NEWS
29 Sep 2020 - Performance Report: The 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). Maximum cash holding of 10% with an aim to be fully invested. Airlie employs a prudent investment approach that identifies companies based on their financial strength, attractive durable business characteristics and the quality of their management teams. Airlie invests in these companies when their view of their fair value exceeds the prevailing market price. It is jointly managed by Matt Williams and Emma Fisher. Matt has over 25 years' investment experience and formerly held the role of Head of Equities and Portfolio Manager at Perpetual Investments. Emma has over 8 years' investment experience and has previously worked as an investment analyst within the Australian equities team at Fidelity International and, prior to that, at Nomura Securities. |
| Manager Comments | The Airlie Australian Share Fund rose +4.18% in August, outperforming the ASX200 Accumulation Index by +1.35% and taking 12-month performance to +4.43% vs the Index's -5.08%. Since inception in June 2018, the Fund has returned +6.44% p.a. vs the Index's annualised return over the same period of +4.29%. These returns have been achieved with a similar level of volatility to the market. At month-end, the portfolio's top positions included Aristocrat Leisure, Aurizon Holdings, BHP Group, Coles Group, CBA, CSL, Macquarie Group, Mineral Resources, Origin Energy and Wesfarmers. By sector, the top three sectors were Financials (23% of the portfolio), Consumer Discretionary (14%) and Industrials (10%). The Fund ended the month with 5% in cash. Last week Australian Fund Monitors' CEO, Chris Gosselin, caught up with Matt Williams, Portfolio Manager at Airlie Funds Management, to discuss the performance of the fund throughout 2020. You can either click here to watch the video or click here to listen to the interview as a podcast. |
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29 Sep 2020 - Performance Report: Gyrostat Absolute Return Income Equity Fund
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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 returned -1.27% in August. Gyrostat noted returns were lower as volatility fell which was consistent with their guidance for stable markets. Market conditions during the month enabled Gyrostat to enter additional positions for more elevated returns on any uplift in market volatility. The investment strategy allows for up to 15% of the Fund's assets to be invested in international assets, with positions in S&P500, Nasdaq, Hang Seng, MSCI Developed and Emerging Markets (among others). Gyrostat anticipate returns in all market environments of at least BBSW 90 +3% which they expect will enable investors to receive income and capital growth. The Fund also includes a 'tail hedge' for gains on large market falls. Gyrostat anticipate increasing levels of 'late cycle' market volatility with elevated geopolitical risk, historically high debt levels and elevated valuations. |
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29 Sep 2020 - 3 mistakes to avoid when picking a fundie
28 Sep 2020 - Performance Report: Australian Eagle Trust Long-Short Fund
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| Manager Comments | The portfolio's largest positive contributors for the month came from long positions in IDP Education Ltd, Xero Ltd and a short position in Whitehaven Coal Ltd, while the largest detractors were a long position in ResMed Inc and short positions in WiseTech Global Ltd and Flight Centre Ltd. The Fund ended the month with 32 long positions and 22 short positions, with the largest exposure being to medical devices & services and technology stocks. The Fund ended the month with relatively less exposure to banking and real estate stocks. |
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28 Sep 2020 - Performance Report: Bennelong Concentrated Australian Equities Fund
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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 | As at the end of August, the portfolio's weightings had been increased in the Discretionary and IT sectors, and decreased in the Health Care, Consumer Staples, Materials, REIT's, Industrials and Financial sectors. The portfolio is significantly more heavily weighted towards the Discretionary and Health Care sectors, with 'Active Weightings' of 25.3% and 12% respectively; the portfolio's weighting towards the Discretionary sector is 32.9% vs the Index's 7.7%, and 32.9% for the Health Care sector vs the Index's 11.8%. |
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25 Sep 2020 - Hedge Clippings | 25 September 2020
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25 Sep 2020 - Performance Report: Harvest Lane Asset Management Absolute Return Fund
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| Fund Overview | Harvest Lane Asset Management employs a conservative, highly selective and opportunistic approach. Using their extensive knowledge in the area of corporate actions, the Fund's managers assess each opportunity based on a thoughtful, diligent and disciplined process and invest where they believe an opportunity exists to generate above average investment returns relative to the risk incurred. Investment decisions are made without speculating on market direction, with rigid risk controls enforced to minimise the risk of large losses of investor capital. The Fund invests in securities that are predominantly listed on the ASX and occasionally in those listed in other developed markets. Equity swaps and other derivatives may be used at times to reduce risk. The fund typically holds high levels of cash in the absence of sufficiently attractive opportunities to deploy investor capital in accordance with its objectives. |
| Manager Comments | The Harvest Lane Absolute Return Fund rose +1.66% in August. Since inception in July 2013, the Fund has returned +4.99% p.a. with an annualised volatility of 10.57%. The Fund has maintained a down-capture ratio for performance since inception of 16.29% which indicates that, on average, the Fund has significantly outperform during the market's negative months. Harvest Lane saw a lull in corporate activity during August as the market paused to assess the damage during reporting season. However, they noted this lull didn't last for long having seen a flurry of activity in the first week of September. Harvest Lane highlighted the transaction between Abano Healthcare (ABA.NZX) and BGH Capital as one of the most interesting they witnessed during the month. BGH Capital walked away from a NZ$5.70 per share transaction in March by relying on a Material Adverse Change (MAC) clause to exit the deal. The revised deal was struck at a lower headline price of NZ$4.45 with the added condition that the new deal could not be terminated due to a material adverse change. Other key transactions throughout the month are discussed in more detail in the latest performance report. Overall, Harvest Lane are pleased with the Fund's performance in August and expect September to be the same. They noted they continue to make progress making up the portfolio's recent underperformance and are genuinely encouraged by the level of corporate activity they are currently witnessing. |
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25 Sep 2020 - Performance Report: Ark Global Fund - Class B AUD Hedged
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| Fund Overview | The investment objective of the Fund is to achieve long-term capital appreciation with low correlation to global equity markets through investment in the Underlying Fund. Fund One is a global macro fund that utilises quantitative research including machine learning techniques and fully automated trading algorithms which will aim to generate positive uncorrelated returns relative to any significant equity benchmark. The traded instruments are either major FX pairs or the most liquid exchange traded stock index, bond, and commodity futures across North America, Europe and Asia Pacific. The algorithm backtests over 10 years of tick data and in order to do so effectively requires machine learning to filter noise and identify meaningful signals, which results in statistically significant prediction of price movements. In production this processing is done in real time and the portfolio reacts to asset movements by rebalancing automatically to the desired risk exposure through the market impact optimised execution logic. Risk management layers built into the algorithm have been developed using the experience the team has gained from their decades in highly liquid fast-moving markets in the proprietary High Frequency Trading world. This allows the system to trade autonomously but safely to all trading opportunities and potential system issues, and to alert the team to any behaviour outside of strictly controlled bounds. The Fund is a 'feeder fund' which indirectly gains exposure to the underlying assets by investing all or substantially all of its assets in the Underlying Fund. The Fund may retain a certain amount of cash from the investment in the Fund for the purpose of payment of costs, fees, hedging and expenses. |
| Manager Comments | The best performing assets for the month were: Euro Stoxx 50 (+1.71% of NAV), Euro/USD (+0.86% of NAV) and 10-yr US Treasury Note (+0.80% of NAV). The worst performing assets were: E-mini S&P 500 (-0.47% of NAV), AUD/USD (-1.02% of NAV) and S&P/TSX 60 (-1.39% of NAV). |
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25 Sep 2020 - Performance Report: Bennelong Twenty20 Australian Equities Fund
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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 | As at the end of August, the portfolio's weightings had been increased in the Discretionary, IT and Health Care sectors, and decreased in the Communication, Consumer Staples, Industrials, Materials, Energy and Financial sectors. By comparison with the Fund's benchmark (ASX300 Accumulation Index), the portfolio is significantly more heavily weighted towards the Discretionary sector, with an 'Active Weight' of 19.6%. |
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