fund has returned +15.98% p.a. vs the Index's annualised return of +7.34%.
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9 Oct 2020 - Performance Report: Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Fund Overview | In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. The Bennelong Market Neutral Fund, with same strategy and liquidity is available for retail investors as a Listed Investment Company (LIC) on the ASX. |
| Manager Comments | The Bennelong Long Short Equity Fund has risen +36.89% over the past 12 months against the ASX200 Accumulation Index's -10.21%. Since inception in February 2002, the Fund has returned +15.98% p.a. vs the Index's annualised return of +7.34%. The Fund's capacity to outperform in falling markets is highlighted by the following statistics (since inception): Sortino ratio of 1.63 vs the Index's 0.35, maximum drawdown of -17.73% vs the Index's -47.19%, and down-capture ratio of -162%. The Fund's down-capture ratio indicates that, on average, it has risen during the market's negative months. The Fund returned -3.26% in September, outperforming the Index by +0.4%. Half of the Fund's pairs made a positive contribution. The top and bottom three pairs made a similar offsetting contribution, with the net contribution slightly negative. Bennelong noted the negative return was a result of a broad spread across 15 negative pairs. It was also spread across sectors with no one sector standing out. The top and bottom pairs for the month were long Netwealth (NWL) / short IOOF (IFL) and long PointsBet (PBH) / short SkyCity (SKC). In their latest report, Bennelong discuss the sell-off in equity markets in September. They highlight that the declines were not isolated to those markets that have risen most since the March lows (namely the US and China), with markets like the UK and France, which have struggled to recover, falling further on fears of a resurgence in COVID-19 infections. They also provide their thoughts on why Australia isn't outperforming given the virus is under control, as well as Australia's relatively strong fiscal position. This is discussed in more detail in the report. |
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Performance Report: Touchstone Index Unaware Fund
2 Oct 2020 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +3.36% in August, outperforming the ASX200 Accumulation Index by +0.53% and taking annualised performance since inception in April 2016 to +6.90% with an annualised volatility of 15.77%.
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2 Oct 2020 - Performance Report: Touchstone Index Unaware Fund
By: Australian Fund Monitors
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| Fund Overview | The portfolio is constructed using Touchstone's Quality-At-a-Reasonable-Price ('QARP') investment process. QARP is a fundamental bottom-up process, however, it also incorporates a top-down risk management framework designed to successfully manage the portfolio during varying market conditions and economic cycles. The Touchstone Fund is concentrated, typically holding between 15-20 stocks. No individual stock will ever make up more than 10% of the portfolio at any one time. The Investment Manager may temporarily exceed the exposure limits of the Fund occasionally, particularly during periods of market volatility, to allow for holdings in excess of this 10% limit where the increase in value of the underlying security is due to market movement. The Fund may also hold between 0-50% of the portfolio in cash. The Fund has a high level of associated risk, therefore, the minimum suggested investment time-frame is 5 years. |
| Manager Comments | As at the end of August, the Fund held 19 stocks with a median position size of 4.7%. The portfolio's holdings had an average forward-year price/earnings of 21.9, forward-year tangible ROE of 14.8% and forward-year dividend yield of 2.6%. The Fund ended the month with a cash weighting of 6.1%, up from 5.5% as at the end of July. |
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Performance Report: Delft Partners Global High Conviction
1 Oct 2020 - Australian Fund Monitors
The Delft Partners Global High Conviction Strategy rose +1.74% in August, taking annualised performance since inception in July 2011 to +14.22% with an annualised volatility of 11.74%.
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1 Oct 2020 - Performance Report: Delft Partners Global High Conviction
By: Australian Fund Monitors
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| Fund Overview | The quantitative model is proprietary and designed in-house. The critical elements are Valuation, Momentum, and Quality (VMQ) and every stock in the global universe is scored and ranked. Verification of the quant model scores is then cross checked by fundamental analysis in which a company's Accounting policies, Governance, and Strategic positioning is evaluated. The manager believes strategy is suited to investors seeking returns from investing in global companies, diversification away from Australia and a risk aware approach to global investing. It should be noted that this is a strategy in an IMA format and is not offered as a fund. An IMA solution can be a more cost and tax effective solution, for clients who wish to own fewer stocks in a long only strategy. |
| Manager Comments | The Strategy has achieved an average positive monthly return of +3.23% vs the Index's +2.94%. The Fund's Sharpe and Sortino ratios for performance since inception are 1.02 and 1.82 respectively. With respect to the Index's 10 best and worst months since the Strategy's inception, the Strategy has outperform in 7 out of 10 of the Index's worst months and 9 out of 10 of the Index's best months. This highlighted the Strategy's capacity to perform well in both rising and falling markets. |
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Performance Report: Laureola Investment Fund
30 Sep 2020 - Australian Fund Monitors
The Laureola Investment Fund rose +1.29% in August taking 12-month performance to +10.87% with a volatility of just 2.09% for a Sharpe ratio of 4.62 vs the S&P500 Total Return's Sharpe of 1.00. Since inception in May 2013, the Fund has...
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30 Sep 2020 - Performance Report: Laureola Investment Fund
By: Australian Fund Monitors
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| Fund Overview | The investment strategy of The Laureola Investment Fund is dynamic and flexible, designed to take advantage of the frequent but temporary pricing anomalies of an asset class that is not yet fully understood by the majority of participants. Laureola Advisors applies 'best practices' common in the management of traditional assets, particularly the use of independent, in-house, proprietary research. |
| Manager Comments | Performance in August was driven by realised gains as 4 policies matured with a total of $3.3 million in payouts. YTD the Fund has experienced 18 maturities which in Laureola's view is a remarkable number on a portfolio of 165 policies. The maturities allow the Fund's Advisors to offer a 5% payout, highlighting the Fund's credentials as a Fixed Income Alternative. Laureola noted supply in the Life Settlements market is growing at a double digit pace, with the consequences of COVID expected to increase the supply in the secondary market. |
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Performance Report: Ark Global Fund - Class B AUD Unhedged
30 Sep 2020 - Australian Fund Monitors
The Ark Global Fund - Class B AUD Unhedged has returned +8.31% p.a. with a down-capture ratio of -69.4% since inception in July 2017, highlighting its capacity to significantly outperform in falling markets.
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30 Sep 2020 - Performance Report: Ark Global Fund - Class B AUD Unhedged
By: Australian Fund Monitors
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| Fund Overview | The investment objective of the Fund is to achieve long-term capital appreciation with low correlation to global equity markets through investment in the Underlying Fund. Fund One is a global macro fund that utilises quantitative research including machine learning techniques and fully automated trading algorithms which will aim to generate positive uncorrelated returns relative to any significant equity benchmark. The traded instruments are either major FX pairs or the most liquid exchange traded stock index, bond, and commodity futures across North America, Europe and Asia Pacific. The algorithm backtests over 10 years of tick data and in order to do so effectively requires machine learning to filter noise and identify meaningful signals, which results in statistically significant prediction of price movements. In production this processing is done in real time and the portfolio reacts to asset movements by rebalancing automatically to the desired risk exposure through the market impact optimised execution logic. Risk management layers built into the algorithm have been developed using the experience the team has gained from their decades in highly liquid fast-moving markets in the proprietary High Frequency Trading world. This allows the system to trade autonomously but safely to all trading opportunities and potential system issues, and to alert the team to any behaviour outside of strictly controlled bounds. The Fund is a 'feeder fund' which indirectly gains exposure to the underlying assets by investing all or substantially all of its assets in the Underlying Fund. The Fund may retain a certain amount of cash from the investment in the Fund for the purpose of payment of costs, fees, hedging and expenses. |
| Manager Comments | The Fund returned -2.9% in August. The best performing assets for the month were: Euro Stoxx 50 (+1.71% of NAV), Euro/USD (+0.86% of NAV) and 10-yr US Treasury Note (+0.80% of NAV). The worst performing assets were: E-mini S&P500 (-0.47% of NAV), AUD/USD (-1.02% of NAV) and S&P/TSX 60 (-1.39% of NAV). |
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Performance Report: Insync Global Quality Equity Fund
30 Sep 2020 - Australian Fund Monitors
The Insync Global Quality Equity Fund rose +6.73% in August, outperforming AFM's Global Equity Index by +3.94% and taking 12-month performance to +16.90% vs the Index's +6.41%. Since inception in October 2009, the Fund has returned +14.25%...
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30 Sep 2020 - Performance Report: Insync Global Quality Equity Fund
By: Australian Fund Monitors
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| Fund Overview | Insync employs four simple screens to narrow the universe of over 40,000 listed companies globally to a focus group of high-quality companies that it believes have the potential to consistently grow their profits and dividends. These screens are: size of the company, balance sheet performance, valuation and dividend quality. Companies that pass this due diligence process are then valued using dividend discount models, free cash flow yield and proprietary implied growth and expected return models. The end result is a high conviction portfolio typically of 15-30 stocks. The principal investments will be in shares of companies listed on international stock exchanges (including the US, Europe and Asia). The Fund may also hold cash, derivatives (for example futures, options and swaps), currency contracts, American Depository Receipts and Global Depository Receipts. The Fund may also invest in various types of international pooled investment vehicles. |
| Manager Comments | At month-end, the portfolio's top holdings included PayPal, Facebook, Adobe, Visa, Microsoft, Domino's Pizza, S&P Global, JD Sports Fashion, Walt Disney and Nvidia. The top three megatrends in the portfolio by weight were the 'Digitisation' megatrend (14% of the portfolio), 'Age related health solutions' megatrend (12%) and the 'Cashless Society' megatrend (12%). In their latest report, Insync discuss the 'Universal Basic Income' megatrend; a secular shift towards value-for-money based consumption. They expect that by 2040 automation, AI and robots will be in operation in businesses across all industries, improving efficiencies and creating profit while displacing many jobs. The UBI megatrend is one of the 16 global megatrends in the portfolio and exemplifies the diversity of the Fund's investments. |
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Performance Report: 4D Global Infrastructure Fund
30 Sep 2020 - Australian Fund Monitors
The 4D Global Infrastructure Fund returned -2.15% (AUD) in August with performance impacted by the rise in the AUD. Since inception in March 2016, the Fund has returned +8.39% p.a. with an annualised volatility of 12.27%.
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30 Sep 2020 - 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 | The strongest performer for August was German airport group Fraport, up +16.4% as continental Europe travel recommences. The weakest performer was Brazilian toll road operator Ecorodovias, down -11% as COVID-19 continues to spike in Brazil, putting pressure on the overall market. 4D Infrastructure noted they continue to position the portfolio for the prevailing economic outlook and infrastructure as a means of a recovery as they look to capitalise on the raft of opportunities currently on offer. |
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Performance Report: The Airlie Australian Share Fund
29 Sep 2020 - Australian Fund Monitors
The Airlie Australian Share Fund rose +4.18% in August, outperforming the ASX200 Accumulation Index by +1.35% and taking 12-month performance to +4.43% vs the Index's -5.08%. Since inception in June 2018, the Fund has returned +6.44% p.a....
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29 Sep 2020 - Performance Report: The Airlie Australian Share Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is long-only with a bottom-up focus. It has a concentrated portfolio of 15-35 stocks (target 25). Maximum cash holding of 10% with an aim to be fully invested. Airlie employs a prudent investment approach that identifies companies based on their financial strength, attractive durable business characteristics and the quality of their management teams. Airlie invests in these companies when their view of their fair value exceeds the prevailing market price. It is jointly managed by Matt Williams and Emma Fisher. Matt has over 25 years' investment experience and formerly held the role of Head of Equities and Portfolio Manager at Perpetual Investments. Emma has over 8 years' investment experience and has previously worked as an investment analyst within the Australian equities team at Fidelity International and, prior to that, at Nomura Securities. |
| Manager Comments | The Airlie Australian Share Fund rose +4.18% in August, outperforming the ASX200 Accumulation Index by +1.35% and taking 12-month performance to +4.43% vs the Index's -5.08%. Since inception in June 2018, the Fund has returned +6.44% p.a. vs the Index's annualised return over the same period of +4.29%. These returns have been achieved with a similar level of volatility to the market. At month-end, the portfolio's top positions included Aristocrat Leisure, Aurizon Holdings, BHP Group, Coles Group, CBA, CSL, Macquarie Group, Mineral Resources, Origin Energy and Wesfarmers. By sector, the top three sectors were Financials (23% of the portfolio), Consumer Discretionary (14%) and Industrials (10%). The Fund ended the month with 5% in cash. Last week Australian Fund Monitors' CEO, Chris Gosselin, caught up with Matt Williams, Portfolio Manager at Airlie Funds Management, to discuss the performance of the fund throughout 2020. You can either click here to watch the video or click here to listen to the interview as a podcast. |
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