NEWS
Out with the old, in with the new
29 Jun 2012 - Chris Gosselin, Australian Fund Monitors
Tomorrow, June 30th sees the end of the financial year in Australia, and while that has little impact on many of our overseas subscribers, for Australian investors in managed funds it marks a yardstick...
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29 Jun 2012 - Out with the old, in with the new
By: Chris Gosselin, Australian Fund Monitors
Tomorrow, June 30th sees the end of the financial year in Australia, and while that has little impact on many of our overseas subscribers, for Australian investors in managed funds it marks a yardstick as profits from the last 12 months have to be distributed (even if re-invested) and then accounted for in their personal 2012 tax returns.
So too will realised gains and profits on the sale of other taxable assets such as listed equities, and given that the past 12 months has not been a universally buoyant time on the ASX200 there may be some despair not only at investor level, but also as the government counts the cost of a lower than forecast tax revenues.
Although there's still a few hours' trading left it looks as if the ASX200 fell by just over 12% in the year to June, and for those who need reminding this leaves it 40% below the peak reached in November 2007. As a comparison the AFM hedge fund index of all funds fell 1.76% over the past 12 months, but is up 7.17% since 2007 (assuming June performance is in line with the market).
There's no doubt investors in many asset classes will be glad to see the back of the past 12 months, but we haven't been able to find many investors, nor many fund managers, who are overly optimistic about the next 12 months. At a time when much of the smart money is heading for the safety of cash or term deposits it will take a while to adjust to the new era of supposed safety but with low returns.
Which brings us back to the hedge fund sector. We have no doubt the sceptics will be out in force to say that hedge funds had their second worst (financial) year on record, but while that is true it ignores the fact that 89% of funds outperformed the ASX200 in the 12 months to May, and 47% provided positive returns to their investors. (These statistics may change when June fund returns are received, but we suspect not by much).
So that's the positive side to the story. On the flip side is that 53% of funds in the AFM database fell over the past year, and therefore won't be contributing to the nation's tax take. And of the 11% of funds which underperformed the ASX, the worst fell by over 32% to take the wooden spoon. No doubt their investors will give them worse than that.
At Fund Monitors it is also a case of June 30 being a turning point, not least of which because it means yours truly turns a year older, a little wider, greyer, but a little wiser. Hopefully. More importantly July will see some significant changes and announcements, including the release of the E5 Active Equity Model Portfolio, which we have tracked for over 5 years, as an investable product for wholesale investors.
The information memorandum for the AFM Prism Active Equity Fund, issued by Providus Capital and will aim to replicate the performance of AFM's model portfolio which has an indicative annualised performance of 15% with volatility of less than 6%. The Fund will allocate to 5-10 of the best managers in AFM's database of over 280 funds, with selection based on a combination of quantitative performance and in depth quantitative due diligence.
Other initiatives are afoot, including the launch of an online Portal featuring "best of breed" funds, an enhanced learning and education centre and much more. Maybe we will embrace social media, who knows?
Don't let anyone tell you old dogs can't learn new tricks.
Regards
Chris Gosselin
Performance Report: QIC Asia Pacific Market Neutral Fund A$ Class
14 Jun 2012 - Australian Fund Monitors
QIC's Asia Pacific Market Neutral Fund produces strong result of +3.16% in May as the MSCI Asia Pacific (ex Japan) index falls 11%
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14 Jun 2012 - Performance Report: QIC Asia Pacific Market Neutral Fund A$ Class
By: Australian Fund Monitors
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| Manager Comments | Risk aversion continued to build over the month as political instability continued in Europe, soft economic data came out of China and the possibility of Greece exiting the Euro again made headlines. By the last week of the month equity markets were reeling as investors continued to take risk off the table. In this risk averse environment QIC's quant strategies performed well, with long momentum, analyst sentiment and value factor models all contributing to varying degrees in different geographic markets. Beta driven factors understandably detracted from performance. |
| More Information | » View detailed profile of this fund |
Performance Report: Aurora Fortitude Absolute Return Fund
13 Jun 2012 - Australian Fund Monitors
Aurora Fortitude provides a positive May return of 0.26% with the Options book providing the bulk of the returns
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13 Jun 2012 - Performance Report: Aurora Fortitude Absolute Return Fund
By: Australian Fund Monitors
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| Manager Comments | Aurora's Options portfolio provided the bulk of the returns as expected in the above environment, with the book heavily weighted towards financials given the large exposure to the sector in the Yield and parts of the M&A book. Elsewhere gains in the Yield book were offset by negative returns in the M&A book pending the outcome of various deals, while small gains in the Convergence book were offset by losses in the Long/Short book. The positive return takes the Fund's winning streak to 11 months, and it remains the only fund to have recorded positive returns for every month of 2008. |
| More Information | » View detailed profile of this fund |
Performance Report: Bennelong Long Short Equity Fund
12 Jun 2012 - Australian Fund Monitors
Bennelong Long/Short fund returns +1.19% in a volatile month against the ASX200\\\\'s fall of over 7% as two profit warnings assisted the short book.
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12 Jun 2012 - Performance Report: Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Manager Comments | The manager, Richard Fish reported that performance was in line with expectations, producing a modest gain in a volatile environment with both long and short cyclical names impacted by the weak market sentiment. At the sector level Healthcare and Industrials added most to performance whilst Media and Materials detracted. Looking forward Fish noted that in the short term Bennelong expect sentiment to remain hostage to events out of Europe, the domestic earnings reporting season and the ability of China to engineer a soft landing. |
| More Information | » View detailed profile of this fund |
Performance Report: Optimal Australia Absolute Trust
8 Jun 2012 - Australian Fund Monitors
Optimal Australia weathers May's market storm thanks to prior caution and a focus on capital preservation
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8 Jun 2012 - Performance Report: Optimal Australia 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. |
| Manager Comments | Optimal are cautious at the best of times, considering preservation of capital to be of the highest priority. As such they had reduced their net exposure coming into May to less than 10%, and then focused on stock selection to avoid the market's turmoil. Looking forward Optimal consider these conditions to be as difficult as they can remember in the past 25 years, and continue to focus on risk management. Having returned 7% over the past 12 months and outperforming the market by close to 15% in that time this approach has served their investors well. |
| More Information | » View detailed profile of this fund |
Performance Report: Optimal Australia Absolute Trust
18 Apr 2012 - Australian Fund Monitors
Optimal Australia's onshore fund returns +0.46% in March as the Manager reflects on the difficulties of reading the market.
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18 Apr 2012 - Performance Report: Optimal Australia 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. |
| Manager Comments | Ever cautious, and in spite of the Fund returning close to 8% over the past 12 months and significantly outperforming the ASX, the Manager considers that equity markets remain difficult to read, citing persistent earnings downgrades, growing concern about China's growth and heightened political uncertainty. Optimal note that equity market bulls continue to argue that local valuations are undemanding in absolute and relative terms, but consider this to be the case only if the forecast earnings supporting the valuations materialise. However, the Manager points out that industrial earnings have declined in aggregate for four successive years as a result of consumer de-leveraging and as the high AUD has cut manufacturing margins. Optimal's caution and risk aversion is apparent in their performance, having only succumbed to negative monthly return on three occasions since launching the Fund in September 2008. |
| More Information | » View detailed profile of this fund |
Performance Report: Bennelong Kardinia Absolute Return Fund
17 Apr 2012 - Australian Fund Monitors
Bennelong's Kardinia Capital returns +1.82% in March, opens to retail investors and offers daily liquidity as it approaches a six year track record
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17 Apr 2012 - Performance Report: Bennelong Kardinia Absolute Return Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund consists of a concentrated long/short portfolio typically comprising 30 to 40 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. There is a slight bias to large cap stocks in the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. The Fund was launched on 17th August 2011 following the resignation of Portfolio Managers Mark Burgess and Kristiaan Rehder from Herschel Asset Management in late July 2011. While at Herschel Burgess and Rehder had managed the Fund under the name of the Herschel Absolute Return Fund. As a result management of the Fund was transferred to Kardinia Capital, a new boutique fund manager 65% owned by Burgess and Rehder, with the balance owned by Bennelong Funds Management. The Fund's investment strategy and prior track record remains intact. |
| Manager Comments | In addition to opening to retail investors and lowering the minimum investment, Kardinia is also moving to daily liquidity for all investors, offering a point of difference with the majority of wholesale absolute return funds which remain on monthly terms. Kardinia Capital was formed in August 2011 to manage the Fund which was previously under the Herschel brand. Since the move the Fund has seen steady inflows which should increase as the Fund approaches a six year track record of positive annual returns, and as the investor base widens. |
| More Information | » View detailed profile of this fund |
Performance Report: Bennelong Long Short Equity Fund
16 Apr 2012 - Australian Fund Monitors
Bennelong's long short equity fund returns 6.35% in March as gains on both longs and shorts aids the recovery from February's decline
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16 Apr 2012 - Performance Report: Bennelong Long Short Equity Fund
By: Australian Fund Monitors
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| Manager Comments | The best performing sector for the month for the Fund was Consumer discretionary, closely followed by Healthcare, while stock selection in the Financial sector detracted from performance, as did Industrials. Looking forward Bennelong believe the market is unlikely to continue its move higher after the strong March quarter, and given the soft domestic economic environment and their assessment of the profit outlook they believe that risk continues to lie on the downside. Leverage at month end was 4.6 times, slightly higher than the fund's long term average, and remains closed to new investors. |
| More Information | » View detailed profile of this fund |
Lodestar Capital Partners to close at the end of June 2012
2 Apr 2012 - Australian Fund Monitors
Lodestar Capital Partners, a boutique fund manager part owned by NAB's nabInvest distribution arm has announced the business will close as of 30 June.
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2 Apr 2012 - Lodestar Capital Partners to close at the end of June 2012
By: Australian Fund Monitors
Sydney-based specialist Australian investment manager, Lodestar Capital Partners Pty Limited, (Lodestar) has announced that the company’s founders and principals have made the decision to close the business effective 30 June 2012.
The Lodestar Australian Strategic Shares Fund was established in March 2007 and since that time has returned an annualised -0.32%. The fund had a disappointing 2008/9 when it suffered a drawdown of -27.71% and in spite of returning 28.85% in 2009 as of February 2012 performance remained 11.53% below the high water mark reached in August 2008.
In June 2007, Lodestar announced an alliance with the National Australia Bank Limited for the distribution of Lodestar’s funds, and in September 2009 nabInvest acquired a 33% stake in Lodestar.
BT to close Total Return Fund
30 Mar 2012 - Australian Fund Monitors
BT calls it a day for its Total Return Fund of Fund and advises underlying managers of redemptions.
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30 Mar 2012 - BT to close Total Return Fund
By: Australian Fund Monitors
BT Investment Management is closing its Total Return Fund after operating for over 10 years.
The Total Return fund was a multi-manager Fund of Fund which invested across a range of strategies including Equity long/short and Market Neutral, and various arbitrage strategies including Convertible Bond, Merger and Fixed Income.
FUM in the fund, which commenced on September 2000, stood at $225 million as at the end of February 2012. The Fund weathered the GFC well with a maximum drawdown of 10% against the ASX which fell over 50% during the same period.
The Fund was a strong and longstanding supporter of local hedge funds. No announcement has been made on the date of closure or future allocations.
