NEWS
Performance Report: Gyrostat Absolute Return Income Equity Fund
15 Jul 2020 - Australian Fund Monitors
The Gyrostat Absolute Return Income Equity Fund rose +1.59% in June. Over FY20, the Fund delivered equity income of 6.0% from dividends and franking credits while outperforming the ASX200 Accumulation Index by +20.05%. Since inception in...
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15 Jul 2020 - Performance Report: Gyrostat Absolute Return Income Equity Fund
By: Australian Fund Monitors
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| Fund Overview | The investment objective is to deliver regular and stable income stream (from ASX20 dividends) in a low interest rate environment with capital security - a 'highly-defensive' asset class. Gyrostat has operated for 38 consecutive quarters within a 'hard' pre-defined risk parameter (no more than 3% capital at risk with the Fund's maximum draw-down 2.2% in any circumstances) always in place, delivering regular income by passing through ASX-20 dividends, and meeting returns guidance based upon market conditions (demonstrating increasing returns with market volatility). The Fund buys and holds ASX-20 and international assets with lowest cost protection always in place with upside. It is a conservative asset allocation. Note that Gyrostat have expanded their international assets within the Fund to include SP500, FANGS, Nikkei, Hang Seng, MSCI China, MSCI Developed and Developing markets. Advances in investment risk management enable cost-effective protection to always be in place for a 'hard' defined risk parameter (say no more than 3% capital at risk). Returns are designed to increase as volatility levels increase, as this provides more opportunities to lower protection costs. Investment Objectives: - Returns: 6% - 8% pa in trending markets, greater than 8% pa in volatile markets, BBSW90 + 3% in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.0% p.a.) from dividends and franking credits - Protection: No quarterly NAV draw-downs exceeding 3% Also includes a 'tail hedge' for gains on large market falls. |
| Manager Comments | The Fund also includes a 'tail hedge' for gains on large market falls. This was particularly beneficial to the Fund during February (Fund: +3.27%, ASX200 TR: -7.69%) and March (Fund: +5.80%, ASX200 TR: -20.65%), and contributed significantly to the Fund's outperformance over the Financial Year. Gyrostat noted market conditions in June enabled them to enter additional positions with the aim of increasing returns on any uplift in market volatility. The Fund's strategy allows for up to 15% of assets to be invested in international assets, with positions in the S&P500, NASDAQ, Hang Seng, MSCI Developed and emerging markets (among others). Gyrostat anticipate increasing levels of 'late cycle' market volatility given elevated geopolitical tensions, historically high debt levels and elevated valuations. |
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Fund Review: Bennelong Kardinia Absolute Return Fund June 2020
15 Jul 2020 - Australian Fund Monitors
The latest Fund Review for the Bennelong Kardinia Absolute Return Fund is now available. The Fund, which has been in operation for more than 10 years, has a long-biased, research driven, active equity long/short strategy and invests in...
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15 Jul 2020 - Fund Review: Bennelong Kardinia Absolute Return Fund June 2020
By: Australian Fund Monitors
AFM Fund Review - June 2020 (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.
- 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 8.36% p.a. with a volatility of 7.20%, compared to the ASX200 Accumulation's return of 5.29% p.a. with a volatility of 14.44%.
- The Fund also has a strong focus on capital protection in negative markets. Portfolio Managers Kristiaan Rehder and Stuart Larke 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 - June 2020 (pdf format)
Performance Report: Datt Capital Absolute Return Fund
10 Jul 2020 - Australian Fund Monitors
The Datt Capital Absolute Return Fund rose +8.24% in June, outperforming the ASX200 Accumulation Index by +5.63% and taking 12-month performance to +23.23% against the Index's -7.68%. Since inception in August 2018, the Fund has returned...
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10 Jul 2020 - Performance Report: Datt Capital Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | Our investment objectives are: 1) To minimise the risk of permanent capital loss 2) Generate a net return of 10% through the economic cycle An unconstrained, concentrated approach focused on superior risk-adjusted returns. The investment strategy: - targets long-term capital growth in a prudent manner, with an emphasis on capital preservation and low volatility in returns - aims to outperform in markets where equities are down - diversifies investments across asset classes and duration to reduce risk while maintaining relatively concentrated exposure to attractive investment opportunities - is an application of the Manager's investment process, that has no institutional constraints and is completely benchmark unaware |
| Manager Comments | The Fund's up-capture and down-capture ratios for performance since inception, 91.22% and 52.89% respectively, highlight the Fund's capacity to perform in line with the market during the market's positive months while protecting investors' capital during the market's negative months. At month-end, the portfolio comprised 30% CRE debt, 59% equities and 11% cash. The portfolio remains directed towards growth opportunities and special situations where Datt Capital feel there remains considerable upside despite the forecast weaker macroeconomic environment. Datt noted they are finding many interesting opportunities in the current environment. Both the CRE debt and equity portfolios continue to perform to Datt's expectations. |
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Performance Report: Surrey Australian Equities Fund
9 Jul 2020 - Australian Fund Monitors
The Surrey Australian Equities Fund returned +0.4% in June, taking 12-month performance to +4.04% against the ASX200 Accumulation Index's -7.68%. Since inception in June 2018, the Fund has returned +3.12% on an annualised basis.
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9 Jul 2020 - Performance Report: Surrey Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Investment Manager follows a defined investment process which is underpinned by detailed bottom up fundamental analysis, overlayed with sectoral and macroeconomic research. This is combined with an extensive company visitation program where we endeavour to meet with company management and with other stakeholders such as suppliers, customers and industry bodies to improve our information set. Surrey Asset Management defines its investment process as Qualitative, Quantitative and Value Latencies (QQV). In essence, the Investment Manager thoroughly researches an investment's qualitative and quantitative characteristics in an attempt to find value latencies not yet reflected in the share price and then clearly defines a roadmap to realisation of those latencies. Developing this roadmap is a key step in the investment process. By articulating a clear pathway as to how and when an investment can realise what the Investment Manager sees as latent value, defines the investment proposition and lessens the impact of cognitive dissonance. This is undertaken with a philosophical underpinning of fact-based investing, transparency, authenticity and accountability. |
| Manager Comments | The Fund ended the Financial Year with 9% of the portfolio in cash and a diversified portfolio of 28 individual stock positions. The Fund was most heavily weighted towards the IT and Industrials sectors. Top holdings at month-end included Appen (APX), Imrcor (IMR), Omni Bridgeway (OBL), Opticom (OPC), Xero Limited (XRO). Top contributors to performance over the Financial Year included Appen, Xero, Pointsbet and Imricor. Looking forward, Surrey expect the day-to-day share price movements to continue but remain confident in the long-term outlook for the globe as we recover from the impact of COVID-19. As can be seen by the Fund's top shareholdings mentioned above, the Fund is positioned in industries with strong structural growth tailwinds and where Surrey believe the economic exposure to COVID-19 is somewhat limited. |
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Infrastructure Spending Emerging as the Focus
9 Jul 2020 - Karl Hunt, Delft Partners
After the heavy contractions in GDP throughout the world following the COVID pandemic, governments are under a lot of pressure to directly boost GDP. With borrowing costs low, one area that is increasingly in focus is infrastructure where...
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9 Jul 2020 - Infrastructure Spending Emerging as the Focus
By: Karl Hunt, Delft Partners
Performance Report: Bennelong Long Short Equity Fund
8 Jul 2020 - Australian Fund Monitors
The Bennelong Long Short Equity Fund rose +4.19% in June, outperforming the ASX200 Accumulation Index by +1.58% and taking 12-month performance to +30.56% against the Index's -7.68%. Since inception in February 2002, the Fund has returned...
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8 Jul 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 | Bennelong noted elevated volatility and regular sharp mood swings continue to create an environment that is very difficult to navigate. They emphasise that they operate on the basis that fundamentals rule the long-term, while liquidity swings the short-term. Equal top pairs for the month were long TPG / short Telstra and the three-legged pair long JBH / short SUL and MYR. Performance was driven by a very strong share price performance by TPG on consummation of the merger with Vodafone. Bennelong retain a very positive outlook for the new TPG. Long JHX / short CSR was the portfolio's third best pair as JHX upgraded earnings during the month. The Fund had no material negative pairs. |
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Performance Report: Paragon Australian Long Short Fund
7 Jul 2020 - Australian Fund Monitors
The Paragon Australian Long Short Fund rose +5.9% in June, outperforming the ASX200 Accumulation Index by +3.29% and taking annualised performance since inception in March 2013 to +10.27% versus the Index's +6.43%.
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7 Jul 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 Paragon Australian Long Short Fund rose +5.9% in June, outperforming the ASX200 Accumulation Index by +3.29% and taking annualised performance since inception in March 2013 to +10.27% versus the Index's +6.43%. The Fund's down-capture ratio for performance since inception of 68.74% indicates that, on average, the Fund has outperformed during the market's negative months. |
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Performance Report: Delft Partners Global High Conviction
1 Jul 2020 - Australian Fund Monitors
The Delft Global High Conviction Strategy has returned +14.78% with a volatility of +11.84% on an annualised basis since inception in August 2011. Over the same period, AFM's Global Equity Index has risen +13.50% p.a. with an annualised...
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1 Jul 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 +3.26% against the Index's +2.96%. The Strategy's Sharpe and Sortino ratios for performance since inception are 1.05 and 1.87. With respect to the Index's 10 best and worst months since the Strategy's inception, the Strategy outperformed in 6 out of 10 of the Index's worst months and 9 out of 10 of the index's best months. |
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Performance Report: Touchstone Index Unaware Fund
1 Jul 2020 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +4.93% in May, taking annualised performance since inception in April 2016 to +6.09% with an annualised volatility of 16.18%.
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1 Jul 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 | At month-end, the Fund held 21 stocks with a median position size of 4.4%. The portfolio's holdings had an average forward year price/earnings of 20.8, forward-year tangible ROE of 9.8% and forward-year dividend yield of 2.6%. The Fund ended the month with a cash weighting of 10.5%, up from 7.4% at the end of April. |
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Performance Report: Insync Global Quality Equity Fund
30 Jun 2020 - Australian Fund Monitors
The Insync Global Quality Equity Fund rose +7.39% in May, outperforming AFM's Global Equity Index by +5.29% and taking annualised performance since inception in October 2009 to +13.91% versus the Index's +10.70%. The Fund has returned...
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30 Jun 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 | Insync noted they continue to hold companies exposed to Megatrends which they believe will deliver sustainable profitable growth in a post-pandemic environment. Their view is that COVID-19 simply brought forward the demise of many businesses that were already in structural decline. The top three Megatrends in the portfolio by weighting as at the end of May were the 'Age Related Health Solutions' megatrend (15%), the 'Digitisation' megatrend (13%), and the 'Cashless Society' megatrend (10%). The Fund's top 5 holdings at month-end were PayPal, Adobe, JD Sports Fashion, S&P Global and Dominos. |
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