NEWS
2 Oct 2014 - Morphic Global Opportunities Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | |
| Manager Comments | The fund's top active positions were Japanese Drug Stores, US banks and UK water utilities. The Fund's best contributor was one of our longest-term holdings, US chip design services firm Mentor Graphics, which rose almost 10% as the company reported a solid quarterly earnings beat on exceptional sales to its automotive design clients. On a PE of 12 Mentor remains too cheap for a business with such a robust oligopoly industry structure and compared to its peers. The Fund continues to position itself for a bull market. Europe appears to be joining the liquidity party and trends in many emerging markets are showing signs of having bottomed. The Fund is fully invested with some option positions to profit from any further surge. The fund has hedged some of its euro exposure into sterling and USD, and some of its yen back into Australian dollars. |
| More Information | » View detailed profile of this fund |
1 Oct 2014 - Allard Investment Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | |
| Manager Comments | Since inception in July 2003 the Fund has delivered a return of 8.8% pa as compared to teh MSCI Asia Pacific (ex Japan) Index of 10.6% with around 60% of the Index volatility with Fund volatility of 7.9% as compared to 13.5%. The Fund geographical exposure was HK/China 42.9%, Singapore 12.6%, Korea 8.1% and Cash and Fixed Income holdings of 22.5%. In terms of industry breakdown the three largest sectors were Financial Services 19.3%, Conglomerates 12.6% and Telcos 8.8%. |
| More Information | » View detailed profile of this fund |
29 Sep 2014 - Hedge Clippings
And now for something completely different to start with. Hedge Clippings on a Monday.
The past couple of weeks have seen two "exit" news items out of the USA which have caught the attention of the absolute return sector. Firstly CalPERS, (California Public Employees' Retirement System) a significant and longstanding hedge fund investor, decided to exit their entire $4 billion exposure to the sector, followed last week by the news that investment manager Bill Gross, frequently cited as one of the industry's gurus and a founder and 40 year veteran of PIMCO, with a total of $2 trillion in FUM had quit to join the much smaller Janus Capital Group.
As this article from Forbes explains, while CalPERS' $4 billion seems a significant chunk of capital, it represented only a small portion of the $300 billion they manage in total. If one used the Australian Future Fund's hedge fund exposure of 16% as an example, CalPERS would have to increase their allocations by a massive $44 billion to match it.
CalPERS cited fees, performance and complexity as being amongst the reasons for their exit from hedge funds, and we have no doubt all are a significant factor. But with only just over 1% of their assets allocated to any one sector, it made it difficult (and expensive) to make a significant difference to their overall performance, which incidentally hadn't been too good.
The problem comes down to the trade-off between size and performance. It has long been understood that while the majority of institutional investors' capital flows into the largest 10% of funds, it is equally accepted that this is not where the best returns are to be found.
Take Bill Gross' fund at PIMCO for example. Over the past 15 years he provided returns in the top 12% of his peers, but over the past 12 months he has lagged to be in the bottom 20%. At his new home, Janus Capital Group, he will reportedly have just $13 million in FUM, and be in a significantly better position to outperform once again.
Anecdotal evidence suggests that there were other issues in his exit from Pimco, including differences of opinion over management. While his new fund won't have the luxury of the management fees he was earning, he will have the flexibility and freedom to return to being a nimble investor, one of the key drivers of small to medium funds' out performance of their larger competitors.
It seems size isn't just important, it just matters.
Specific results received this week include the following PERFORMANCEUPDATES:
KIS Asia Long Short Fund returned -0.1% during August and 9.57% over the prior twelve months with a low volatility of 2.65%.
Results for August show the Laminar Credit Opportunities Fund returned 0.53% for a 12 month return of 9.64% (RBA Cash Rate average 2.50%) with a volatility of 0.59%.
The Auscap Long Short Australian Equities Fund returned 5.24% during August, a strong out-performance of the equity market return of 0.62%, with a 12 month performance of 44.87% and a volatility of 6.55%.
Pengana Absolute Return Asia Pacific Fund returned 0.60% in August and 7.57% for the year with a volatility of 2.85% and a Sharpe ratio of 1.72.
During August, the Totus Alpha Fund delivered 2.02% bringing the 12 month performance to 37.96% with a volatility of 15.63%.
CPD points are available for all FUND REVIEWS released this week including:
Monash Absolute Investment Fund; Microequities Deep Value Microcap Fund; Optimal Australia Absolute Trust; Alpha Beta Asian Fund
15-17 October Grace Hotel, Sydney - Investment Performance Measurement, Attribution & Risk Management Forum will have leading experts sharing up-to-date, cutting edge ideas and insight on frontiers of recent developments in performance measurement.
21-22 Octoberin Sydney Post-Retirement Australia 2014 conference. Comprehensive two day forum for high profile cross industry participants to provide updates, insights and ongoing discussion into the key issues central to achieving optimal financial outcomes.
Friday 24 Octoberin Sydney Financial and Media Markets Charity Regatta Day out of Middle Harbour Yacht Club. Promises to be a fantastic day.
5-6 November, Grace Hotel, Sydney. Alternative Investments Conference - Investigating the rise of non-traditional high yield and low risk investment products, strategies and allocation in an era of prolonged volatility and low returns.
This week's Now For Something Completely Different, this guy should buy a lottery ticket, he wasn't even wearing a helmet.
Best wishes for a happy and healthy week ahead,
Chris
Connect with me on LinkedIn Twitter Facebook
| Registration to AFM is free and provides general information and performance data on Absolute Return, Hedge Funds and Alternative Investments. | Fund Managers and paid Subscribers have 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 Sky Business on Foxtel every week on Monday at 2:15 pm for AFM's weekly comment. |
Australian Fund Monitors are helping to raise awareness to support research into prevention and cure for cerebral palsy. For more information visit www.cpresearch.org.au or contact me by email.
29 Sep 2014 - Fund Review: Alpha Beta Asian Fund AFM Fund Review August 2014
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 August 2014 (pdf format)
26 Sep 2014 - Fund Review: Optimal Australia Absolute Trust August 2014
OPTIMAL AUSTRALIA ABSOLUTE TRUST
AFM have released the most recently updated Fund Review on the Optimal Australia Absolute Trust.
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.
We would like to highlight the following:
- Optimal Australia is a specialist Australian equity investment manager and the Fund has a long/short equity strategy typically with a low but variable net market exposure comprising 40 to 65 stocks broadly selected from within the ASX200.
- The investment team comprising George Colman, Peter Whiting supported by Stephen Nicholls and Justin Hay have over 100 years combined experience in equity markets.
For further details on the Fund, please do not hesitate to contact us.
Sean Webster
Research and Database Manager
Australian Fund Monitors
Optimal Australia Absolute Trust - August (pdf format)
26 Sep 2014 - Totus Alpha Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The Fund is a long/short investment fund principally investing in listed entities, commodities, futures and options in Australia and internationally. The Fund is not a market neutral fund and accordingly may switch between net long positions and net short positions. The Fund may use short sales and derivatives. Gearing may be used to enhance returns and the Fund may be geared in excess of 100% of the Fund's Net Asset Value. There is a limit to net exposure of 150%. |
| Manager Comments | The Up and Down Capture ratios are notable at 1.6 and -0.50 respectively. The current market setup is potentially favourable for a nimble long short manager. We have the possibility of QE ending in the USA next month, volatility is so low at present that the risk from here is more than likely to the upside and corporate activity (such as IPO's, placements) is still very strong. with events such as the IPO of Medibank (due to list before xmas) capable of moving the performance needle for a small fund like ours. Top contributors to performance in August were our long positions in McMillan Shakespeare +1.13% & Intueri Education +0.94% (scarce growth). Index Futures positions also contributed +1.00%. Biggest detractors from performance were our long positions in Fortescue Metals -0.76% (deleveraging), Mint Wireless -0.69% (cashless society) & Henderson Group -0.34% (financial services). |
| More Information | » View detailed profile of this fund |
25 Sep 2014 - Fund Review: Microequities Deep Value Microcap Fund August 2014
MICROEQUITIES DEEP VALUE FUND
Attached is our most recently updated Fund Review on the Microequities Deep Value Fund.
- The Microequities Deep Value Fund has a 5 year track record investing in ASX listed equities. The Fund is a fundamental, research-driven Fund investing in equities with a market cap below $250m. The Fund uses a value philosophy based on the view that microcaps are often under-researched and under-valued.CIO Carlos Gil has over 15 years financial market experience across a broad range of equities.
- The Fund does not short, use derivatives or borrow i.e., it is long only and is concentrated; usually with 15 to 20 companies across industrial sectors.
- Resource stocks are avoided.
If you have any questions in relation to the Fund Review or the CPD points, please do not hesitate to contact us.
Sean Webster
Research and Database Manager
Australian Fund Monitors
Microequities Deep Value Microcap Fund Review August (pdf format)
25 Sep 2014 - Pengana Absolute Return Asia Pacific Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The Fund seeks to profit from trading securities which are primarily subject to corporate events or from trading-related securities which the Investment Manager believes are mispriced by the market. The Fund invests in securities that are listed on Asian stock markets and other markets where related securities may be listed and in securities which are listed on markets outside of Asia where more than 70% (by assets or earnings) of the underlying business originates from an Asian country. The Fund aims to generate consistently positive returns which have a low correlation to the Asian stock markets. The objective is to generate 10-20% pa with a standard deviation of 6-10% |
| Manager Comments | The Fund finished up 0.6% for the month, while Asian markets (FTSE Asia Pacific Index) fell -0.6%. Investor focus shifted to the impending China 'Through Train' as we observed significant movements in some dual listed structures. The Fund maintained average gross and net exposure of 215.7% and 10.2% respectively during the month. With focus on the 'Through Train', the Fund analysed the movements in the Hong Kong listed holding companies and noted that a contraction of the discounts was very much in swing since early in July. Prior to the Through Train announcement in April, we observed Hong Kong holding companies trading at ~ 35% discounts, which had contracted to ~ 25% by the end of August. The connectivity of the China and Hong Kong exchanges is very much a liquidity event which will present unique trading opportunities. |
| More Information | » View detailed profile of this fund |
24 Sep 2014 - Auscap Long Short Australian Equities Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The Fund focuses on fundamental long and short investments. The Fund may utilise a multi-strategy approach if short term opportunities to increase returns, hedge the portfolio, protect capital or minimise volatility are found. The Fund is a high conviction fund and the combined portfolio will typically have 25-45 positions, investing primarily in stocks in the ASX200. The Fund may be net long, short or neutral depending on the strategies employed at the time. The Fund may hold cash so that it is in a position to take advantage of market volatility and compelling investment opportunities as and when they arise. The Fund may be geared up to 200% gross long or short and up to 150% net long or short. |
| Manager Comments | Over the last 12 months the Fund has recorded a Sharpe ratio of 5.40, 100% positive months with Up and Down Capture ratios of 1.73 and -1.00 with the Sharpe ratio since inception (Dec 2012) is 3.39. Average gross capital employed by the Fund was 144.8% long and 22.5% short and average net exposure over the month was +122.3%. At the end of the month the Fund had 37 long positions and 5 short positions. Over the course of the last financial year, the Fund had a large exposure to the consumer discretionary, diversified financials, healthcare, industrials, real estate and telecommunications sectors. These sectors contributed most of the Fund's FY14 returns. The Fund had very little exposure to the two largest sectors in the market, Banks and Materials. |
| More Information | » View detailed profile of this fund |
23 Sep 2014 - AIMA Australia Hedge Fund Forum 2014 News Wrap
AIMA Australia Hedge Fund Forum - 16 September 2014: News Wrap
The AIMA Australia Hedge Fund Forum last week showcased the skill of local managers, their approach to business and their market views to local and international delegates.
Discussion also focused on how the Australian hedge fund industry can better engage with investors, and touched on the regulatory and market forces that are shaping the industry's future. Nearly 300 investors, managers and service providers attended the forum, making it the largest conference of its kind in Australia.
Highlights from the Forum included:
AUSSIES BEST IN LOCAL SHARES
- Australian hedge fund managers are "clearly" skillful in long/short Australian equities and "possibly" skillful in fixed interest but are lagging international managers in global macro, over the past 10 years, according figures produced by Australian Fund Monitors for AIMA Australia. But, over the past five years, Australian global macro managers have performed as well as their international counterparts.
- With the centre of the investing universe shifting away from New York and London and towards China, Australia's distance from the major markets is becoming less of an issue. Being in, or close to, the Asian time zone will increasingly be an advantage.
Read the entire "NewsWrap" here.
AIMA Australia Hedge Fund Forum 2014 (pdf format)
