20 Aug 2021 - Performance Report: Longlead Pan-Asian Absolute Return Fund By: Australian Fund Monitors
20 August 2021
Longlead Capital Partners
Longlead Pan-Asian Absolute Return Fund
Latest Return Date
Latest 6 Months
Latest 12 Months
Latest 24 Months (pa)
Annualised Since Inception
01 December 2020
The Fund will invest substantially all of its assets, to the extent not retained in cash or cash equivalents, in Class G Participating Shares of the Longlead Absolute Return Feeder Fund Ltd, an exempted company incorporated with limited liability in the Cayman Islands, which in turn invests substantially all of its assets in Longlead Absolute Return Master Fund Ltd, an exempted company incorporated with limited liability in the Cayman Islands, which predominantly deploys a long/short investment strategy based on fundamental, bottom up stock selection procedures and employs risk management techniques designed to manage portfolio risk.
The Longlead Pan-Asian Absolute Return Fund generated a net loss of -1.29% in July as concerns over the spread of the Delta COVID variant across the region and a Chinese government regulatory crackdown on companies in the technology, education and property services industries saw equity market sentiment turn sharply negative and many Pan-Asian markets sell off. With the focus of these events mainly on China and Hong Kong, the Fund's long positions in these geographies detracted from performance with the MSCI China Index falling 12% and the Hang Seng Index, 8% in the month. Despite this, the Fund's shorts and hedging positions in these same markets performed well to more than offset this impact resulting in China exposures overall navigating the volatility and being profitable for the Fund in July. However the risk-off sentiment extended to other markets with indirect China exposure such as Taiwan and Singapore, with longs in those markets generating a loss for the Fund.
In terms of sector performance, losses were posted in Health Care, Information Technology and Consumer Discretionary holdings, while gains were recorded in Materials and hedging positions.
Notwithstanding the recent regulatory driven volatility in Pan Asian markets centred on China, Longlead note that recent moves by the Chinese government signal a potential neutralisation of the monetary tightening headwinds and acceleration of fiscal spending as we approach the end of the year.