NEWS
19 Oct 2021 - Staying relevant in a fast-changing world
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Staying relevant in a fast-changing world Aoris Investment Management October 2021 Consumers have never been more fickle, in a world of fast fashion and next-day delivery. Covid has further upended our purchasing behaviours and expectations. Against the odds, luxury goods giant LVMH has become more desirable over many centuries, and emerged from this disruptive period stronger than ever. What's their secret? LVMH (Louis Vuitton Moët Hennessy) is the largest global luxury goods company, owning 75 iconic brands such as those in its name as well as Christian Dior, Sephora, Bulgari and Tiffany. It has a long history of growth and profitability, even through difficult market environments - in fact it has not made a loss in a single year of its existence. Let me share with you five features of this business that have allowed it to prosper in the face of ever-changing consumer preferences. 1. Heritage The Clos des Lambrays vineyard dates back to 1365. Chaumet was founded in 1780 as a jeweller for the French Empress. Louis Vuitton was born 200 years ago and founded his business to make suitcases, featuring the classic monogrammed logo design, for the French royal family. LVMH's brands are steeped in history and tradition. There is a story behind their products, they stand for something. The depth and authenticity of their heritage cannot be replicated by younger luxury goods brands. This heritage and desirability only builds over time, making it even more difficult for new entrants to succeed. 2. Innovation But they aren't just old, tired brands. LVMH has done a great job of straddling tradition with innovation, remaining contemporary and relevant with consumers. It invests over €20 billion each year into creating new products (which represent about a quarter of its sales in a given year), advertising its brands through engaging campaigns, and refurbishing its stores with vibrant and constantly evolving displays. LVMH also has an ongoing annual intake of thousands of new apprentices and talented young designers that bring with them new ideas. Half of LVMH's employees are under the age of 34, which is remarkable for such a longstanding business. 3. Agility There are 75 brands owned by LVMH which operate as largely independent businesses, keeping them agile and entrepreneurial. The company's response to the Covid pandemic was a great validation of this strength. Consumer behaviour changed drastically, with retail stores shut and travel grinding to a halt (which is when a large portion of luxury sales are traditionally made). LVMH adapted more rapidly than its competitors, resulting in massive market share gains and a quick recovery in profits. Its brands continued to invest in new product launches, virtual fashion shows and marketing, unlike others which withdrew their investments. They also found novel ways to serve a local clientele, such as these incredible mobile stores which brought a caravan with a bespoke selection of products directly to the homes of their most valued clients. 4. Control LVMH makes most of its products in-house and sells most of its products through directly operated stores, giving it full reign over the quality of its products, how they're priced (Louis Vuitton is notoriously the only luxury brand that never discounts its products), and the customer experience. Contrast the look and feel of a Louis Vuitton store and the attentive customer service you'd receive in one, to the unorganised mess of a department store. The company is obsessed with product quality, taking the long-term view that if you can focus on satisfying your customers, the financial outcomes will naturally be favourable. It has a high degree of control over its supply chain and materials usage, e.g. recently acquiring a sustainable crocodile leather tannery in Singapore to ensure its supply of a scarce resource, which is proving valuable amid the current global disruptions. 5. Breadth LVMH sells a lot more than Fashion and Leather Goods; it also has businesses across Wines & Spirits (where it is the largest global producer of champagne and cognac), Perfumes & Cosmetics, Watches & Jewellery (where it recently acquired Tiffany) and Retailing (where it owns Sephora). Its breadth across these five divisions, 75 brands and many countries provides valuable balance and resiliency to the inevitable ups and downs in any one area of consumer spending. LVMH's breadth is important when considering the Chinese government's increasingly intrusive stance on the behaviour of its citizens. China has certainly been an important contributor to LVMH's growth, and today Chinese consumers represent a third of its sales across a very broad range of goods. However LVMH is a truly global business that is growing strongly in other geographies as well. The company reported exceptional results in the first half of 2021, where sales grew faster from its US and European customers than in China. LVMH shares have fallen by 10% over the last month, and some of its luxury peers have fared worse, but the market's focus on these events may be masking the business' finer qualities. In conclusion These five attributes have contributed to LVMH's growing desirability, long track record of growth, and enviable profitability. In the Aoris International Fund we own a portfolio of 15 durable, all-weather businesses like LVMH, which we expect to keep compounding in value for many years to come. Funds operated by this manager: |
18 Oct 2021 - Performance Report: Equitable Investors Dragonfly Fund
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| Fund Overview | The Fund is an open ended, unlisted unit trust investing predominantly in ASX listed companies. Hybrid, debt & unlisted investments are also considered. The Fund is focused on investing in growing or strategic businesses and generating returns that, to the extent possible, are less dependent on the direction of the broader sharemarket. The Fund may at times change its cash weighting or utilise exchange traded products to manage market risk. Investments will primarily be made in micro-to-mid cap companies listed on the ASX. Larger listed businesses will also be considered for investment but are not expected to meet the manager's investment criteria as regularly as smaller peers. |
| Manager Comments | Equitable Investors noted more volatility early in October is reflective to them of a shift in sentiment rather than in the economic environment. It isn't news that inflation has risen and some attempts to tighten monetary policy will be made. It isn't news that COVID-19 is continuing to be disruptive to global trade and local economies. Nor is it news that mega-cap tech stocks are on extreme valuation metrics. They believe sentiment may continue to oscillate in this far-from-perfect world but they remain focused on investing in businesses striving to create and demonstrate value. |
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18 Oct 2021 - Performance Report: Bennelong Long Short Equity Fund
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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 fund's Sortino ratio (which excludes volatility in positive months) has ranged from a high of 0.73 for performance over the most recent 24 months to a low of -0.99 over the latest 12 months, and is 1.32 for performance since inception. By contrast, the ASX 200 Total Return Index's Sortino for performance since February 2002 is 0.48. Since inception in February 2002 in the months where the market was negative, the fund has provided positive returns 63% of the time, contributing to a down-capture ratio for returns since inception of -141.19%. Over all other periods, the fund's down-capture ratio has ranged from a high of 415.24% over the most recent 12 months to a low of 12.52% over the latest 24 months. A down-capture ratio less than 100% indicates that, on average, the fund has outperformed in the market's negative months over the specified period. |
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18 Oct 2021 - Ransomware is so rife it's a threat to national security
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Ransomware is so rife it's a threat to national security Michael Collins, Magellan Asset Management October 2021 |
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One weekend in May, an email appeared from Instagram congratulating the business for getting a 'blue tick', which bestows on the account 'authentic presence'. Vernon, thrilled, clicked the link in the email and logged in. Not long after, Instagram told Vernon the account's email and username had changed. A message soon appeared: "We have seized control of your Instagram account ...We require US$1,000 to grant you your account back." Vernon eventually paid US$750 in bitcoin to Russians, who released the account. But get this. Three days later, Vernon got an Instagram message from a bakery in Australia that had been hacked by the same group. The baker had been told to contact Vernon for a Tripadvisor-style testimonial that the hackers were trustworthy, so to speak, in that they would release the kidnapped device when paid. Such traumas are proliferating because the malware-based crime known as ransomware is reaching menacing proportions. Criminally installed encryption that is reversed only by ransom is rising "almost exponentially" in the words of FBI Director Christopher Wray because the virtual private networks that enable working from home have made business systems more vulnerable.[2] US cyber-security firm Mimecast found that 61% of the 1,225 global IT firms it surveyed suffered ransomware attacks in 2020, a 20-point jump from 2019.[3] The Australian Cyber Security Centre, a government agency, said ransomware attacks in Australia rose 15% last financial year to 500 incidents.[4] Global security group, Institute for Security and Technology, estimates 2,400 ransomware victims in the US paid nearly US$350 million in ransom in 2020, a 311% jump in payments from 2019. Ransomware "is an urgent national security risk" because "attacks on the energy grid, on a nuclear plant, waste-treatment facilities ... could have devastating consequences," the institute cautioned.[5] As such warnings signal, ransomware has evolved from a cottage industry into something resembling a "criminal franchising arrangement", according to the Australian Cyber Security Centre.[6] At its most elaborate, the crime starts with hackers who penetrate a network. They then sell these 'keys' to scammers who contact ransomware-as-a-service groups that peddle malware for a percentage of the plunder. The attackers infiltrate systems to make them inoperable, lock out owners and steal data. They demand a ransom to release devices and sometimes threaten to leak stolen data, the virtual world's equivalent to shooting one of the hostages, especially if victims contact law-enforcement authorities.[7] Ransom paid, the victims are sent a 'decrypter key' to unlock their systems that often never operate as well as before, or never work again. Crypto launderers are on hand to hide the criminal origins of ransom payments. Governments hostile to the west protect these thieves who give themselves names such as DarkSide and REvil, shortened from Ransomware-Evil. Nothing seems safe from virtual kidnappers. Businesses, charities, essential services, governments, hospitals, the military, the police, schools and software providers have suffered what is a paralysing blow to operations. Ireland's health system has been targeted; so too Italy's vaccination booking system and the US Coast Guard. When pursuing healthcare facilities - and 560 in the US were targeted in 2020[8] - the scammers don't seem to care if people die when equipment and surgeries stop. Last October, for example, the University of Vermont Medical Center couldn't treat some chemotherapy patients after a ransomware attack destroyed their records.[9] Among notable attacks this year, in March, US insurer CNA Financial reportedly paid a then-record US$40 million ransom.[10] In May, ransomware disrupted Colonial Pipeline, which carries 45% of US east coast fuel supplies, for 11 days until a US$$4.3 million ransom was paid for a malfunctioning decrypter key. In July, a ransomware attack on the US-based software company Kaseya was notable for gifting up to 1,500 global victims to the criminals and that the ransom demand was a record US$70 million.[11] The biggest ransomware attack in terms of victims is still the 'WannaCry' one in 2017, when up to 300,000 computers were infected though the criminals received limited payment.[12] Ransomware is flourishing because the risk-reward calculation favours the attackers. Even if paying ransoms risks reputational damage, what choice do companies have but to pay a government-protected group that might destroy their mission-critical computer system? Paying the ransom, however, often fails as a solution. The Mimecast survey found that 52% of ransomware victims paid the ransom but only 66% of those recovered their data - the others were double-crossed.[13] To reduce the reward part of the criminal equation, the Australian Cyber Security Centre[14] and the FBI[15] discourage ransom payments. Some people oppose the concept of ransomware insurance (offered by companies now swamped with claims).[16] US sanctions outlaw ransom payments to blacklisted groups such as Russia's cybercriminal Evil Corp.[17] This has prompted some to call for all ransom payments to be illegal. But acceding to the demands of non-virtual crooks is legal and often wise. The hope is that the risk part of the calculation might increase to the detriment of the scammers because western governments are enhancing and coordinating efforts to stop ransom attacks. Among steps, the White House in May issued an executive order to encourage government and private-sector cooperation on cybersecurity.[18] In July, the US government released a national security memorandum to protect infrastructure from cyberattack.[19] In August, US President Joe Biden hosted Big Tech CEOs and others to tell them to prioritise cyberdefence. Officials are warning internet users to be better prepared for these attacks. Back up data. Hang onto old hardware in case systems need rebuilding. Use strong passwords and multifactor authentication. Have response plans. Use encryption. Install anti-malware defences. Patch vulnerabilities. Segment networks. Hire skilled security teams and train staff to detect phishing.[20] Governments are acting because they concede national security is under threat. Proof of this is that in April Biden met Russian President Vladimir Putin and reportedly told his counterpart to rein in ransom criminals and listed the industries that were off limits.[21] Eradicating the threat seems far off. Computer systems are impossible to secure and it's expensive to try. Phishing emails and other scams too easily trick people into installing malware. Enough employees are willing to sell passwords on the 'dark web'. Perhaps, though, the greatest asset ransomware criminals have is that cryptocurrencies are hard to trace. Many advise that a government crackdown on cryptos is the best way to reduce the menace. The US's unprecedented move in September to blacklist a Russian-owned crypto exchange shows Washington might agree.[22] Something needs to tackle this mobster shakeout for using the web before the damage reaches national-security proportions. Even if defensive efforts increase, ransomware appears unbeatable when five billion people are connected to the internet. As ransomware is online, the public seems to be unable to come to terms with the magnitude of the threat, which hampers the fightback. It's too true that ransomware would exist even if cryptos didn't. But it might barely register as a danger because how would the criminal be paid? Some victims refuse to pay and the criminals back down. Apple in May declined to pay a US$50 million ransom, as did Dublin when Ireland's health system was stricken. But for some of these non-payers, the recovery costs and wider damage exceeded the ransom. The 'WannaCry' attack emanating from North Korea generated little ransom for the attackers but according to the world's anti-laundering body caused an estimated US$8 billion in damages to hospitals, banks and businesses across the world.[23] Such calculations show that the ransomware threat needs to be taken much more seriously. The non-virtual world provides the clue to defeating the menace. Kidnapping is a rare crime nowadays because the police caught kidnappers when they spent the cash. The solution to ransomware might be to regulate cryptocurrencies, possibly - as is the intention of China's ban on crypto activities - to the point where they are unviable. Criminal tool On September 7, El Salvador became the first country in the world to accept bitcoin as legal tender (along with the US dollar). Allowing people to shop for everyday items and pay taxes with the cryptocurrency marketed under the local name for cool (Chivo) was beset with teething problems, especially given that most Salvadorans don't have internet access. The government-run bitcoin e-wallet went offline for hours and didn't appear on major app stores. Many people were unable to sign up as users. Others demonstrated against bitcoin's use. The value of bitcoin dived more than 10% on the day, where a shift in bitcoin's value is a liability for the government.[24] While most of the start-up hitches will be overcome, the experiment could fail for many reasons including that most locals seem against the idea. One looming problem for El Salvador if bitcoin use were to become extensive is the Financial Action Task Force, an intergovernmental body created to combat money laundering, might blacklist the country, which would be a blow to its financial sector. The task force is concerned about bitcoin because its design makes it hard for operators to comply with global 'know your customer' rules imposed to combat the money laundering that enables terrorism and cybercrimes such as ransomware. These know-your-customer rules mean financial intermediaries must know the true name of their users, monitor their transactions and report suspicious activities to authorities. Even with these rules, the UN estimates that US$2 trillion is laundered each year.[25] Cryptos are making it easier to launder money. It's no coincidence that ransomware has boomed as cryptocurrencies soared in popularity. The borderless, decentralised and anonymous nature of bitcoin transactions means no trusted third party such as a central bank, bank or payments company is involved; 'decentralised finance', or 'DeFi', does away with these third parties and DeFi players boast how they do not care who their customers are.[26] Such attitudes have allowed ransomware criminals who demand payment in bitcoin to designated wallets to develop techniques that cloud the source of their funds. The 'chainhopping' technique entails exchanging the bitcoin loot for other cryptos via any number of crypto exchanges. 'Tumbler' or 'mixing' services blend legitimate and ill-gotten cryptocurrencies before redistributing them. Further obscurity can be gained by using 'money-mule' service providers who set up accounts with false or stolen credentials. Some ransomware criminals demand ransoms be paid in 'privacy coins' - cryptos such as Dash, Monero and Zeash that make payments untraceable.[27] One technique is to use 'ring signatures' where so many parties sign a transaction no one knows which party initiated it.[28] To be sure, in some ways, the blockchain makes it easier to track cryptos than it is to trace physical cash. But there are too many ways it doesn't. In a victory against ransomware criminals, the US government tracked and retrieved much of the bitcoin ransom paid to the DarkSide ransomware group behind the heist of Colonial Pipeline.[29] Such successes for law enforcement officials, however, will likely only make ransomware criminals refine how they hide their spoils. Western governments do have options if they want to change the risk-reward equation against ransomware scammers. A first step would be to widen know-your-customer and anti-money-laundering laws to include crypto exchanges. The next move would be to sanction crypto exchanges that fail to meet standards - as the US Department of the Treasury did in September when it banned US citizens and companies from transacting with the Russian-controlled SUEX OTC digital currency exchange. The next step for authorities would be to deny foreign banks and crypto exchanges access to the global US-dollar-based banking system unless they show they are equipped and willing to expose digital ransoms. This is a potent threat because much crypto is exchanged for cash. If these steps fail, western governments could even become aggressive online to disrupt ransomware groups. Officials could hack the servers enabling cryptocurrencies such that they can't function. (Private companies cannot legally hack back at criminals.) Another option for western governments is to pressure the countries that house cybercriminals.[30] They could follow China's lead: Beijing in September listed money laundering as one of the many reasons it expanded its crackdown on cryptos by declaring all activities related to digital coins are "illegal".[31] Such actions might mean the world loses the (disputed) benefits of cryptocurrencies. But that's part of the cost-benefit analysis governments need to undertake to defeat the scammers that hound legitimate users of the internet, be they UK gallery owners or bakers in Australia. Funds operated by this manager: Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged), MFG Core Infrastructure Fund[1] Tobias Vernon. 'Phishing trip.' 7 August 2021. The Spectator. spectator.co.uk/article/i-was-held-to-ransom-by-hackers [2] Axios. 'FBI director says cyber threat is increasing 'almost exponentially' 10 June 2021. https://www.axios.com/fbi-director-warns-cybersecurity-6678e54c-560d-4f41-b556-9c95c1fd78e4.html [3] Mimecast report. '61% of organisations were infected with ransomware in 2020.' 20 April 2021. mimecast.com/resources/press-releases/dates/2021/4/the-state-of-email-security-report/ [4] The Australian Cyber Security Centre. 'ACSC annual cyber threat report'. 1 July 2020 to 30 June 2021. Page 30 of pdf version. cyber.gov.au/acsc/view-all-content/publications/acsc-annual-cyber-threat-report-2020-21 [5] Institute for Security and Technology. RTF report: Combatting ransomware. securityandtechnology.org/ransomwaretaskforce/report/. Dollar amounts on page 7 of the report. [6] The Australian Cyber Security Centre. Op cit. Page 31 [7] NBC News. 'the battle between the US and ransomware hackers is escalating.' 22 September 2021. nbcnews.com/tech/security/battle-us-ransomware-hackers-escalating-rcna2129 [8] Institute for Security and Technology. Op cit. [9] 'Patients of a Vermont hospital are left 'in the dark' after a cyberattack.' The New York Times. 26 November 2020. nytimes.com/2020/11/26/us/hospital-cyber-attack.html [10] Bloomberg News. 'CNA Financial paid $40 million in ransom after March cyberattack.' 21 May 2021. bloomberg.com/news/articles/2021-05-20/cna-financial-paid-40-million-in-ransom-after-march-cyberattack [11] Reuters. 'Up to 1,000 businesses affected by ransomware attack, US firm's CEO says.' 6 July 2021. Schools in New Zealand were closed and tills at Sweden's Coop grocery chain stopped working. reuters.com/technology/hackers-demand-70-million-liberate-data-held-by-companies-hit-mass-cyberattack-2021-07-05/ [12] BeforeCrypt, ransomware experts. 'The biggest ransomware attacks ever: Top 10 biggest ransomware payments.' 19 June 2021. beforecrypt.com/en/biggest-ransomware-attacks-ever/ [13] Mimecast. Op cit. [14] The Australian Cyber Security Centre. Op cit. Page 31. [15] 'The FBI does not support paying a ransom.' See FBI website. Scams and safety. 'Ransomware'. Undated. fbi.gov/scams-and-safety/common-scams-and-crimes/ransomware [16] See 'Surge in hacking claims forces ransomware insurers to weigh risks.' 6 June 2021. The Telegraph. telegraph.co.uk/business/2021/06/06/time-stop-paying-ransoms-get-hackers-companies-backs/ [17] US Department of the Treasury. 'Treasury sanctions Evil Corp, the Russia-based cybercriminal group behind Dridex malware.' 5 December 2019. home.treasury.gov/news/press-releases/sm845# [18] The White House. Executive order on improving the nation's cybersecurity.' 12 May 2021. whitehouse.gov/briefing-room/presidential-actions/2021/05/12/executive-order-on-improving-the-nations-cybersecurity/ [19] The White House. 'National Security memorandum on improving cybersecurity for critical infrastructure control systems.' 28 July 2021. whitehouse.gov/briefing-room/statements-releases/2021/07/28/national-security-memorandum-on-improving-cybersecurity-for-critical-infrastructure-control-systems/ [20] US government. Cybersecurity & Infrastructure Security Agency. 'Ransomware guide.' September 2020. https://www.cisa.gov/sites/default/files/publications/CISA_MS-ISAC_Ransomware%20Guide_S508C.pdf [21] The White House. 'Readout of President Joseph R. Biden, Jr. call with President Vladimir Putin of Russia.' 13 April 2021. whitehouse.gov/briefing-room/statements-releases/2021/04/13/readout-of-president-joseph-r-biden-jr-call-with-president-vladimir-putin-of-russia-4-13/ [22] US Department of the Treasury. 'Treasury takes robust actions to counter ransomware.' Media release. 21 September 2021. home.treasury.gov/news/press-releases/jy0364 [23] Financial Action Task Force website. 'Virtual assets.' gafi.org/publications/virtualassets/documents/virtual-assets.html [24] See WIRED. 'El Salvador's bitcoin gamble is off to a rocky start.' 7 September 2021. wired.com/story/el-salvador-bitcoin-rocky-start/ [25] UN. Office on Drugs and Crime. 'Money laundering.' unodc.org/unodc/en/money-laundering/overview.html [26] See 'Cryptocurrency: Rise of decentralised finance sparks 'dirty money' fears.' 15 September 2021. ft.com/content/beeb2f8c-99ec-494b-aa76-a7be0bf9dae6 [27] Institute for Security and Technology. Op cit. Page 14. [28] See Vinc Breaker. 'Identity hiding ring signatures zero knowledge proof.' 27 March 2020. vincbreaker.me/2020/03/27/IHRSZKP/ [29] Bloomberg News. 'Colonial Hackers Broke the Fundamental Bitcoin Rule.' 8 June 2021. bloomberg.com/opinion/articles/2021-06-08/colonial-hackers-led-the-fbi-down-a-hot-wallet-trail-to-bitcoin-ransom [30] See Paul Rosenzweig, consultant on cybersecurity. Guest essay. 'There's a better way to stop ransomware attacks.' The New York Times. 31 August 2021. nytimes.com/2021/08/31/opinion/ransomware-bitcoin-cybersecurity.html [31] Financial Times. 'China expands crackdown by declaring all crypto activities 'illegal''. 24 September 2021. ft.com/content/31f7edf7-8e05-46e1-8b13-061532f8db5f Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 ('Magellan') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should read and consider any relevant offer documentation applicable to any investment product or service and consider obtaining professional investment advice tailored to your specific circumstances before making any investment decision. A copy of the relevant PDS relating to a Magellan financial product or service may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any strategy, the amount or timing of any return from it, that asset allocations will be met, that it will be able to be implemented and its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan. |
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18 Oct 2021 - New Funds on Fundmonitors.com
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New Funds on Fundmonitors.com |
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15 Oct 2021 - Performance Report: Cyan C3G Fund
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| Fund Overview | Cyan C3G Fund is based on the investment philosophy which can be defined as a comprehensive, clear and considered process focused on delivering growth. These are identified through stringent filter criteria and a rigorous research process. The Manager uses a proprietary stock filter in order to eliminate a large proportion of investments due to both internal characteristics (such as gearing levels or cash flow) and external characteristics (such as exposure to commodity prices or customer concentration). Typically, the Fund looks for businesses that are one or more of: a) under researched, b) fundamentally undervalued, c) have a catalyst for re-rating. The Manager seeks to achieve this investment outcome by actively managing a portfolio of Australian listed securities. When the opportunity to invest in suitable securities cannot be found, the manager may reduce the level of equities exposure and accumulate a defensive cash position. Whilst it is the company's intention, there is no guarantee that any distributions or returns will be declared, or that if declared, the amount of any returns will remain constant or increase over time. The Fund does not invest in derivatives and does not use debt to leverage the Fund's performance. However, companies in which the Fund invests may be leveraged. |
| Manager Comments | The fund's returns over the past 12 months have been achieved with a volatility of 13.13% vs the index's 10.86%. The annualised volatility of the fund's returns since inception in August 2014 is 16.24% vs the index's 16.49%. Over all other periods, the fund's returns have been more volatile than the index. The fund's down-capture ratio for returns since inception is 47.87%. Over all other periods, the fund's down-capture ratio has ranged from a high of 98.85% over the most recent 24 months to a low of -206.53% over the latest 12 months. A down-capture ratio less than 100% indicates that, on average, the fund has outperformed in the market's negative months over the specified period, and negative down-capture ratio indicates that, on average, the fund delivered positive returns in the months the market fell. |
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15 Oct 2021 - Performance Report: Airlie Australian Share Fund
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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). The fund has a 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 fund's returns over the past 12 months have been achieved with a volatility of 9.59% vs the index's 9.42%. The annualised volatility of the fund's returns since inception in June 2018 is 16.13% vs the index's 16.57%. Over the past 24 and 36 month periods, the fund's returns have had an annualised volatility of 18.99% and 16.82% respectively, lower than the index's annualised volatility over both periods; 19.81% (24 months), 17.37% (36 months). Since inception in June 2018 in the months where the market was positive, the fund has provided positive returns 100% of the time, contributing to an up-capture ratio for returns since inception of 112.96%. Over all other periods, the fund's up-capture ratio has ranged from a high of 120.85% over the most recent 12 months to a low of 112.28% over the latest 36 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period. The fund has a down-capture ratio for returns since inception of 94.69%, indicating that it typically hasn't fallen further than the market in the market's negative months. |
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15 Oct 2021 - Performance Report: 4D Global Infrastructure Fund
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| Fund Overview | The fund is managed as a single portfolio 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 fund's returns over the past 12 months have been achieved with a volatility of 12.05% vs the index's 9.5%. The annualised volatility of the fund's returns since inception in March 2016 is 12.25% vs the index's 12.76%. Over all other periods, the fund's returns have been consistently less volatile than the index. The fund's Sortino ratio (which excludes volatility in positive months) has ranged from a high of 4.34 for performance over the most recent 12 months to a low of 0.11 over the latest 24 months, and is 1 for performance since inception. By contrast, the S&P Global Infrastructure TR (AUD) Index's Sortino for performance since March 2016 is 0.71. Since inception in March 2016 in the months where the market was positive, the fund has provided positive returns 95% of the time, contributing to an up-capture ratio for returns since inception of 104.84%. Over all other periods, the fund's up-capture ratio has ranged from a high of 113.07% over the most recent 12 months to a low of 97.66% over the latest 48 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months. The fund has a down-capture ratio for returns since inception of 93.51%, indicating that, on average, it hasn't fallen further than the market during the market's negative months. |
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15 Oct 2021 - Performance Report: Bennelong Emerging Companies Fund
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| Fund Overview | The Fund may also invest in companies expected to be listed on the ASX within 12 months, and may also invest in companies listed, or expected to be listed, on other exchanged where they relate to ASX-listed securities. |
| Manager Comments | The fund's returns over the past 12 months have been achieved with a volatility of 8.91% vs the index's 9.42%. The annualised volatility of the fund's returns since inception in November 2017 is 31.15% vs the index's 15.57%. Over the past 24 and 36 month periods, the fund's returns have had an annualised volatility of 36.65% and 33.97% respectively, higher than the index's annualised volatility over each of those periods; 19.81% (24 months), 17.37% (36 months). Since inception in November 2017 in the months where the market was positive, the fund has provided positive returns 85% of the time, contributing to an up-capture ratio for returns since inception of 321.13%. Over all other periods, the fund's up-capture ratio has ranged from a high of 276.99% over the most recent 36 months to a low of 123.55% over the latest 12 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period. |
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