NEWS
5 Sep 2014 - Hedge Clippings
Hedge Clippings has endured a challenging (or should that be frustrating) week. As usual the first frustration came out of the ongoing two-step being danced in Canberra, where the government proudly announced it had delivered on at least one election promise, that of repealing the mining tax.
Of course it can only do anything at present with the approval of Clive Palmer and his PUP colleagues in the Senate, and in this case it seemed as if the trade off was the deferral for 7 years of any increase in the Superannuation Guarantee Levy or SGL. At the present time the SGL is 9.5% of every employees' wages or salary, and is levied as a tax on the employer, not the employee.
While there are plenty of arguments as to the rights and wrongs of the SGL and how it is levied, who should pay, and the cost of superannuation tax benefits to the federal budget, it is hard to argue about the logic of a system designed to cover the retirement benefits of all workers, given that one of the major expenditure items in the Federal budget is the cost of the aged pension.
It is also widely accepted by most (although possibly not the Federal Treasurer) that even after 40 years of the SGL at 9.5%, the retirement benefit for most employees will be insufficient to cover their income needs in retirement, particularly given ever extending life expectancies. Figures published in an article on news.com.au today indicate the average 50 year old male currently earning $79,700 can expect to receive an income of $27,600 when he turns 70 in 20 years' time.
Hardly enough one would have thought, and therefore any encouragement (whether it be using carrot or stick) should be applauded rather than the current government's policy of deferring or reducing even this meagre ration.
Maybe one of the reasons that Treasurer Hockey doesn't seem to think this is important is that the same article indicates that when he leaves Federal Parliament he will be in line for a pension of at least $270,000 a year.
Who says the age of entitlement is over? None other than the Treasurer of course!
The other challenge or frustration this week was altogether different, and altogether more enjoyable, having attended yet another Bob Dylan concert (my fifth or sixth from memory, but the ones I was at in the late 60's are for some strange reason rather vague). Bob is one of my favourite artists, sadly not one of the world's greatest communicators. Having said that, this was one of his best performances I had seen, with his rendition of his classic "Blowin' in the Wind" for his final number perfect for current times, just as it was way back in 1963.
Specific results received this week include the following PERFORMANCE UPDATES:
The Auscap Long Short Australian Equities Fund returned 2.95% during July and 43.54% for the prior twelve months with a volatility of 6.30%.
Returning 24.47% for the year ended July 2014, the Avenir Value Fund returned -1.12% during July.
Pengana Absolute Return Asia Pacific Australian Fund returned 1.18% during July and 8.03% for last 12 months with a volatility of 2.88%.
With a volatility of 8.95% the Nanuk Global Alpha Fund returned -1.26% in July and 17.01% for the prior 12 months.
The Supervised High Yield Fund returned 0.77% during July and 7.17% over the previous 12 months with a very low volatility of 0.72.
AFM are now accredited by the Financial Planning Association of Australia to issue CPD points for FUND REVIEWS.
This week's updated reviews include:
Aurora Fortitude Absolute Return Fund
Read the most recent Fund Review for any of our research clients, and then answer 5 straightforward questions, these are presented in multiple choice format. An 80% or more success score will provide 0.5 CPD points, with a certificate provided as proof of completion. There is no charge for this service.
Tuesday 9 September in Brisbane , from 12pm to 4.30pm - ARRIA is hosting a further round table discussion, providing a valuable opportunity to meet with like-minded advisers. Free to Financial Advisors.
Tuesday 16 September in Sydney AIMA Australia's Hedge Fund Forum - and event by the Industry for the industry featuring quality Australian and international speakers.
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 October in 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 October in 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 and in keeping with our musical theme... I imagine it would be surprising to be shopping for groceries and find yourself in what might appear to be a scene from an opera, or Shopera as some might say. Well, I thought it was from an opera, but it's not. If anyone else is interested, the history of the song is here.
Best wishes for a happy and healthy weekend,
Chris
CEO, AUSTRALIAN FUND MONITORS
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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.
5 Sep 2014 - Supervised High Yield Fund
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| Fund Overview | The fund will invest in all forms of marketable floating and fixed income debt securities, such as asset backed debt securities, residential mortgage backed securities, corporate debt, regional and sovereign debt securities, debt/equity hybrid securities, equities and currencies. All these investments will be either listed or traded in a market where prices can be independently verified. The fund may also invest in interest rate swaps, options over authorised investments and exchange traded futures contracts. All these will be either listed or traded in a market where they can be independently valued. |
| Manager Comments | The Fund's Annual Report is on the AFM website under the Profile. |
| More Information | » View detailed profile of this fund |
4 Sep 2014 - Nanuk Global Alpha Fund
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| Fund Overview | In 2013 Nanuk started to expand the focus of the fund away from just energy and include other industries related to the overarching theme of environmental sustainability, specifically water, waste, recycling, pollution control and agriculture. Nanuk is now investing across a universe in excess of 600 stocks and an aggregate market capitalisation over US$2 trillion. This was a logical move because, while the industries themselves are different, their characteristics and long term drivers are very similar. Nanuk has identified a large, diverse global universe of companies positively exposed to these shifts. Nanuk combines deep fundamental research into these companies with detailed analysis of technological development, policy direction and related economics within each of the relevant sectors to identify profitable trends and opportunities suitable for inclusion in the Fund. Nanuk's principal strategy is to invest, long and short, in securities that are mis-priced on an absolute or relative basis. The Fund aims to achieve long term capital appreciation while reducing volatility of returns and risk of capital loss through appropriate hedging and risk management strategies. |
| Manager Comments | At month-end the Fund was 54% long, 52% short for a gross exposure of 104% and net exposure of 2%. The Fund finished the month down 1.3%. Positive contributions from short positions in a number of expensive European and US stocks and long positions in fuel cell and solar inverter manufacturers were offset by losses on some of the Fund's LED solid state lighting and solar positions which continue to show high levels of volatility. Thus far 2014 has been a challenging year for the Fund, with a number of our key ideas failing to deliver positive returns despite our continued conviction in the underlying investment theses and evidence supporting them. |
| More Information | » View detailed profile of this fund |
3 Sep 2014 - Charity Regatta
2014 Financial and Media Markets Charity Regatta
Sydney - Friday 24 October 2014
The Hedge Fund Association, is pleased to be a supporting the ASX Thomson Reuters Charity Foundation 2014 Financial and Media Markets Charity Regatta, out of Middle Harbour Yacht Club, New South Wales. It will be a fantastic day, with lots of fun to be had by all. Full details of the Regatta can be found here.
The Foundation organises an annual charity sailing regatta. Up to 60 class one, two and three yachts are expected to take part. There is also a 150 person VIP spectator boat to follow the race with guests enjoying a superb lunch. A prize giving reception, BBQ and beach party is held at Middle Harbour Yacht Club after the race.
We would like to encourage yacht owners to donate the use of their yacht, with skipper and one or two experienced crew for the day. The Charity Foundation will source a ?sponsor and guest crew? for each yacht which will contribute towards the fundraising. Sponsors in cash and in kind are also needed for the BBQ, Sailing Shirts, Caps, BBQ, Beach Band, Drinks and Signage.
Program of the Day - 10am registration for 1pm race start
Enquiries regarding the Regatta can be directed to David Brocklehurst.
To enquire further about HFA membership please contact Adriana Kostov, Australian Regional Director, HFA
2014 Charity Regatta (pdf format)
3 Sep 2014 - Fund Review: Aurora Fortitude Absolute Return Fund July 2014
- The Aurora Fortitude Absolute Return Fund (AFARF) has a 8 year track record investing in ASX listed equities. A Market Neutral overlay is used across a multi strategy approach which allows for flexible asset allocation to maximise returns and minimise risk under a variety of market conditions and cycles.CIO John Corr has over 20 years financial market experience with a strong focus on risk.
- Significant use of low risk "long" derivatives and option overlays has provided positive returns with low volatility during periods of market dislocation. Risk statistics are impressive and shows the Funds risk philosophy; over 88% of monthly performances have been positive with no losing months in 2008, the Fund's largest drawdown is -2.09% and the Sharpe ratio 1.16.
- ASX listed Aurora Funds Limited was established on the merger of three existing fund management businesses, managing approx. $230m on behalf of more than 2,500 retail and wholesale investors.
Sean Webster
Research and Database Manager
Australian Fund Monitors
AFARF Fund Review July 2014 (pdf format)
2 Sep 2014 - Avenir Value Fund
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| Fund Overview | The Fund will invest in securities where Avenir believes the company is simply mis-priced and deeply undervalued and offers significant potential for revaluation. The Fund will also invest in companies that are subject to specific corporate events such as mergers, acquisitions, restructurings, recapitalisations, spin-offs, demergers, management change, distressed situations, and other sharply delineated corporate events. The Fund will also selectively invest in short positions in companies where Avenir believes the company is significantly overvalued or where the company's business model is broken or structurally challenged. |
| Manager Comments | The Sharpe and Sortino ratios were above ASX 200 Accum Index at 2.78 (1.61) and 7.42 (3.27) respectively, over the last year. Up and Down Capture ratios were 0.57 and -1.69 respectively. |
| More Information | » View detailed profile of this fund |
2 Sep 2014 - Auscap Long Short Australian Equities Fund
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| 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 | The had a Sharpe ratio of 5.46 (Index 1.61) and 100% positive months (Index 75%) over the last year with Up and Down Capture ratios of 1.51 and -1.00 over the same time. Average gross capital employed by the Fund was 149.8% long and 26.1% short. Average net exposure over the month was +123.7%. At the end of the month the Fund had 36 long positions and 5 short positions. The Manager's August Newsletter is entitled 'Is now a good time to buy equities?' and is available on the AFM website. |
| More Information | » View detailed profile of this fund |
1 Sep 2014 - Post-Retirement Australia 2014 Conference
POST- RETIREMENT AUSTRALIA 2014 CONFERENCE
21st-22nd October, 2014, Grace Hotel, Sydney
Comprehensive and timely 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 for Australia's rapidly growing retiree sector.
(A "must attend" event, in a time of government belt tightening, regulatory reform and persistent global economic and market volatility)
Over two jam packed days delegates will be privy to a comprehensive range of topics including the political, regulatory, economic and social landscape and factors shaping the future of the post-retirement sector to in-depth examination of the funds accumulation, transition and post-retirement phases, to innovative retirement product options and asset allocation, risk considerations, optimising tax efficiencies, improved advice and data administration developments.
THE CONFERENCE WILL COVER:
- Political and regulatory factors driving the financial future for Australian baby boomers as they migrate across into retirement
- What Australia can learn from the northern hemisphere's approach to the ageing population dilemma
- Accumulating wealth for Super members to maximise retirement funds - Trustee perspectives
- Transitioning into retirement - examines the big questions and decisions to be made to pave the way forward for a comfortable retirement
- Engaging default members for better financial outcomes in retirement
- The increasing importance of sound and reliable advice
- Insights, trends and developments in Super and retirement funds administration
- Innovative retirement products and de-cumulated funds allocation strategies
- Working through the technical and operational complexities of new product implementation
- What?s happening in the SMSF sector post retirement?
- Increasing tax efficiency for retirees
- Future outlook - what will be the ultimate measure of success for retiree sector income, satisfaction and security?
Dates: 21st-22nd October 2014
Time: 8:30am - 5:30pm
Location: Grace Hotel, Sydney
Event AGENDA and booking form can be found here.
iPARM Australia 2014 (pdf format)
1 Sep 2014 - Fund Review: Alpha Beta Asian Fund AFM Fund Review July 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 July 2014 (pdf format)
1 Sep 2014 - Pengana Absolute Return Asia Pacific Australian Fund
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| 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 | While M&A activity slowed during July, the Fund focused on other emerging themes in the Asian event space. State owned enterprise (SOE) reforms out of China are driving asset injections and recapitalizations which will present unique trading opportunities ahead. The recently concluded reverse takeover of Citic Pacific is an example of how such reforms are being pursued by Chinese authorities. Another key emerging theme is increased focus on the JPX 400 index which benchmarks Japanese companies on operating metrics like ROE. This is incentivising and driving corporate activity in Japanese companies who wish to improve governance standards and hence valuations. |
| More Information | » View detailed profile of this fund |
