September, 2023
The Regal Long Short Australian Equity Fund decreased -0.2% in September compared to a decrease of -2.9% in the ASX 300 Accumulation Index.
Global equity markets experienced their weakest month of performance for the year in September, adding additional weight to September’s growing reputation as being a month for capital markets. Soaring bond yields, rising oil prices and a further slowing in global economic growth all combined to deliver a widespread sell-off in equity markets globally, with US equity benchmark indices proving the significant underperformer across both developed and emerging markets. The S&P 500 declined -4.9%, the Dow Jones contracted -3.5%, while the tech-heavy NASDAQ fell -5.8%, as investors sought to digest the impact of rapidly rising long bond rates on longer duration assets. Australian equities outperformed their US counterparts, with the ASX 200 falling -3.5%, and the ASX Small Ordinaries declining -4.0%.
By sector, Consumer Discretionary, Materials and Energy were positive contributors, while Health Care, Information Technology and Financials contributed negatively. The Fund’s short book proved a strong contributor to returns over the month, with positions held across the travel, packaging and information technology sectors delivering positive returns. An overweight position to Australian-listed Singaporean mobile service provider Tuas (+11%) also contributed positively to returns, following the release of a better-than-expected full year earnings update, alongside long positions in diversified industrial services and media business Seven Group Holdings (+11%) and Australian gold producer Red 5 Limited (+8%). Detractors to performance included overweight positions in location-based app provider Life360 (-11%) and sustainable waste technology business Calix (-27%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/205844703.pdfAugust, 2023
The Regal Long Short Australian Equity Fund decreased -0.4% in August compared to a decrease of -0.8% for the ASX 300 Accumulation Index.
Global equity markets were weaker through August, ending a five-month run of positive performances for most major developed global equity indices. Continued strength in US Treasury yields provided the greatest impediment to further stock gains over the month, as the global benchmark for risk-free rates, the US 10-Year Treasury yield, rose to its highest level since 2007. A rising bond yield environment has historically produced near-term headwinds for longer-duration assets and growth type equities, with the tech-heavy NASDAQ subsequently experiencing its largest monthly loss for 2023, declining -2.2%. Australian equities outperformed global peers, the ASX 200 declining -1.4% and ASX Small Ordinaries Index retreating -1.6%, as domestic investors digested a volatile semi-annual corporate reporting period, characterised by further evidence of rising domestic cost pressures, a weakening local consumer and rising interest expenses.
By sector, Information Technology, Utilities and Energy contributed positively, with key contributors including overweight positions in location-based app provider Life360 (+21%), following a strong company update and upgrade to earnings for CY2023, and an overweight position in gold assaying technology provider Chrysos Corporation (+27%), following the company reporting another strong quarter of growth and confirmation the business has exceeded its FY23 Prospectus targets for both revenue and EBITDA. Key detractors to performance this month included an overweight position in small business lender Judo Capital (-33%), following the company providing a weaker earnings update, and a long position in eye-focused biotech Opthea (-25%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/204660890.pdfJuly, 2023
The Regal Long Short Australian Equity Fund increased 1.2% in July compared to an increase of 2.9% for the ASX 300 Accumulation Index.
Global equity markets experienced another positive month of performances in July, as market participants embraced further indications that the US economy remains ontrack for a ‘soft landing’, while Asia-focused investors mulled the possibility of a pending Chinese government stimulus package. Key inflation data again edged lower across a number of larger developed economies in July, whilst US markets took additional comfort from noticeably upbeat commentary from the 2Q US corporate earnings season, where 80% of companies reporting in July beat actual EPS estimates. US equity indices continued their climb higher, with the S&P 500 rising 3.1% in July, recording its fifth consecutive month of positive performance and longest monthly winning streak in two years. Australian equities remained well supported, albeit again underperforming their global counterparts, with the ASX 200 rising +2.9%, while ASX Small Ordinaries increased +3.5%.
By sector, Financials, Communication Services, and Materials were the strongest contributors, while Consumer Discretionary, Industrials and Real Estate contributed negatively. Positive contributors included overweight positions in payments technology business Tyro Payments (+22%), Australian energy major Woodside Petroleum (+10%) and connectivity business Superloop (+15%).
While Materials were a positive overall contributor, an overweight position in bulk commodity producers Bowen Coking Coal (-31%) detracted from returns in July, following weaker spot commodity prices over the month. Other negative contributors included overweight positions in infrastructure maintenance services business Ventia Services Group (-4%), global equities asset manager Platinum Asset Management (-9%) and aged care operator Estia Health (-6%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-14.pdfMay, 2023
The Regal Long Short Australian Equity Fund decreased -1.9% in May compared to a decrease of -2.5% for the ASX 300 Accumulation Index.
Global equity markets delivered a mixed set of performances in May, as market participants navigated the opposing forces of global macroeconomic uncertainties and another month of scorching share price rallies in mega cap technology stocks. Australian equities were weaker through the month, as softening commodity prices weighed heavily on the listed resources and energy sectors, while weaker-than-anticipated economic data, a surprise 25-bps RBA rate hike and firmer CPI print impacted listed businesses with exposure to the domestic economic cycle. The ASX 200 declined -3.0%, with consumer discretionary, financials and materials leading declines, while small caps continued their period of underperformance versus large caps, with the ASX Small Ordinaries retracing -3.3%.
By sector, Information Technology, Industrials and Consumer Discretionary contributed positively, while Materials, Financials and Health Care detracted from returns. An overweight position in location-based app provider Life360 (+34%) was a pleasing contributor in May, with the company releasing a strong 1Q23 update, reaffirming their FY23 guidance for US$300-310m in sales and confirming the business is now comfortably profitable and on track to generate FY23 cashflow of US$5-10m. The Fund also benefited this month from positive share price moves from overweight positions in sales enablement software provider Bigtincan (+32%), infrastructure services business Ventia Services Group (+3%) and short positions in Australian discretionary retailers. Key detractors to performance included overweight positions within the resources and energy sectors, including East Coast bulk commodity producer Stanmore Coal (-15%) and African-focused gold producer Perseus Mining (-18%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-1-3.pdfMarch, 2023
The Regal Long Short Australian Equity Fund decreased -1.5% in March compared to a decrease of -0.2% for the ASX 300 Accumulation Index.
March was a tumultuous and volatile month for markets, characterised by large bond market swings, multiple bank collapses and a step-up in the M&A cycle. Monthly performances from major equity market indices (e.g., S&P 500 +3.5%, the NASDAQ +6.7% and the ASX200 -1.1%) largely belied the drama that unfolded during the month, with US bond yields staging their largest monthly decline since October 1987 in response to global banking worries and the collapse of both SVB Financial Group and Credit Suisse.
Amid the increased volatility, markets saw a flight to defensives with the gold price moving higher and large caps outperforming, while technology companies benefitted from lower bond yields.
Key positive contributors included long positions in Neuren Pharmaceuticals (+84%) on FDA approval for the company’s Daybue treatment for Rett Syndrome, and infrastructure service provider Ventia Services (+11%) as a result of ongoing positive momentum after recently delivering a strong result and the clearing of pre-IPO sellers after lock-up expiry.
The key detractors to performance included weaker performance in some key overweight small caps (albeit on limited news flow) as well as some short positions in mining stocks involved in decarbonisation
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-12.pdfDecember, 2023
The Regal Long Short Australian Equity Fund increased +5.6% in January, compared to an increase of +6.3% for the ASX 300 Accumulation Index.
January delivered a positive start to CY23, with strong gains delivered across the bulk of the global asset classes. Equity markets experienced one of their best starts to the year in decades, the S&P 500 rising +6.2%, the NASDAQ Composite increasing +10.7% and the ASX200 +6.2%. MSCI China delivered its best start to a calendar year ever, rising +12.2%, while small caps started the year in similar fashion, likely with further to go should markets remain buoyant. Small caps globally are now trading at one of the highest relative discounts in Australia and USA historically (over 35%, vs flat through cycle), rivalling valuations not seen since the GFC and tech wreck.
The Fund’s current overweight to the Energy and Materials sector contributed significantly to returns this month, with positive contributors coming from long positions in BHP (+8%), East Coast bulk commodity producer Stanmore Resources (+16%) and gold assaying technology business Chrysos (+42%). Another long position that contributed to returns this month was retailer Cettire (+50%) after higher beta/ e-commerce names saw a sharp rebound in January. The Fund’s main detractors this month stemmed from short positions in a number of technology, healthcare and consumer discretionary names.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-11.pdfSeptember, 2022
The Regal Long Short Australian Equity Fund returned -3.2% in September, compared to a decrease of -6.3% for the ASX 300 Accumulation Index.
The month of September has developed a reputation for delivering challenging periods for global equity markets, with September 2022 adding further weight to the claim. Continued fears surrounding the rise in global inflation, alongside increasingly hawkish commentary from the US Federal Reserve, saw US equity markets experience their worst September performance since 2008, with the S&P 500 declining -9.3% and the tech-heavy NASDAQ contracting -10.5%. While still weaker in an absolute sense, Australian equities outperformed the bulk of developed market peers, the ASX 200 declining -7.3%, taking CYTD returns to -13.0%
Although a negative absolute return for the month of September, positive alpha was delivered across both the long book and the short book. A continued overweight within the Fund to the Resources sector has been a strong source of alpha in recent months and this continued in September
Key contributors to returns included a long position in Terracom (+13%) alongside short positions in select lithium producers, coupled by a range of short positions across the consumer discretionary sector.
Key detractors included an overweight position in registry business Link Administration Holdings (-32%) and in sales enablement software provider Bigtincan (-23%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-10.pdfAugust, 2022
The Regal Long Short Australian Equity Fund returned 8.9% in August, compared to an increase of 1.2% for the ASX 300 Accumulation Index. Despite initially reaching a four-month high mid-August, global equity markets retraced a large proportion of their recent gains as investors again considered the prospect of further interest rate hikes from the US Federal Reserve and the impact of a continued tightening in monetary conditions on broader economic growth. Australian equities were not immune to the broader market sell-off, however were somewhat insulated by another month of well-supported global commodity prices and a better-than-expected FY22 corporate results season that provided little evidence of any material weakening in underlying demand. The ASX 200 concluded the month +0.6%, while the ASX Small Ordinaries Index also increased +0.6%
By sector, Materials, Energy and Information Technology were the largest contributors to returns, while the Utilities, Health Care and Consumer Discretionary sectors produced flat returns. A continued overweight within the portfolio to commodity producers produced strong results in August, with overweights to tier one copper-gold producer OZ Minerals (+37%), graphite producer Syrah Resources (+27%) and East Coast coal producer Terracom (+23%) all contributing positively to returns. Strong earnings updates from overweight positions in Qualitas (+49%), Viva Energy (+12%) and mining equipment rental business Emeco (+24%) also contributed well, while overweight positions in assay technology business Chrysos (-19%), eye-focused drug developer Opthea (-11%) and sales enablement software provider Bigtincan (-10%) detracted from returns.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-9.pdfJuly, 2022
The Regal Long Short Australian Equity Fund returned 5.7% in July, compared to an increase of 6.0% for the ASX 300 Accumulation Index. After a difficult June, the majority of spot commodity markets stabilised in July, as investors digested commentary from a number of major global miners that reiterated excessively tight supply constraints across a variety of base and bulk minerals, alongside an improving outlook for broader global economic growth. While underperforming global counterparts, Australian equities posted positive months of performance, the ASX 200 rising 5.7% and the ASX Small Ordinaries increasing 11.4%.
By sector, Financials, Information Technology and Industrials were the largest contributors to returns, while Healthcare, Consumer Staples and Consumer Discretionary detracted from returns. A swift recovery in investor sentiment in July drove strong outperformance in a number of small and mid-cap positions within the Fund, particularly across companies that had experienced declines through the previous month on little news flow. This included an overweight position in sales enablement software business Bigtincan (+55%), after the company reported a pleasing quarterly update, alongside overweight positions in location-based app provider Life360 (+59%) and enterprise software provider FINEOS Corporation (+36%). A strong rebound in resource equities in July contributed positively to returns, including positive contributions from overweight positions in copper-gold producer OZ Minerals (+6%), graphite producer Syrah Resources (+19%) and gold explorer Tietto Minerals (+55%). Key detractors were focused in the short portfolio, including short positions in bulk miners and emerging life sciences businesses.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-1-2.pdfJune, 2022
The Regal Long Short Australian Equity Fund returned -12.6% in June, compared to a decrease of -9.0% for the ASX 300 Accumulation Index. Global equity markets sold off heavily in June, as rising inflation pressures, aggressive interest rate hikes and increasing recession fears weighed heavily on global investor sentiment. After leading asset returns for the 2022 calendar year, a number of key spot commodity markets experienced a reversal in price momentum in June, with sharp declines experienced in copper (-11.1%), nickel (-16.2%) and Brent crude oil (-7.8%). Australian equities underperformed global peers in June, with the ASX 200 Accumulation Index declining -8.9% for the month while the Small Ordinaries Accumulation Index declined -13.1%. Unsurprisingly, mining and energy equities led declines, with the ASX 200 Resources Index falling -10.6%, while the ASX Small Resources Index retreated -22.1%.
By sector, Materials, Financials and Industrials were the largest detractors to performance this month, while the Diversified, Real Estate and Consumer Discretionary sectors produced positive returns. While a continued overweight within the Fund to the Resources sector has been a strong source of alpha in recent months, the sector was a net detractor to returns in June following significant price reversals in spot commodity markets through the month, in addition to an intra-month decision from the QLD State Government to introduce a heightened tax royalty regime on operators within the region. Given weaker underlying equity markets, the Fund’s short book was the largest positive contributor to returns, driven by short positions across mining developers, early stage life science businesses and the building and construction sector.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-8.pdfMay, 2022
The Regal Long Short Australian Equity Fund decreased -3.1% in May, underperforming the ASX 300 Accumulation Index by -0.4%. Since inception in March 2011, the Fund has generated 12.3% p.a. net of fees. 1 Global equity markets experienced another month of volatility through May as a variety of concerns surrounding rising inflation, increasing interest rates and COVID- related lockdowns in China continued to heighten fears of a potential global recession in 2023. On the domestic front, local investors also grappled with a broad-based sell-off across commodity markets, the first RBA interest rate hike since 2010 and a Federal election. While US equity markets recovered later in the month to finish May largely unchanged, Australian equities lagged their global counterparts, the ASX 200 finishing the month -3.0%.
Energy, Health Care and Consumer Discretionary were the largest positive contributors to Fund performance this month, while Industrials, Information Technology and Communication Services were laggards. Given weaker underlying equity markets, the Fund’s short book was a strong contributor to returns this month, with positive attribution coming from short positions within the building and construction, consumer discretionary and travel services sectors. Whilst continuing to remain positive on the outlook for the broader commodity complex and overweight the resources sector, the Fund also benefitted this month from a small number of short positions in resource developers where valuations had arguably grown extended relative to the underlying asset and/or duration to first cash flow. On the long side, the Fund benefitted this month from an overweight exposure to the Energy sector, alongside an overweight in eye-focused life sciences company Opthea (+32%), following the presentation of encouraging data for the company's OPT-302 combination therapy for patients with PCV lesions.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-7.pdfApril, 2022
The Regal Long Short Australian Equity Fund increased 1.8% in April, outperforming the ASX 300 Accumulation Index by 2.6%. Since inception in March 2011, the Fund has generated 12.7% p.a. net of fees1 . Australian equities outperformed global peers, the ASX 200 declining -0.9%, buffered by larger weightings across the large cap index toward the resources, consumer staple and financial sectors. In a similar vein to the US experience, higher growth technology businesses and companies with longer durations to first cashflows led declines, the ASX 200 Technology Index falling -10.4%. By sector, Energy, Health Care and Consumer Staples generated the largest contributions to returns this month, while Consumer Discretionary, Information Technology and
Real Estate were laggards. From a positioning standpoint, a continued overweight in the Fund to the Resources sector has continued to generate positive outcomes for performance, while shorts/underweights toward profitless technology businesses has also added positive alpha. An overweight position in private hospital operator Ramsay Health Care (+24%) generated strong alpha this month, following the receipt of a private equitybacked takeover offer, alongside positive contributions from overweight positions in industrial construction and maintenance business Ventia Services Group (+16%), environmental technology business Calix (+18%), bulk grain and logistics handler Graincorp (+22%) and short positions in the IT and consumer discretionary sectors.
Key detractors to performance this month included underweight positions in the larger diversified miners (the Fund seeks to gain its resources exposure through more direct exposures) and overweight positions in a number of higher conviction technology businesses that continue to be impacted by the broader de-rate in the technology sector
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-6.pdfMarch, 2022
The Regal Long Short Australian Equity Fund increased +8.4% in March, outperforming the ASX 300 Accumulation Index by 1.5%. Since inception in March 2011, the Fund has generated 12.6% p.a. net of fees1. Global equity markets stabilised in March, as heightened concerns surrounding rising global inflation data and the shock invasion of Ukraine were replaced with a more sanguine view of the Federal Reserve's efforts to contain inflation and cautious optimism that the Russian-Ukrainian conflict would not escalate into a broader regional crisis. The S&P 500 rose +3.7%, the MSCI World rose +2.5% and the NASDAQ rose +3.5%, having now rallied +11% from the beginning of the Ukrainian invasion. While equities delivered strong returns, commodity markets were the standout in March, driven by continued long-term supply deficits and steadily improving economic growth. WTI oil rose +4.8%, copper +4.5% and wheat +7.9%. The ASX 200 outperformed global peers to rise +6.4% while the AUD/USD rose 3.5%.
Not all areas of global equities were well supported, however, with Asian markets continuing to struggle with the impact of increasing COVID lockdowns and ongoing supply chain difficulties. By sector, Materials, Energy and Financials proved the largest contributors to returns this month, with strong contributions coming from overweight positions in Quebec-based iron ore producer Champion Iron (+21%), graphite producer Syrah Resources (+15%) and major bank NAB (+12%).
The Fund has rotated exposure in recent months away from longer-duration and higher-growth businesses and into more cyclically-driven companies, the Fund benefitting this month from overweight positions in infrastructure services provider Ventia Services Group (+8%), agribusiness services provider Elders (+15%) and logistics business Qube Holdings (+6%). Detractors to performance were weighted to the short book, including positions in the buy now, pay later sector, travel services and consumer discretionary.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-5.pdfFebruary, 2022
The Regal Long Short Australian Equity Fund increased 0.6% in February, underperforming the ASX 300 Accumulation Index by -1.4%. Since inception in March 2011, the Fund has generated 11.9% p.a. net of fees.1 Australian equities outperformed global peers, the ASX 300 rising +2.1%, supported by a broadly positive domestic reporting season and higher exposure within the larger-cap index toward later-cycle industry sectors such as retail banks, supermarkets, and resources.
Commodities recorded strong gains over the month, with spot markets responding quickly to expected supply deficits occurring as a result of the Ukrainian conflict. Brent crude futures rose +10.7%, US wheat futures climbed +22%, while seaborne thermal coal leaving Port of Newcastle increased +23% to U$275/metric ton. Gold and silver both ended the month in positive territory, as investors sought the safe haven of precious metals, while US 10-year yields increased 5bps to +1.8%.
Global equity markets will likely remain constrained by ongoing volatility in bond markets and the expected path for interest rates as the global economy continues its post-COVID recovery. While successful global vaccine initiatives and highly supportive monetary and fiscal policy settings continue to provide a favorable backdrop for equities, the invasion of Ukraine, and impacts from economic sanctions leveled on Russia will create significant uncertainty across financial markets in the near term.
Geopolitical tensions aside, equities remain relatively attractive compared to bonds, however, equity returns going forward are likely to be driven less by upward re-ratings in valuation multiples and more by genuine earnings growth. A rising bond yield environment typically creates valuation headwinds for higher growth and longer-duration equities and a reduction in exposure to loss-making higher-growth technology companies has been prudent.
Global supply chain constraints and a rapidly recovering global economy has provided a supportive environment for the commodity complex over recent months, while the prospect of continued sanctions against Russia has further tightened supply-demand equations. Mining and resource-focused equities continue to look attractive as a result, with overweights currently held across bulk material, energy, battery feedstocks, and precious metals producers.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-4.pdfJanuary, 2022
The Regal Long Short Australian Equity Fund decreased 7.2% in January, underperforming the ASX 300 Accumulation Index by 0.7%. Since inception in March 2011, the Fund has generated 11.9% p.a. net of fees.
Australian equities underperformed global developed markets, despite the large cap benchmark index being broadly underweight higher-growth technology companies and overweight potential beneficiaries of a rising inflationary environment. The ASX 300 Accumulation Index fell -6.5%, albeit still producing the fourth-worst start to a calendar year since 1960, with ~80% of Australian stocks now sitting in correction territory from their 52-week highs. Growth-heavy Australian small caps shared a similar experience to their global counterparts, with the ASX Small Ordinaries Index falling -9.0%, while the commodity complex remained broadly well supported, led by gains across crude oil (+15%), iron ore (+16%) and aluminium (+11%).
Key sectors that detracted from returns this month included Information Technology, Consumer Staples and Financials, in-line with broader moves across the index. The Fund’s short book generated the largest positive contribution to returns this month, with short positions across the healthcare, discretionary retail and financial services sectors delivering positive returns. On the long side, overweight positions in diversified miner BHP Group (+12%) and Quebec-based iron ore miner Champion Iron (+19%) contributed positively, while overweight positions in boron nitride nanotube developer PPK Group (-23%), location-based app provider Life360 (-16%) and sales enablement software provider Bigtincan (-11%) detracted from returns.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-3.pdfDecember, 2021
The Regal Long Short Australian Equity Fund increased 3.4% in December, outperforming the ASX 300 Accumulation Index by 0.8%. Since inception in March 2011, the Fund has generated 12.8% p.a. net of fees.1
Global equity markets will likely remain constrained by ongoing volatility in global bond markets in the near-term. Regal’s view is widespread global vaccine initiatives, supportive fiscal stimulus packages and accommodative monetary policy settings continue to set a favourable backdrop for the prospects of increasing economic growth, albeit with a now heightened risk of future inflation and the end of a prolonged bull market in bonds. A rising bond yield environment creates valuation headwinds for higher growth and longer-duration equities, particularly following periods where growth assets have attracted excessive valuations and yields rise aggressively in a short period. Regal’s view is given the improving economic outlook, equities as a broader asset class will continue to remain well supported, however equity returns will be driven less by valuation multiple re-ratings and more by genuine earnings growth. We continue to favour long positions in companies demonstrating an ability to grow earnings regardless of the underlying cycle, alongside a continued overweight to the resources sector, which we believe is well placed to benefit from the recovery in global economic activity. Regal believes increased volatility and stock dispersion will provide multiple opportunities for active managers of capital and fundamental stock picker
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-2.pdfNovember, 2021
The Regal Long Short Australian Equity Fund increased 1.9% in November, outperforming the ASX 300 Accumulation Index by 2.4%. Since inception in March 2011, the Fund has generated 12.5% p.a. net of fees.1 The Australian equity market recorded its third consecutive month of declines, with the ASX 200 falling -0.9%. Materials proved the top performing sector for the month, led by a recovery in the share prices of a number of larger cap bulk miners that had been impacted by the 41% fall in the iron ore price for the calendar year to date, alongside another strong month for companies leveraged to the electric vehicle battery thematic. Energy was the worst performing sector, following a -21% decline in the crude oil market, while Financials notably also underperformed, led by falls in the index-heavy Westpac (-18%) and Commonwealth Bank (-11%).
Top contributing sectors to performance this month included Materials, Information Technology and REITs, with the portfolio generating positive returns from both long and short books this month. An overweight position to WA-based junior miner Chalice Mining (+49%) proved a strong contributor to returns, following the company releasing a significant Tier 1 maiden resource at the Julimar project, alongside overweights to battery materials developer Novonix (+61%), junior gold explorer De Grey Mining (+8%) and WA-based copper-gold producer Sandfire Resources (+8%). Detractors to performance included overweight positions in Platinum Asset Management (-11%), sales enablement software provider Bigtincan (-9%) and a short position in a bulk miner.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-1-1.pdfSeptember, 2021
The Regal Long Short Australian Equity Fund decreased -1.8% in September, outperforming the ASX 300 Accumulation Index by 0.1%. Since inception in March 2011, the Fund has generated 12.4% p.a. net of fees.1
The Fund performed largely in line with the underlying benchmark this month, with top contributing sectors to performance coming from Financials, Energy and Communication Services, while Materials and Consumer Discretionary led declines. A continued overweight within the Fund to the Resources sector impacted returns this month, led primarily by overweights to boron nitride nanotube developer PPK Group (-22%), which declined after a number of months of very strong performance, alongside overweight positions in Bluescope Steel (-19%) and WA-based explorer Chalice Mining (-9%). The Fund did benefit, however, from a number of other positions in the sector, including overweight positions in Nevada-based lithium developer Ioneer (+15%), met coal producer Coronado Global Resources (+16%) and graphite developer Novonix (+47%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS-1.pdfNovember, 2020
The Regal Long Short Australian Equity Fund increased 5.0% in November, compared to a 10.2% increase in the ASX 300 Accumulation Index, representing relative underperformance of 5.2%. Since inception in March 2011, the Fund has generated 11.7% p.a. net of fees.
November 2020 delivered the largest one-month gain in the Australian equity market since March 1988, driven by the announcement of three COVID-19 vaccine candidates and increased certainty regarding the US presidential election outcome. Further fuelling investor sentiment domestically, the Reserve Bank of Australia announced a reduction in the cash rate target to 10 basis points (from 25 basis points) and announced its intention to buy $100bn of government bonds over the next six months. Global markets were equally strong, with the S&P 500 index rising 11%, the tech-heavy NASDAQ increasing 12% while the Russell 2000 index grew 18%, reflecting particular strength across the smaller capitalised stocks within the US market.
Key positive contributors to Fund performance this month included a continued overweight exposure to the materials, metals and mining space. Junior exploration and production company Chalice Gold Mines (+50%) rallied strongly, following continued success at its Julimar project in Western Australia. Low cost nickel pig iron producer Nickel Mines (+21%) rallied on the back of strength in global nickel prices, while Coronado Global Resources (+41%) found support following a bottoming in metallurgical coal prices and a reversal of share price weakness the previous month.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LatestMonthlyNewsletterRALS.pdfSeptember, 2020
The Regal Long Short Australian Equity Fund rose 0.7% in September, compared to a -3.6% decrease in the ASX 300 Accumulation Index, representing relative outperformance of 4.3%. Since inception in March 2011, the Fund has generated 11.5% p.a. net of fees.
Despite a challenging market environment, the Fund delivered a positive absolute return this month, with contributors to fund performance well spread across the Materials, Financials, Technology and Healthcare sectors. A long position in coking coal producer Coronado Global Resources (+54%) was a positive contributor, on the back of stronger global coking coal prices and the company’s recent capital raising in August essentially removing balance sheet risk and broadening the company’s share register. Despite a softer gold price over the month, gold explorer De Grey Mining (+6%) continued its strong performance from previous months after releasing further positive exploration results from its significant Hemi Discovery in Western Australia. A long position in eye-disease focused biopharmaceutical company Opthea (+9%) also benefitted fund performance, the stock rallying in response to the announced appointment of a highly regarded biotechnology industry figure to the Board, ahead of the company filing its registration statement for a proposed listing in the US.
A key detractor was a long position in antimicrobial manufacturer Zoono Group (-24%), the share price experiencing some profit-taking following a threefold increase over the last 12 months.
File:ticker: AMR0006AU
commentary_block: Array
factsheet_url:
Quick Links -> Latest Monthly Newsletter
https://investmentcentre.moneymanagement.com.au/factsheets/mi/037w/regal-long-short-australian-equity
release_schedule:
fund_features:
The Regal Long Short Australian Equity Fund aims to outperform the S&P/ASX 300 accumulation index net of fees over a rolling five-year basis. The fund aims to have a tracking error of 4 – 8%.
- Aims to outperform the S&P/ASX 300 Accumulation Index net of fees over a rolling five year period
- Focus on long/short investments in listed equities in Australia
- May also use derivatives such as index futures to hedge portfolio risk and enhance returns.
The Manager selects stocks for the Underlying Fund primarily using a Four Step Stock Selection Process. To value shares, companies are researched from a fundamental perspective to derive their intrinsic value. The Manager incorporates key insights from different styles of investing (e.g. fundamental, market driven, technical) to determine stock weightings
manager_contact_details: Array
asset_class: Domestic Equity
asset_category: Australian Long Short
peer_benchmark: Domestic Equity - Long Short Index
broad_market_index: ASX Index 200 Index
structure: Managed Fund