Performance Report: Loftus Peak Global Disruption Fund

13 Dec 2019 - Australian Fund Monitors

The Loftus Peak Global Disruption Fund rose +7.63% in November, outperforming AFM's Global Equity Benchmark by 3.23% and taking annualised performance since inception in November 2016 to +22.58% versus the Benchmark's +16.53%.

13 Dec 2019 - Performance Report: Loftus Peak Global Disruption Fund

By: Australian Fund Monitors

Report Date	13 December 2019
Manager	Loftus Peak
Fund Name	Loftus Peak Global Disruption Fund
Strategy	Equity Long
Latest Return Date	November 2019
Latest Return	7.63%
Latest 6 Months	17.56%
Latest 12 Months	27.70%
Latest 24 Months (pa)	15.73%
Annualised Since Inception	22.58%
Inception Date	15 November 2016
FUM (millions)	AU$72.07
Fund Overview	The fund aims to deliver a return over the MSCI All Countries World Index (net dividends reinvested) in AUD over the medium to long term by bringing a disciplined investment process to listed global companies impacted by disruption. The investment process involves a combination of top-down analysis with fundamental bottom-up qualitative and quantitative research to derive a risk-adjusted discounted cash flow (DCF) valuation of companies in the target universe. The investment team will generally buy stocks from the pool of securities that are trading below Loftus Peaks' valuation and sell them when they are trading above Loftus Peak's valuation. The approach allows for both fundamental accounting information as well as market-oriented inputs to be factored into the portfolio construction process. Loftus Peak's model typically does not rely on leverage to deliver investment returns and specifically takes into account risk in the valuation process. Capital preservation can be managed by holding up to 50% cash. Index and currency options and futures may also be used to manage risk.
Manager Comments	The Loftus Peak Global Disruption Fund rose +7.63% in November, outperforming AFM's Global Equity Benchmark by 3.23% and taking annualised performance since inception in November 2016 to +22.58% versus the Benchmark's +16.53%. The Fund's up-capture ratio of 141.6% and Sortino ratio of 2.16 for performance since inception highlight the Fund's capacity to significantly outperform in rising markets whilst avoiding the market's downside volatility over the long-term. November was a very strong month for the Fund. Loftus Peak noted markets were encouraged by the toning down of the tit-for-tat rhetoric by the US administration which was focused on other pressing issues (impeachment), however most of the Fund's return came as key themes in which Loftus Peak have invested play out. Their decision to deploy cash in October on weakness in key names was rewarded. Top contributors included Alibaba, Apple, Alphabet, Netflix, Microsoft and Xilinx. There were no detractors for the month. The Australian dollar depreciated -1.8% over the month against the US dollar which meant the value of the Fund's US dollar positions increased. As at 30 November 2019, the Fund carried a foreign currency exposure of 97%. The Fund was 93% invested in 20 holdings with the balance in cash at month end.
More Information	Fund Profile Manager's Report

Better yields than bonds (with less risk than equities)

13 Dec 2019 - Richard Quin, Bentham Asset Management

Investors are facing a common challenge: falling cash rates make it hard to earn a real return above inflation. Record-low yields on asset classes like cash (term deposits) and traditional fixed interest (government bonds) provide little...

Performance Report: Bennelong Long Short Equity Fund

12 Dec 2019 - Australian Fund Monitors

The Bennelong Long Short Equity Fund rose +2.84% in November, taking annualised performance since inception in February 2002 to +15.47% p.a. with an annualised volatility of 12.39%.

12 Dec 2019 - Performance Report: Bennelong Long Short Equity Fund

By: Australian Fund Monitors

Report Date	12 December 2019
Manager	Bennelong Long Short Equity Management, a Bennelong boutique
Fund Name	Bennelong Long Short Equity Fund
Strategy	Equity Market Neutral
Latest Return Date	November 2019
Latest Return	2.84%
Latest 6 Months	20.96%
Latest 12 Months	14.87%
Latest 24 Months (pa)	8.95%
Annualised Since Inception	15.47%
Inception Date	01 January 2003
FUM (millions)	AU$387.6
Fund Overview	Bennelong Long Short Equity Management applies a qualitative stock selection process to construct a diversified portfolio of paired securities based on relative value. The Bennelong Long Short Equity Management strategy invests primarily in the S&P/ASX 100 and is dollar neutral at cost. In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. The Bennelong Market Neutral Fund, with same strategy and liquidity is available for retail investors as a Listed Investment Company (LIC) on the ASX.
Manager Comments	The Bennelong Long Short Equity Fund rose +2.84% in November, taking annualised performance since inception in February 2002 to +15.47% p.a. with an annualised volatility of 12.39%. By contrast, the ASX200 Accumulation Index has returned +8.52% p.a. with a similar level of volatility over the same period. The Fund's Sortino ratio of 1.53 vs the index's 0.50 and down-capture ratio of -179.73% highlight the Fund's capacity to avoid the market's downside over the long-term. In November, the number of positive and negative pairs was equal, however none of the negative pairs made a significant return. The dominant sector contribution was Industrials, with Healthcare a distant second. The Fund's top pair was ALS (ALQ) / Aurison (AZJ). ALS reported their September half results with the highest improved and above forecast margins in the Life Sciences division. The second best pair was Qantas (QAN) / Flight Centre (FLT), with Qantas disclosing bullish long-term financial targets in their investor day presentation. Third best was Macquarie (MQG) / Bendigo Bank (BEN) with Macquarie's September half result slightly ahead of estimates.
More Information	Fund Profile Manager's Report AFM Research Reports

Caltex Cruising on a Full Tank

12 Dec 2019 - Luke Cummings - Harvest Lane Asset Management

A brief look at Alimentation Couche-Tarde's non-binding, conditional takeover offer for Caltex Australia.

Three small caps to keep an eye on

11 Dec 2019 - Roger Montgomery, Montgomery Investment Management

There is no doubt that Australia's small companies market has the ability to generate significant wealth. This is because stockbrokers don't earn enough revenue from brokerage on small companies and therefore don't research them, leaving...

Performance Report: Paragon Australian Long Short Fund

11 Dec 2019 - Australian Fund Monitors

The Paragon Australian Long Short Fund has risen +17.13% over the past 12 months as returned +9.98% p.a. since inception in March 2013.

11 Dec 2019 - Performance Report: Paragon Australian Long Short Fund

By: Australian Fund Monitors

Report Date	11 December 2019
Manager	Paragon Funds Management
Fund Name	Paragon Australian Long Short Fund
Strategy	Equity Long/Short
Latest Return Date	November 2019
Latest Return	0.20%
Latest 6 Months	8.20%
Latest 12 Months	17.13%
Latest 24 Months (pa)	-10.27%
Annualised Since Inception	9.98%
Inception Date	28 February 2013
FUM (millions)	AU$36.1
Fund Overview	The Paragon Fund is a concentrated long/short Australian listed equities product that is fundamentally driven with a focus on the industrial and resource sectors. Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks. Conviction in bottom up analysis drives the investment case and ultimate position sizing: * Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case. * Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework. The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market.
Manager Comments	The Paragon Australian Long Short Fund has risen +17.13% over the past 12 months as returned +9.98% p.a. since inception in March 2013. By contrast, the ASX200 Accumulation Index has returned +9.12% p.a. since the fund began. The Fund's down-capture ratio of 42.2% indicates that, on average, the Fund has significantly outperformed during the months the market has fallen since inception. The Fund returned +0.2% in November. Positive contributors included Adriatic, Alacer Gold, Xero and PoistBet. These were offset by declines in Agrimin, Atrum and Alkane. The Fund ended the month with 26 long positions and 6 short position. Paragon discuss their views on Adriatic Metals (ADT) in depth in their latest monthly report. Adriatic Metals is one of the Fund's key long positions. Paragon noted ADT released an outstanding scoping study for its high-grade polymetallic Vares project during the month. They believe that, despite the stock breaking all-time highs, there remains considerable upside.
More Information	Fund Profile Manager's Report

Japan, rugby and a city apart

11 Dec 2019 - Pete Morrissey - APN Property Group

Travelling to Japan is always something to savour. The people, culture, food and experiences are wonderful. And the opportunity to be there during the final stages of the rugby world cup was even better. My most recent trip...

Two Steps Forward, One Back in Japan

10 Dec 2019 - Delft Partners Global Investment Management

Kevin Smith takes a look at foreign participation in the Japanese equity market and likely impact of the proposal amendments to disclosure rules.

Performance Report: Gyrostat Absolute Return Income Equity Fund

10 Dec 2019 - Australian Fund Monitors

The Gyrostat Absolute Return Income Fund has risen +6.37% over the past 12 months and returned +4.35% p.a. with an annualised volatility if 3.76% since inception in December 2010.

10 Dec 2019 - Performance Report: Gyrostat Absolute Return Income Equity Fund

By: Australian Fund Monitors

Report Date	10 December 2019
Manager	Gyrostat Capital Management
Fund Name	Gyrostat Absolute Return Income Equity Fund
Strategy	Equity Income
Latest Return Date	November 2019
Latest Return	-0.76%
Latest 6 Months	1.08%
Latest 12 Months	6.37%
Latest 24 Months (pa)	5.06%
Annualised Since Inception	4.35%
Inception Date	10 December 2010
FUM (millions)	AU$12
Fund Overview	Gyrostat's absolute return income equity fund is designed to combine protection, returns and regular income through all stages of the investment cycle (including large market falls). The investment objective is to deliver regular and stable income stream (from ASX20 dividends) in a low interest rate environment with capital security - an 'alternative - defensive' asset class. Gyrostat has for 34 consecutive quarters operated within a 'hard' defined risk parameter (no more than 3% capital at risk with our maximum draw-down 2.2% in any circumstances) always in place, delivered regular income at a minimum BBSW90 + 3% by passing through ASX-20 dividends, and met returns guidance based upon market conditions (demonstrating increasing returns with market volatility). The fund buys and holds ASX-20 shares with lowest cost protection always in place with upside. It is an 'alternative - defensive' conservative asset allocation. Advances in investment risk management enable cost-effective protection to always be in place for a 'hard' defined risk parameter (say no more than 3% capital at risk). Returns are designed to increase as volatility levels increase, as this provides more opportunities to lower protection costs. Investment Objectives: - Returns: 6% - 8% pa in trending markets, greater than 8% pa in volatile markets, BBSW90 + 3% in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.2% p.a.) from dividends and franking credits - Protection: No quarterly NAV draw-downs exceeding 3% Also includes a 'tail hedge' for gains on large market falls
Manager Comments	The Gyrostat Absolute Return Income Fund has risen +6.37% over the past 12 months and returned +4.35% p.a. with an annualised volatility if 3.76% since inception in December 2010. Gyrostat noted market volatility was low with returns as per guidance in November. The Fund ended the month down -0.76%. The Fund is a solution for falling interest rates. It has a 'conservative' asset allocation and has for 35 consecutive quarters since inception operated with a 'hard' defined risk parameter (no quarterly NAV drawdowns exceeding 3%), delivered regular equity income (by passing through ASX20 dividends), and has provided superior returns during periods of heightened market volatility due to the Fund's tail hedge on large gains for large market falls. Gyrostat noted they anticipate increasing levels of 'late cycle' market volatility with geopolitical tensions elevated, historically high debt levels and elevated valuations.
More Information	Fund Profile Manager's Report

Brexit From a European Viewpoint

10 Dec 2019 - Marcel von Pfyffer, Arminius Capital

In the wake of the GFC, and again after the June 2016 Brexit referendum, many fund managers left the City of London for European shores, in search of lower tax rates and less regulation, not to mention the fear that Brexit would cut them...

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13 Dec 2019 - Performance Report: Loftus Peak Global Disruption Fund

13 Dec 2019 - Better yields than bonds (with less risk than equities)

12 Dec 2019 - Performance Report: Bennelong Long Short Equity Fund

12 Dec 2019 - Caltex Cruising on a Full Tank

11 Dec 2019 - Three small caps to keep an eye on

11 Dec 2019 - Performance Report: Paragon Australian Long Short Fund

11 Dec 2019 - Japan, rugby and a city apart

10 Dec 2019 - Two Steps Forward, One Back in Japan

10 Dec 2019 - Performance Report: Gyrostat Absolute Return Income Equity Fund

10 Dec 2019 - Brexit From a European Viewpoint

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