NEWS
Performance Report: Spectrum Strategic Income Fund
5 Dec 2019 - Australian Fund Monitors
The Spectrum Strategic Income Fund returned -0.07% in October. The Fund has returned +4.70% over the past 12 months and +7.85% p.a. since inception in June 2009 with an annualised volatility of 3%.
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5 Dec 2019 - Performance Report: Spectrum Strategic Income Fund
By: Australian Fund Monitors
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| Manager Comments | The portfolio remains well diversified with a broad spread of securities by legal structure. Bank T2 capital remains at 25% of the portfolio, while senior unsecured comprises 29% and senior secured represents 11%. The Fund holds 10% in ASX listed securities. Over the month hybrid securities recorded their first negative month since February 2019 which had an adverse effect on performance. The portfolio is positioned to take advantage of movements in spreads or rates. With 11.6% in cash, the Fund can take advantage of any credit spread weakness. Spectrum noted that over time the cash balance will be reinvested. The portfolio continues to maintain an average credit rating of A-. |
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Performance Report: Insync Global Quality Equity Fund
4 Dec 2019 - Australian Fund Monitors
The Insync Global Quality Equity Fund has risen +23.01% over the past 12 months, outperforming AFM's Global Equity Index by +8.42%. Since inception in October 2009, the Fund has returned +13.51% p.a. versus the Index's +11.39%.
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4 Dec 2019 - 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 | The Fund returned -0.33% in October after fees. Positive contributors included Apple, Bristol-Myer Squibb, Facebook, Rightmove PLC and Nvidia Corp. Detractors included Heineken, Estee Lauder, Constellation Brands, Accenture and Intuit. The Fund continues to have no currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Insync noted there continued to be a shift from quality growth companies towards cyclical companies during the month, led by optimism around some form of partial trade deal. Whilst central banks globally now have an accommodative monetary policy, Insync continue to hold the view that the global economic backdrop remains challenging, with low growth and low inflation a major headwind for businesses that are reliant on a strong economy to drive their earnings. They believe the current environment continues to favour secular growth businesses with high levels of profitability. |
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Performance Report: Bennelong Emerging Companies Fund
4 Dec 2019 - Australian Fund Monitors
The Bennelong Emerging Companies Fund rose +2.61% in October, outperforming the ASX200 Accumulation Index by +2.96% and taking 12-month performance to +65.51% versus the Index's +19.29%.
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4 Dec 2019 - Performance Report: Bennelong Emerging Companies Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund may invest in securities expected to be listed on the ASX within 12 months. The Fund may also invest in securities listed, or expected to be listed, on other exchanged where such securities relate to ASX-listed securities |
| Manager Comments | Bennelong noted that, whilst performance has been reasonably strong, they continue to find very attractive opportunities among emerging companies that they believe should position the Fund for decent future returns over time. The Fund's top holdings as at the end of October included Viva Leisure, BWX and Mader. |
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Performance Report: Touchstone Index Unaware Fund
3 Dec 2019 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +1.25% in October, outperforming the ASX200 Accumulation Index by +1.6% and taking 12-month performance to +17.46% with a volatility of +8.24%.
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3 Dec 2019 - 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 October, the Fund held 20 stocks with a median position size of 4.6%. The portfolio's holdings had an average forward year price/earnings of 16.6, forward year EPS growth of 5.0%, forward year tangible ROE of 22.8% and forward year dividend yield of 4.1%. The Fund's cash weighting was left unchanged at 5.3%. The Fund primarily seeks to select stocks from the ASX300 Index, typically holding between 10-30 stocks. The Fund seeks to invest in reasonably priced, good quality companies with a significant share of expected returns coming from sustainable dividends. |
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Performance Report: NWQ Fiduciary Fund
3 Dec 2019 - Australian Fund Monitors
The NWQ Fiduciary Fund rose +0.56% in October, outperforming the ASX200 Accumulation Index by +0.91%. Since inception in May 2013, the Fund has returned +5.54% p.a. with an annualised volatility of 4.82%.
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3 Dec 2019 - Performance Report: NWQ Fiduciary Fund
By: Australian Fund Monitors
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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 | NWQ believe the fact that market indices have risen strongly this year against a backdrop of weakening fundamentals presents the Fund's managers with a rich opportunity set on both the long and short side of their portfolios. They noted there are opportunities in the form of growth companies with fundamental support on the long side and companies that are being propped up by low rates and excess liquidity on the short side. There was a high degree of dispersion in the returns of the underlying managers in October and NWQ believe the Fund's positive return demonstrated the benefits of having a diversified portfolio of managers. The Fund's Alpha managers contributed positively to overall performance in October (+0.85%) while the Beta managers made a small negative contribution (-0.21%). |
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Performance Report: Glenmore Australian Equities Fund
2 Dec 2019 - Australian Fund Monitors
The Glenmore Australian Equities Fund has risen +37.45% over the past 12 month against the ASX200 Accumulation Index's +19.29%. Since inception in June 2017, the Fund has returned +29.93% p.a. versus the Index's +11.05%.
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2 Dec 2019 - Performance Report: Glenmore Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | The Fund returned -1.07% in October. Top contributors included Opticomm and Alliance Aviation Services. Key detractors included Stanmore Coal and Phoslock Environmental Technologies. Glenmore continue to have a positive outlook on each of the Fund's holdings. Glenmore noted valuations on the ASX remain elevated, however, they are continuing to find undervalued stocks that fit their criteria in terms of business quality and earnings growth. |
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Performance Report: Quay Global Real Estate Fund
2 Dec 2019 - Australian Fund Monitors
The Quay Global Real Estate Fund rose +0.8% in October, taking 12-month performance to +23.88% and annualised performance since inception in January 2016 to +11.69%.
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2 Dec 2019 - Performance Report: Quay Global Real Estate Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | Third quarter results and updates from many of the Fund's investees had meaningful impact on monthly returns. Top contributors included Brixmor (US Retail) and Safestore (UK Storage). Two of the biggest detractors in the month, Cubesmart (US Storage) and Ventas (US Healthcare), delivered results that failed to meet expectations. Both Cubesmart and Ventas were negatively impacted by near-term elevated supply. In both cases, Quay noted they continue to look beyond the near-term volatility of quarterly earnings and focus on the long-term fundamentals. Closer to home, Quay's view is that the expectation of a 'lower for longer' interest rate environment is now well entrenched. They believe Quantitative Easing (QE) may be coming to Australia but will likely do little to revive the economy without meaningful fiscal support. |
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Performance Report: Insync Global Capital Aware Fund
29 Nov 2019 - Australian Fund Monitors
The Insync Global Capital Aware Fund has risen +22.05% after fees and protection over the past 12 months against AFM's Global Equity Index's +15.59%. Since inception in October 2009, the Fund has returned +10.99% p.a. with an annualised...
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29 Nov 2019 - Performance Report: Insync Global Capital Aware 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 of typically 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. At times, Insync may consider holding higher levels of cash if valuations are full and it is difficult to find attractive investment opportunities. When Insync believes markets to be overvalued, it may hold part of its resources in cash, or use derivatives as a way of reducing its equity exposure. Insync may use options, futures and other derivatives to reduce risk or gain exposure to underlying physical investments. The Fund may purchase put options on market indices or specific stocks to hedge against losses caused by declines in the prices of stocks in its portfolio. |
| Manager Comments | The Fund returned -0.89% after fees and downside protection in October. Positive contributors included Apple, Bristol-Myer Squibb, Facebook, Rightmove PLC and Nvidia Corp. Detractors were Heineken, Estee Lauder, Constellation Brands, Accenture and Intuit. The Fund continues to have no currency hedging as Insync consider to main risks to the Australian dollar to be on the downside. Insync noted there continued to be a shift from quality growth companies to wards cyclical companies during the month, led by optimism around some form of partial trade deal. Whilst central banks globally now have an accommodative monetary policy, Insync continue to hold the view that the global economic backdrop remains challenging, with low growth and low inflation a major headwind for businesses that are reliant on a strong economy to drive their earnings. They believe the current environment continues to favour secular growth businesses with high levels of profitability. |
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Performance Report: Surrey Australian Equities Fund
29 Nov 2019 - Australian Fund Monitors
The Surrey Australian Equities Fund returned -1.69% after fees in October, taking performance CYTD to +19.42%. The portfolio ended the period with 37 individual stock holdings and a cash balance of 6%.
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29 Nov 2019 - 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 Surrey Australian Equities Fund returned -1.69% after fees in October, taking performance CYTD to +19.42%. The portfolio ended the period with 37 individual stock holdings and a cash balance of 6%. The Fund's top holdings included Cooper Energy Ltd (COE), IMF Group (IMF), Jumbo Interactive (JIN), Smart Group (SIQ) and Xero Limited (XRO). The majority of the Fund's holdings have a market capitalisation of less than $1bn, with the Industrials and IT sectors carrying the greatest weighting. Surrey Asset Management noted that, overall, they remain pleased with the operational performance of the companies within their portfolio. Some exceptions include Costa Group (CGC) and IMF Bentham (IMF). The Manager has reduced the Fund's exposure to Costa Group and noted they don't believe the current IMF share price represents its true long-term value. While IMF and CGC negatively impacted the Fund's performance, Surrey Asset Management remain comfortable with both positions at current levels. They discuss both in detail in their latest monthly report while also highlighting the franking credits they received by retaining the Fund's holding in GBST (GBT) into its final takeover. |
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Performance Report: Paragon Australian Long Short Fund
29 Nov 2019 - Australian Fund Monitors
The Paragon Australian Long Short Fund has returned +10.08% p.a. since inception in March 2013, outperforming the ASX200 Accumulation Index by +1.37% on an annualised basis.
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29 Nov 2019 - 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 has returned +10.08% p.a. since inception in March 2013, outperforming the ASX200 Accumulation Index by +1.37% on an annualised basis. The Fund's capacity to significantly outperform in falling markets is highlighted by its down-capture ratio for performance since inception of 42.2%. The Fund returned -1.6% after fees in October, in line with all Australian indices. Paragon noted October was a challenging month as they saw a continuing rotation of value to growth stocks. Positive contributors included Alacer Gold, Xero and PointsBet. These were offset by declines in Jumbo, Prospa and the Fund's other gold holdings. Adriatic and PointsBet both conducted successful capital raisings to fund growth initiatives. Xero delivered another solid interim result and Alacer released another excellent quarterly result, both continuing to break multi-year highs, and remain key long positions for the Fund. Paragon discuss their views on Xero and Alacer in more depth in their latest report. |
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