NEWS
20 Mar 2015 - Hedge Clippings
What difference a word makes!
Everyone understands that markets are waiting for the inevitable rate rise in the US, but it was not until this week that it became apparent that those same markets are hanging out not just for the latest economic statistics, nor for the latest pronouncements from the US Federal Reserve. What became apparent this week was that markets are reacting (or should that be overreacting?) to the slightest nuance in Fed speak.
This time it was the Fed's removal of the word patient from their statement, although it was helped along by a lowering of their economic and inflation outlook. This saw market expectations for rate rise pushed out by two or three months. As a result the US dollar's recent rise came to an abrupt halt, and equity markets soared.
So the question is that if markets can react so dramatically on the basis of the removal of one word, and the delay of the inevitable rate rise of somewhere between one and three months, how are they going to react when that inevitability turns to fact?
As much as Janet Yellen and her US Central Bank colleagues would like to smooth and calm markets by managing their expectations, all the indications are that the herd is likely to break from a trot into a stampede when she finally makes her move.
Locally the ASX200 has risen over 12% year to date, approximately double its rise in 2014 as a whole, as investors' expectations for a rate cut remain on track, in spite of the slump in commodity prices, and the longer term outlook for the federal budget deficit which only Tony Abbott himself now seems to see as a problem.
We remain concerned about the government's seeming inability to communicate effectively at nearly any level, be it one on one in the Senate, or more broadly with the electorate via the media where their credibility seems limited at best, and a boring budget in a couple of months won't help. Consumer and business confidence is significantly at risk as a result.
Specific results received this week include the following PERFORMANCE UPDATES:
The Cor Capital Fund returned 0.56% during February, above the Index return of 0.19%, with an annual return since inception of 6.36% (Index 2.71%).
FUND REVIEW released this week is, with the potential for earning CPD points: Monash Absolute Investment Fund.
FUND IN FOCUS VIDEO released this week:
Jack Lowenstein, the Joint CIO of the Morphic Global Opportunities Fund discusses the 2015 market outlook and
Understanding Hedge Funds - Episode 4 providing insight on how to analyse and measure fund performance.
25-27 March 2015 - Digital Marketing for Banking and Financial Services Summit
And now for something completely different or more of the same, this clip on Tony Abbott shows what we were referring to.
On that note, I hope you have a happy and safe week-end.
Kind regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
Connect with me on LinkedIn Twitter
| Registration to AFM is free and provides general information and performance data on Absolute Return, Hedge Funds and Alternative Investments. | Fund Managers and paid Subscribershave access to details on Individual Managers and Funds, with historical results, key performance indicators, latest news and performance reports. | Prism Select provides self-directed investors and their advisors with factual information, performance data and opportunity to apply for funds online using OLIVIA123. |
Tune into Foxtel's Sky Business every Monday at 2:15pm for AFM's weekly comment. |
20 Mar 2015 - Cor Capital Fund
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| Fund Overview | The Cor Capital Fund is a Multi- Asset Fund which combines a pre-determined strategic asset allocation with active but systemised rebalancing to generate returns and manage volatility whilst maintaining transparency and liquidity. The Fund strategy is not reliant on accurate market predictions, forecasts or timing for success. Returns are generated in a number of ways; 1) by maintaining sufficiently large positions in a diverse group of asset classes, 2) via the 'volatility harvesting' consequences of active rebalancing, and 3) from the offsetting behaviour of certain asset classes under specific conditions. The combined portfolio is expected to exhibit relatively low volatility and low turnover. In the interests of avoiding complexity, maintaining liquidity, and minimising reliance on third parties, the Fund strategy does not employ gearing, derivatives or short-selling. |
| Manager Comments | The Fund's rebalancing away from gold and into equities at the end of January proved timely with the precious metal subsequently falling in price by 5 percent and equities surging nearly 7 percent. The Manager continued to capitalise on this increased volatility in February when asset class limits were again breached but in the opposite direction to January. The Fund's equities position was trimmed by 6% at the end of February and the proceeds were largely moved back to gold. |
| More Information | » View detailed profile of this fund |
19 Mar 2015 - Fund In Focus - Morphic Global Opportunities Fund
Jack Lowenstein, the Joint CIO of the Morphic Global Opportunities Fund discusses the market outlook for 2015 and the Fund strategies.
Watch AFM's other videos.
19 Mar 2015 - Morphic Global Opportunities Fund
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| Manager Comments | The strong market in February came despite a small recovery in the Australian dollar, with global markets up 5.6% in US dollar terms. On a regional basis, Japan did best, with Europe and US in line with world markets, and emerging markets were weak. Gains came steadily over the period despite high anxiety mid-month about a Greek exit from the Eurozone. Stock selection rather than asset allocation accounted for most of the Fund's underperformance, with hedging costs associated with preparing to protect the Fund from the adverse effects of a failure in the Greek negotiations for an extension of its bailout adding only marginally The Fund closed the month fully invested, with the main features being overweight positions in China and India against the rest of the emerging market complex, and an overweight position in Japan and Europe against the US. Greece related hedges have been removed post month end. The Fund slightly cut its underweight position in the Australian dollar during the month. |
| More Information | » View detailed profile of this fund |
18 Mar 2015 - Optimal Australia Absolute Trust
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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. |
| Manager Comments | The Fund had a gross exposure of 82.30% and net exposure of -15.80%. The Fund's long positions did a very solid job, with portfolio attribution of 2.94% on average long exposure of 33% of Fund NAV (a return of over 9% if grossed-up to 100% long exposure), but this good work was offset by losses on our shorts and derivative hedge positions. |
| More Information | » View detailed profile of this fund |
17 Mar 2015 - Fund Review: Monash Absolute Investment Fund February 2015
MONASH ABSOLUTE INVESTMENT FUND
- The Fund is a research driven, active equity long/short strategy investing in listed ASX companies.
- The Fund seeks to identify opportunities in the share market to make positive returns (long and short) irrespective of market conditions. It is style agnostic, as compelling investment opportunities exist across all investment styles from time to time. The Fund places a high priority on capital preservation, and has an absolute return focus in accepting market risk.
Sean Webster
Research and Database Manager
Australian Fund Monitors
Monash Absolute Investment AFM Fund Report Feb 2015 (pdf format)
16 Mar 2015 - Hedge Clippings
IMR moves a little closer, and what's Joe Hockey up to?
This week we're pleased to see that a little more than five years after the Johnson Report's recommendation, Treasury has announced Element 3 of the Investment Management Regime, or at least draft legislation relating thereto, and is inviting comment on the design of the amendments, the purpose of which is to enable offshore investors to invest via local fund managers without being penalised as a result of Australia's peculiar, if not unique, managed fund tax structures.
For those wanting more information, please click here.
Regular recipients of Hedge Clippings would be well aware that our weekly commentary can stray from the topic of managed funds, occasionally commenting on the economy, markets, regulations, and even politics, or at least the impact of our various political masters on such matters, although we do try to keep on track (up to a point).
There are reasons for this, including the obvious one that such matters, particularly regulations, do impact on markets and therefore managed funds. There are others of course, including the fact that our Friday lunchtimes are spent writing and editing Hedge Clippings, and thus we might possibly still be appropriately focussed, while many recipients of Clippings will hopefully be significantly more realxed, or well on thier way to getting there.
So for those less interested in the IMR mentioned above, has anyone else been concerned that our erstwhile treasurer, Joseph Benedict Hockey, seems to have spent the best part of the past week in court defending his reputation, rather than attending to the business of running the country's finances?
Maybe it's because his first budget, introduced a full ten months ago, was so inept, imbalanced, and, even according to his own colleagues, poorly sold (sorry, "communicated" to the electorate) that it has yet to be passed in full, while many of the more contentious issues have been dropped that he's trying to divert attention away from his performance as Treasurer.
Maybe, in spite of the fact that as a long term (although maybe not that much longer) politician he really is so thin skinned that he was genuinely offended by the suggestion that allowing some lucky constituents to pay $22,000 for the benefit of having privileged access to him questioned his integrity.
Maybe it's because payments received as a result of successful defamation actions are, we understand, not taxable.
Whichever or whatever it is, we're not sure the electorate is getting its money's worth.
Specific results received this week include the following PERFORMANCE UPDATES:
KIS Asia Long Short Fund returned -0.35% in January bringing the Fund's annual return since inception to 14.83%.
FUND REVIEWS released this week, with the potential for earning CPD points: Supervised High Yield Fund; Insync Global Titans Fund; Alpha Beta Asian Fund.
FUND IN FOCUS VIDEO released this week: Understanding Hedge Fund - Episode 3 explaining the Hedge Fund Strategies and Fund Types.
25-27 May 2015 - Digital Marketing for Banking and Financial Services Summit
And now for something completely different and continuing our theme from last week's hedge clipping, for all those frustrated parents and office colleagues, we bring you this instructional video.
On that note, I hope you have a happy and safe week-end.
Kind regards,
Chris
CEO, AUSTRALIAN FUND MONITORS
Connect with me on LinkedIn Twitter
| Registration to AFM is free and provides general information and performance data on Absolute Return, Hedge Funds and Alternative Investments. | Fund Managers and paid Subscribershave access to details on Individual Managers and Funds, with historical results, key performance indicators, latest news and performance reports. | Prism Select provides self-directed investors and their advisors with factual information, performance data and opportunity to apply for funds online using OLIVIA123. |
Tune into Foxtel's Sky Business every Monday at 2:15pm for AFM's weekly comment. |
16 Mar 2015 - Bennelong Kardinia Absolute Return Fund
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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 net equity market exposure of the Fund (including derivatives) was decreased to 40.80% (81.80% long and 41.0% short). Ramsay Health Care, SurfStitch,Bank of Queensland and APA were all significant contributors to performance, whilst Share Price Index Futures (hedging long positions), a long position in Genworth and a short position in ASX were the major detractors. |
| More Information | » View detailed profile of this fund |
16 Mar 2015 - Understanding Hedge Funds - Episode 4
Chris Gosselin, CEO of Australian Fund Monitors explains Hedge Funds and in particular helps answer the questions asked by investors to determine which Fund Manager with whom to invest.
Take a look at the earlier videos in the series here.
13 Mar 2015 - Fund Review: Alpha Beta Asian Fund Review January 2015
ALPHA BETA ASIAN FUND
AFM has updated the Fund Review on the Alpha Beta Asian Fund.
CPD Points are now available for all AFM Fund Reviews. Read the review and answer 5 questions to earn half a point toward your continuing professional development.
Key points include:
- The Fund The Alpha Beta Asian Fund invests in Asian listed equity markets with a focus on liquid companies in Australia, Japan, Hong Kong, Indonesia, Philippines and Thailand. The Fund uses a systematic approach to evaluate macroeconomic, company fundamental and price data, all of which are evaluated through a series of quantitative models.
- Sydney based Alpha Beta Capital was established by Andrew Barry and Ken Lewis in May 2012. Both Barry and Lewis have significant qualifications and international experience in funds management, including working together at Coronation International, a global multi-strategy hedge fund group in London.
- The Strategy relies on a number of core beliefs: Firstly that a well designed systematic investment process, operating within a multi-strategy framework will be able to extract consistent returns, on average, with low volatility. Secondly, by utilising holding periods substantially shorter than the industry-norm, profit opportunities consistently arise. Finally, a strategy that holds a large number of small positions versus a small number of concentrated positions, will remove much of the emotional angst of trading, and the investment process becomes repeatable.
- In keeping with the Manager's overall systematic approach the Risk Management includes real time monitoring of positions and market exposure, and is combined into a proprietary and automated system called PARMS (Portfolio and Risk Management System). PARMS is a centralised and integrated system which provides full functionality including stress testing.
For further details on the Fund, please do not hesitate to contact us.
Sean Webster
Research Manager
Alpha Beta Asian Fund AFM Fund report Jan 2015 (pdf format)
