NEWS
Fund Review: Bennelong Long Short Equity Fund July 2018
15 Aug 2018 - 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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15 Aug 2018 - Fund Review: Bennelong Long Short Equity Fund July 2018
By: Australian Fund Monitors
AFM Fund Review - July 2018 (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 15-years' track record and an annualised returns of over 16%.
- The consistent returns across the investment history indicate 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 0.99 and 1.63 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - July 2018 (pdf format)
Performance Report: Insync Global Capital Aware Fund
14 Aug 2018 - Australian Fund Monitors
The Insync Global Capital Aware Fund performed strongly again in June, returning +3.51% (after the cost of protection) and taking the 12-month return to +17.26%.
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14 Aug 2018 - 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 | Performance was driven by positive contributions from Twenty-First Century Fox, Accenture, Monster Beverage Corp, Cognizant Tech Solutions and Google. The main negative contributors in the month were eBay, Estee/Lauder, Booking Holdings and Stryker Corp. The Fund continues to have no foreign currency hedging in place as Insync consider the main risks to the Australian dollar to be on the downside. Insync continues to utilise index put options to buffer sharp deep falls in equity markets. |
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Performance Report: Touchstone Index Unaware Fund
10 Aug 2018 - Australian Fund Monitors
The Touchstone Index Unaware Fund rose +2.92% in June, taking annualised performance since inception in April 2016 to +13.15%.
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10 Aug 2018 - 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 the end of the month the Fund held 21 stocks with an median position size of 4.4%. Overall, the portfolio's holdings had an average price/earnings of 15.7, EPS growth of 15.7%, tangible ROE of 22.5% and dividend yield of 4.8%. The Touchstone Index Unaware Fund primarily selects stocks from the S&P/ASX 300 Index and typically holds 10-30 stocks. It 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: Bennelong Kardinia Absolute Return Fund
7 Aug 2018 - Australian Fund Monitors
The Bennelong Kardinia Absolute Return Fund has returned +6.46% with a volatility of 4.48% over the financial year. Since inception the Fund has returned +10.52% p.a. versus the Index's +5.93%.
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7 Aug 2018 - Performance Report: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. Detailed analysis of company valuations using financial statements and forecasts, particularly focusing on free cash flow, is conducted. Technical analysis is used to validate the Manager's fundamental research and valuations and to manage market timing. A significant portion of the Fund's overall performance can be attributed to the attention and importance given to the macro economic outlook and the ability and willingness to adjust the Fund's market risk. |
| Manager Comments | The Fund fell -0.77% in June, hurt by Bennelong's cautious positioning in response to escalating trade tensions. Positive contributors included Macquarie Group (+34bp contribution), Whitehaven Coal (+29bp), CYBG (+22bp), ANZ (+19bp) and Costa Group (+16bp). A short position in Share Price Index Futures (-152bp contribution) was the biggest detractor for the month given the strong market. The individual short book (-38bp) also detracted from performance, with shorts in energy, consumer and REIT stocks all contributing negatively. Other detractors included long positions in Ausdrill (-50bp), Mineral Resources (-25bp), APA Group (-21bp) and Netwealth (-17bp). Net equity market exposure (including derivatives) was increased late in the month from 12.9% to 40.3% (82.1% long and 41.8% short), with the addition of A2 Milk, ANZ, Magellan, Westpac and Xero, and a reduction in the Fund's short position in Share Price Index Futures contracts as well as some bond proxy and consumer stocks. Bennelong noted this was partly offset by the sale of Ausdrill, Janus Henderson, Kidman Resources and RCR Tomlinson. |
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Performance Report: Bennelong Concentrated Australian Equities Fund
6 Aug 2018 - Australian Fund Monitors
The Bennelong Concentrated Australian Equities Fund rose +1.57% in June, taking performance over the financial year to +29.08% versus the Index's +13.01%.
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6 Aug 2018 - Performance Report: Bennelong Concentrated Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The overriding objective of the Concentrated Australian Equities Fund is to seek investment opportunities which are under-appreciated and have the potential to deliver positive earnings, while satisfying our stringent quality criteria. Bennelong's investment process combines bottom-up fundamental analysis together with proprietary investment tools which are used to build and maintain high quality portfolios that are risk aware. The portfolio typically consists of 20-35 high-conviction stocks from the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to ASX-listed securities. Derivative instruments are mainly used to replicate underlying positions and hedge market and company specific risks. |
| Manager Comments | The Fund returned +13.81% over the quarter, outperforming the Index by +5.34%. The Fund benefited from strong returns from some of its largest holdings; CSL, Reliance Worldwide and Aristocrat Leisure. Bennelong noted these names typify the kind of stocks in which they seek to invest, all are high quality growth companies that proved again this quarter to have better than expected earnings prospects. The Fund is a concentrated portfolio of BAEP's highest conviction stock ideas. It is 'index unaware' and thus able to avoid large benchmark weights if considered appropriate. Over the quarter the Fund's underweight position in the banking sector (less than 1% of the portfolio) contributed to relative performance. |
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Performance Report: 4D Global Infrastructure Fund
3 Aug 2018 - Australian Fund Monitors
The 4D Global Infrastructure Fund rose +2.73% in June, outperforming its benchmark (OECD G7 Inflation Index +5.5%) by +2.11%. The Fund has returned +11.48% p.a. since inception in March 2016.
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3 Aug 2018 - 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 | 4D Infrastructure noted June was a difficult month for the Fund's emerging market exposure, hit by currency concerns on the back of rising US rates as well as geo-political issues around trade wars and elections. However, 4D Infrastructure's opinion is that the fundamentals for these names remain solid. The strongest performer for June was China Resources Gas, up +19.3% as the gas conversion theme continues to develop in China. The weakest performer was Chinese toll road operator Anhui Expressway, down -13.7% which the manager expects was driven by concerns around the trade wars with the USA. Given the global macro environment, 4D Infrastructure remain overweight user pay assets which have a direct correlation to macro strength. However, the Fund maintains core exposure to quality defensive utility assets due to ongoing geo-political concerns. |
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Performance Report: Newgate Absolute Return Fund
31 Jul 2018 - Australian Fund Monitors
The Newgate Absolute Return Fund ended the financial year up +41% versus the Index's +13.01%. Over the June quarter, the Fund returned +8.28%.
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31 Jul 2018 - Performance Report: Newgate Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The investment manager uses an initial screening process to highlight securities within their target investment universe where there are likely to be errors in market expectations and where they could change to impact security prices. A detailed research process is then undertaken and integrated with financial analysis to determine a sustainable yield and fundamental discounted cash flow valuation for each security. The investment manager's analysis of a security will involve a review of potential key drivers such as operational outlook, inflation and interest rate expectations, regulatory environment, tax structuring, position in capital expenditure cycle and capital structure. The goal is to understand how a company is positioned in terms of its growth and risk profile. The Fund does not undertake a long range forecasting or attempt to arrive at a precise conclusion about a company's long term valuation. Instead, the investment team seeks to understand the fundamental agents of change impacting a company and its environment and use this to determine how they will impact a company's economics and market perception of value. The Fund intends to use leverage to enhance returns to investors and has a policy of limiting leverage to 50%. The Fund may make use of derivatives, mainly to reduce risk or gain exposure to other types of investments. |
| Manager Comments | The Newgate Absolute Return Fund ended the financial year up +41.00% versus the Index's +13.01%. The Fund has returned +22.38% per annum since inception in August 2016, outperforming the Index by +11.78% on an annualised basis. The Fund's Sharpe and Sortino ratios for performance since inception, 1.68 and 4.15 respectively, highlight the Fund's ability to achieve superior risk-adjusted returns whilst ensuring investors' capital is protected. In addition, the Fund's cumulative down-capture ratio since inception emphasises the Fund's ability to perform well in falling markets. |
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Performance Report: Bennelong Australian Equities Fund
31 Jul 2018 - Australian Fund Monitors
The Bennelong Australian Equities Fund rose +3.29% in June, taking performance over FY18 to +26.31% versus the ASX200 Accumulation Index's return of +13.01% over the same period.
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31 Jul 2018 - Performance Report: Bennelong Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Bennelong Australian Equities Fund seeks quality investment opportunities which are under-appreciated and have the potential to deliver positive earnings. The investment process combines bottom-up fundamental analysis with proprietary investment tools that are used to build and maintain high quality portfolios that are risk aware. The investment team manages an extensive company/industry contact program which helps identify and verify various investment opportunities. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Index. The Fund may invest in securities listed on other exchanges where such securities relate to the ASX-listed securities. The Fund typically holds between 25-60 stocks with a maximum net targeted position of an individual stock of 6%. |
| Manager Comments | Over the quarter the Fund returned +14.96%, with performance benefiting from strong returns from a number of the Fund's holdings. These included CSL, Reliance Worldwide and Aristocrat Leisure. Bennelong noted these companies typify the kind of stocks in which the Fund seeks to invest; all are high quality growth companies that proved again this quarter to have better than expected earnings prospects. Bennelong also highlight the significance of the Fund's high conviction strategy in allowing them to be underweight, and thus avoid, the underperformance of the banking sector which makes up approximately 23% of the total value of the market. |
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Performance Report: ARCO Absolute Trust
30 Jul 2018 - Australian Fund Monitors
The ARCO Absolute Return Trust returned +6.54% over the financial year with a volatility of 4.06%. ARCO noted they are pleased to record the Trust's 10th consecutive positive yearly return for its investors.
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30 Jul 2018 - Performance Report: ARCO Absolute Trust
By: Australian Fund Monitors
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| Fund Overview | The Fund's bias is likely to be net long under normal market conditions, with the core strategy being to construct a portfolio of listed equity securities priced at levels that do not adequately reflect their underlying value. The Fund will seek to boost returns and limit potential market downside by selective short selling of individual stocks which are priced at levels that are viewed as materially above their underlying value. The Fund will also use certain trading strategies both within its core portfolio (through rebalancing stock weights and overall market exposure in response to price movements) and in certain other situations (typically of a shorter-duration and/or opportunistic nature) with the objective of further increasing returns. *Formerly the Optimal Australia Absolute Trust |
| Manager Comments | For the 2018 fiscal year, the Trust's long portfolio comfortably outperformed the ASX200 Accumulation Index. ARCO noted the short portfolio was, perhaps predictably, a drag on returns in a market up 13% for the year - although doing its job to hedge market exposure and the volatility of investor returns. The Fund's return for June was -0.67%. During the month, long positions in Caltex, Link, Computershare, Fairfax and BHP contributed positively. The short portfolio broadly detracted from performance, primarily via ARCO's bank and healthcare exposure. The Trust's Index Futures ('insurance') position was also a drag on performance. |
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Performance Report: Bennelong Twenty20 Australian Equities Fund
27 Jul 2018 - Australian Fund Monitors
The Bennelong Twenty20 Australian Equities Fund rose +3.12% in June, taking annualised performance since inception in December 2015 to +11.07%.
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27 Jul 2018 - Performance Report: Bennelong Twenty20 Australian Equities Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is managed as one portfolio but comprises and combines two separately managed exposures: 1. An investment in the top 20 stocks of the markets, which the Fund achieves by taking an indexed position in the S&P/ASX 20 Index; and 2. An investment in the stocks beyond the S&P/ASX 20 Index. This exposure is managed on an active basis using a fundamental core approach. The Fund may also invest in securities expected to be listed on the ASX, securities listed or expected to be listed on other exchanges where such securities relate to ASX-listed securities.Derivative instruments may be used to replicate underlying positions and hedge market and company specific risks. The companies within the portfolio are primarily selected from, but not limited to, the S&P/ASX 300 Accumulation Index. The Fund typically holds between 40-55 stocks and thus is considered to be highly concentrated. This means that investors should expect to see high short-term volatility. The Fund seeks to achieve growth over the long-term, therefore the minimum suggested investment timeframe is 5 years. |
| Manager Comments | In their quarterly report, Bennelong noted the following: they see relatively attractive valuations in equities, improving investor sentiment and markets, and the potential for a market correction. Bennelong believe that, with big-picture macro risks abound, including rate rises, trade wars, Chinese financial instabilities and excessive Australian consumer leverage, the stock market will ultimately manage its way through these issues. Bennelong point out that corrections are inevitable, however, the risk is being underinvested over the long term rather than the occasional correction. |
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