April, 2023
The Bennelong Kardinia Absolute Return Fund returned +3.26% in April, with the market up for the seventh consecutive month (S&P/ASX300 Accumulation Index +3.70%).
Key contributors and detractors for the month
Fenix Resources operates the small high grade Iron Ridge iron ore mine in Western Australia. It is a simple open pit operation with direct shipping ore transported 490km by road to the Geraldton Port. The company has offtake agreements with Sinosteel for 50% of production and Atlas Iron (a subsidiary of Hancock Prospecting) for the other 50%. The management team have done an excellent job navigating the permitting and native title processes to get the mine into operation and are now reaping the rewards of a very strong iron ore price.
Beach fell after announcing a larger than expected downgrade to the size of its western flank 2P reserves while a short position in Share Price Index Futures was the major contributor to the negative performance for the Short Book this month.
The best sectors for the month were Information Technology (+9.7%), Materials (+6.8%) and Industrials (+4.3%). Energy (-4.9%), Consumer Staples (-2.5%) and Utilities (-1.2%) lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/171992208-1.pdfFebruary, 2023
The Bennelong Kardinia Absolute Return Fund returned -3.91% in February, with the market also down (S&P/ASX300 Accum Index -2.55%) as signs of weakening earnings momentum came to the fore during the February profit reporting season. US and Asian markets were also weak (S&P500 -2.4%, MSCI Asia ex Japan -4.6%) although European markets posted positive returns (Euro Stoxx 50 +1.9%, FTSE 100 +1.8%).
The Reserve Bank of Australia increased the cash rate by 25bp to 3.35% while the US Fed raised the target range for the fed funds rate by 25bps to 4.5%-4.75%. Bond yields reversed last month's falls (US 10-year +43bp to 3.95%, Australian 10-year +30bp to 3.86%).
The key theme from the February profit reporting season was negative earnings revisions, with FY23 earnings growth cut by 0.7% to +6.6%. The cuts to earnings estimates were broad-based and outlook comments generally acknowledged that we are entering a tougher economic environment. The lack of earnings beats mirrored the experience from the US 4Q reporting season.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/197705638.pdfDecember, 2022
The Bennelong Kardinia Absolute Return Fund fell 3.10% in December, with the market also down (S&P/ASX300 Accum Index -3.29%). Global markets were also weak (S&P500 down 5.8%, Euro Stoxx 50 -4.3%, FTSE 100 -1.5%, MSCI Asia ex Japan -0.8%).
The market grew concerned that a pivot in monetary policy (from tightening to neutral) may take longer than expected after US 3Q GDP (+3.2% year on year) printed stronger than expected.
During the month, the Reserve Bank of Australia raised the cash rate target for the eighth month in a row (by 25bp to 3.10%). The total increase in rates over that period has been +300bp). The US Federal Reserve increased the federal funds rate by 50bp to 4.25%-4.50%.
The best sectors for the month were Materials (-0.9%), Utilities (-1.2%) and Consumer Staples (-1.8%), while Consumer Discretionary (-7.0%), Information Technology (down 5.4%) and Industrials (-4.9%) lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/195603176.pdfNovember, 2022
The Bennelong Kardinia Absolute Return Fund returned +2.50% in November, with the market also up strongly (S&P/ASX300 Accum Index +6.49%). Global markets rallied hard (MSCI Asia ex Japan +13.5%, Euro Stoxx 50 +9.7%, FTSE 100 +7.1%, S&P500 +5.6%).
The strength in the market over the past two months has been driven by favourable inflation data which suggests that a pivot in monetary policy (from tightening to neutral) is closer than previously anticipated. Australian headline CPI data for October was +6.9% year on year (below market expectations of +7.6%) while US CPI for October was +7.7% year on year (down from +8.2% in September).
During the month, the Reserve Bank of Australia raised the cash rate target for the seventh month in a row (by 25bp to 2.85%). The total increase in rates over that period has been +275bp). The US Federal Reserve increased the federal funds rate by 75bp to 3.75%-4.00% with Chairman Powell commenting that the time for moderating the pace of rate increases could come as soon as the December meeting.
It will be interesting to observe whether the recent trend of lower inflation continues such that it returns to target ranges (Australia 2-3%, US 2%) or whether inflation bottoms out at a higher level such that the market must readjust its assumption of a benign rate rise path from here.
The best sectors for the month were Utilities (+20.8%),
Materials (+16.3%) and Health Care (+6.0%), while
Communication Services (+2.1%), Financials (+2.5%) and
Energy (+2.7%) lagged.
October, 2022
The Bennelong Kardinia Absolute Return Fund returned +1.47% in October, with the market also up strongly (S&P/ASX300 Accum Index +5.96%). Global markets were also generally strong (Euro Stoxx 600 +9.1%, S&P500 +8.1%, FTSE 100 +3.0%, MSCI Asia ex Japan -5.7%).
The rebound from last month was driven by speculation of an impending pivot by the US Fed as economic data begins to weaken. During the month, the Reserve Bank of Australia surprised the market with a lower than expected 25bp increase in the cash rate target (to 2.60%). In dovish comments, the RBA noted that the cash rate had been increased substantially in a short period of time (50bp increases at each of the past four RBA meetings).
The best sectors for the month were Financials (+12.2%), REIT’s (+9.9%) and Energy (+9.5%), while Consumer Staples (-0.2%), Materials (-0.1%) and Health Care (+0.6%) lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/192596154.pdfSeptember, 2022
The Bennelong Kardinia Absolute Return Fund returned +2.30% in September, strongly outperforming the market which fell significantly (S&P/ASX300 Accum Index -6.29%). Global markets were also weak (MSCI Asia ex Japan -10.5%, S&P500 -9.2%, Euro Stoxx 600 -5.5%, FTSE 100 -5.2%).
The weakness was driven by a hawkish US Fed, which raised the US Fed Funds Rate by 75bp to 3.00-3.25% and global recession fears. The Reserve Bank of Australia increased the cash rate target by 50bp to 2.35%.
All sectors of the market were negative during September. The best sectors were Materials (-2.3%), Energy (-3.8%) and Health Care (-4.4%), while Utilities (-13.8%), REITs (-13.6%) and Information Technology (-10.6%) lagged.
Returns in September were dominated by our Short Book which added 349bp for the month. The top three short contributors were a global consumer discretionary stock, a global information technology stock and a global bank.
Resmed rose 5%, largely reversing last month’s fall. We believe the window is still very much open for Resmed to continue to take market share from Philips and lift prices with no clear signs that things are improving for Philips post a recent product recall.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/191655555.pdfAugust, 2022
The Bennelong Kardinia Absolute Return Fund returned +0.05% in August, while the market was also up (S&P/ASX300 Accumulation Index +1.18%). The Australian market outperformed global indices with the focus largely on the domestic profit reporting season, where more companies beat expectations than missed by a factor of 3:2. Margins are holding for now, with higher costs largely being passed on but labour shortages continue to be an issue.
Global markets were weak (Euro Stoxx 600 -5.1%, S&P500 down 4.1%, FTSE 100 -1.1%, MSCI Asia ex Japan +0.4%). This was driven by hawkish commentary from the US Fed at the annual Jackson Hole symposium. The Reserve Bank of Australia increased the cash rate by 50bp to 1.85%.
The best sectors for the month were Energy (+7.8%), Materials (+4.4%) and Communication Services (+2.5%), while REITs (-3.5%), Consumer Staples (-1.8%) and Utilities (down 1.6%) lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/190832623.pdfJuly, 2022
The Bennelong Kardinia Absolute Return Fund returned +1.15% in July, while the market rebounded from its -8.97% fall last month (S&P/ASX300 Accumulation Index +5.95%). During the month US CPI came in above expectations, hitting a 40 year high of 9.1% (year on year).
The US Fed raised the Fed Funds Rate by 75bp to a range of 2.25-2.50% while the Reserve Bank of Australia increased the cash rate by 50bp to 1.35%. Despite this, markets rallied due to a positive US reporting season and a 2Q US GDP decline of 0.9% which lowered expectations of the pace and extent of future rate rises.
Global markets also participated in the rally (S&P500 +9.2%, Euro Stoxx 600 +7.5%, FTSE 100 +3.7%, MSCI Asia ex Japan down 0.1%).
The best sectors for the month were Information Technology (+15.2%), REITs (+11.9%) and Financials (+9.3%), while Materials (-0.7%), Energy (+2.1%) and Utilities (+3.1%) lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/189986420.pdfJune, 2022
The Bennelong Kardinia Absolute Return Fund fell 0.55% in June, outperforming the market which fell heavily (S&P/ASX300 Accumulation Index -8.97%). The weakness was caused by persistently high inflation levels, aggressive central bank tightening and concern over a potential global recession. The Reserve Bank of Australia increased the cash rate by 50bp to 0.85%.
Global markets were also very weak (Euro Stoxx 600 -8.7%, S&P500 -8.3%, FTSE 100 -5.5%, MSCI Asia ex Japan -1.9%). The best sectors for the month were Consumer Staples (+0.2%), Energy (-0.3%) and Health Care (-3.1%), while Materials (-12.4%), Financials (-11.9%) and Information Technology (-11.0%) lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/189144183.pdfMay, 2022
The Bennelong Kardinia Absolute Return Fund fell 2.43% in May, while the market also fell (S&P/ASX300 Accumulation Index -2.76%). The Reserve Bank of Australia raised rates for the first time since 2010, increasing the cash rate by 25bp to 0.35%. According to Bloomberg, consensus expectations are for the cash rate to rise by 233bp to 2.68% by the end of this calendar year. With these increases likely to be passed straight through to home mortgage rates, we believe consumer discretionary spending will come under significant pressure, particularly as fixed rate mortgages roll off over the next 18 months
Global markets were mixed (Euro Stoxx 600 +1.3%, FTSE 100 +1.1%, S&P500 +0.2%, MSCI Asia ex Japan -2.8%). The best sectors for the month were Materials (+0.1%), Utilities (-0.2%) and Industrials (-0.5%), while REITs (-8.7%), Information Technology (-8.7%) and Consumer Staples (down 6.6%) lagged
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/187965129.pdfApril, 2022
The Bennelong Kardinia Absolute Return Fund fell 1.93% in April, while the market also fell (S&P/ASX300 Accumulation Index -0.84%). The market was weak due to the increasing likelihood that central banks would begin lifting interest rates at a rapid pace in the face of rising inflation and the risk of a material slowdown in global economic growth. In addition, the ongoing Russia/Ukraine war continues to impact the usual flow of trade with economic sanctions being imposed on Russia. China’s strict COVID lockdowns have also seen ongoing supply chain disruption. Global markets were weak (S&P500 -8.7%, MSCI Asia ex Japan down 3.5%, Euro Stoxx 600 -2.0%, FTSE 100 +0.8%). The best sectors for the month were Utilities (+9.3%), Industrials (+3.5%) and Consumer Staples (+3.3%), while Information Technology (-10.4%), Materials (-4.3%) and Consumer Discretionary (-3.1%) lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/187291653.pdfMarch, 2022
The Bennelong Kardinia Absolute Return Fund returned +1.17% in March, while the market had a very strong month (S&P/ASX300 Accum Index +6.90%). The market rallied on the back of peace talks between Russia and Ukraine, although nothing material has eventuated to date to end the conflict.
The best sectors for the month were Information Technology (+13.2%), Energy (+9.8%) and Materials (+8.9%), while REITs (+1.2%), Health Care (+2.5%) and Consumer Discretionary (+4.2%) lagged. Global markets were solid (S&P500 +3.7%, FTSE 100 +1.4% Euro Stoxx 600 -0.4%, MSCI Asia ex Japan -2.0%)
BHP rose 11% during the month driven by strong increases in the prices of the company’s key commodities (iron ore +12%, copper +4%, metallurgical coal +20%, nickel +32%). Ioneer is the owner of a lithium/borates project in Nevada USA which is currently working through the approval process to ultimately produce 22ktpa lithium carbonate and 175ktpa boric acid. The mine has a 60mt reserve with a mine life of 26 years. Late in the month it was speculated that the Biden administration would invoke its Cold War powers to encourage domestic production of critical minerals for electric-vehicle and other types of batteries. James Hardie fell 9% during the month due to concerns over how the US housing market would fare in an environment of rapid rate rises. At the US Federal Reserve’s March meeting, the “dot plot” suggests that the Fed is looking to raise the Fed Funds rate six more times this year. The company reported a strong 3Q profit result and upgraded FY22 and FY23 guidance in February.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/186139169.pdfFebruary, 2022
The Bennelong Kardinia Absolute Return Fund fell 1.72% in February, while the market rebounded (S&P/ASX300 Accum Index +2.09%). This was despite the Russian invasion of Ukraine and the spectre of rising interest rates on the horizon. The Fund underperformed due to a low net market exposure and stock specific holdings (discussed below). The Australian profit reporting season was a positive one, with results overall beating market expectations. Supply chain issues, elevated inventory and higher labour costs were consistent themes across the ASX300 universe.
We cut our net exposure further from 40.1% to flat in the face of increasingly worrying geo-political risks. The invasion of Ukraine and targeted sanctions being rapidly imposed upon Russia will have real implications on global credit and equity markets. During these times we believe it prudent to maintain a lower net in order to protect investors capital. Key changes being a significant reduction in our major bank holdings and an increase in the size of our short book, with several new shorts in lower quality high multiple technology stocks and a larger short in Share Price Index Futures. The largest exposures for the Fund continue to be the major banks, resources and offshore earners. Given rising inflation and rising bond yields, we have lower exposure to ratesensitive sectors, loss-making stocks and expensive lower quality technology companies. These stocks continue to form the bulk of our Short Book. We believe a potential tapering of quantitative easing by the US Federal Reserve and possible interest rate rises is the key issue for markets in calendar year 2022.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/184807931.pdfJanuary, 2022
The Bennelong Kardinia Absolute Return Fund fell 5.44% in January, with the market also falling heavily (S&P/ASX300 Accum Index -6.45%) as concerns grew over potential tighter monetary policy from central banks this year. Bond yields jumped during the month (US 10-year bond yield +26bp to 1.78% and Australian 10-year bond yield +22bp to 1.89%). Shares trading on high multiples (eg. technology sector), those with long-dated earnings and lossmaking stocks were most harshly dealt with. The best sectors for the month were Energy (+7.9%), Utilities (+2.6%) and Materials (+0.8%). Information Technology (-18.4%), Health Care (-12.1%) and Consumer Staples (-9.6%) lagged. Global markets were also weak (S&P500 -5.2%, Euro Stoxx 600 -2.7%, MSCI Asia ex Japan -2.7%, FTSE 100 +1.1%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/183913589.pdfDecember, 2021
The Bennelong Kardinia Absolute Return Fund returned +2.58% in December, with the market also rising (S&P/ASX300 Accum Index +2.65%) as concerns over the Omicron COVID-19 variant eased, with more studies suggesting Omicron was more contagious but causing milder symptoms. Optimism prevailed despite the rapid spread of Omicron across the country, with State and Federal Governments ruling out further lockdowns. Economic data reported during the month was better than expected (3Q real GDP -1.9% versus consensus -2.7%, unemployment 4.6% with 366k jobs created). Global markets were also strong (S&P500 +4.4%, Euro Stoxx 600 +5.4%, FTSE 100 +4.6%, MSCI Asia ex Japan +1.7%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/182558522.pdfNovember, 2021
The Bennelong Kardinia Absolute Return Fund fell 1.20% in November, with the market also falling (S&P/ASX300 Accum Index -0.53%). Global markets were also weak (S&P500 -0.7%, Euro Stoxx 50 -4.3%, MSCI Asia ex Japan -3.4%) following the emergence of the Omicron variant of the COVID-19 virus.
The best sectors for the month were Materials (+6.3%), Communication Services (+5.2%) and REITs (+4.5%). Energy (-8.3%), Financials (-6.9%) and Information Technology (down 2.9%) lagged. Our response to the emergence of Omicron has been cautious but measured. Our net exposure remains relatively high at 72.7%, but we have reduced the size of some of our larger positions with direct exposure to re-opening as we believe we could see a temporary pause in the outperformance of these stocks.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/181486719.pdfOctober, 2021
The Bennelong Kardinia Absolute Return Fund returned +0.79% in October, outperforming a modest rise in the market (S&P/ASX300 Accum Index +0.10%). Global markets were strong (S&P500 +7.0%, Euro Stoxx 50 +5.2%, MSCI Asia ex Japan +1.1%) following a strong US earnings season and a small rise in US 10-year bond yields (+8bp to 1.61%).
A range of companies across several different sectors led to the outperformance of the Kardinia Fund during the month. Hub 24 rose 9% during the month after announcing record first quarter platform net inflows of $3b (27% above consensus) and platform funds under administration of $45b (up 139% on pcp). The strong result opens the potential for FY23 funds under administration guidance to be upgraded. The company also announced the acquisition of Class, the market leading self-managed superannuation fund administration provider, for ~$385m in a scrip and cash scheme of arrangement
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/180637500.pdfSeptember, 2021
The Bennelong Kardinia Absolute Return Fund returned -5.88% in September, below the return of the market (S&P/ASX300 Accumulation Index -3.59%)
The Australian equity market fell for the first time since March with the S&P/ASX300 Accumulation Index down 3.59%. Most global markets also fell (S&P500 -3.8%, Euro Stoxx 50 -2.3%, MSCI Asia ex Japan -1.8%, FTSE 100 -1.5%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/158688870-1.pdfAugust, 2021
The Bennelong Kardinia Absolute Return Fund returned +2.35% in August, with the market up for the eleventh month in a row (S&P/ASX300 Accum Index +2.61%).
The Fund’s technology exposures were the strongest performers for the month, led by Afterpay which agreed to be acquired by Square in a $39b deal, the largest ever Australian M&A deal. The bid was pitched at ~30% premium to the prevailing price, with Square to initiate a secondary listing on the ASX. This wasn’t the only M&A deal for the month, with Oil Search and Santos agreeing to a $22b merger
The best sectors for the month were Information Technology (+17.0%), Consumer Staples (+6.9%) and Health Care (+6.8%). Materials (-7.3%), Energy (-3.9%) and Utilities (+1.0%) lagged
With COVID vaccinations accelerating across the country, we believe Australians can look forward to a happier 2022. We predict the 70% threshold for double vaccinations will be reached by the end of October, which will be around the same time as AGM season. Our view is CEOs will start to get more optimistic around this event. This is likely to continue the rotation towards coronavirus-impacted sectors.
The Kardinia portfolio is positioned for re-opening, with stocks that benefit from this comprising ~25% of the long book. We kept our net market exposure relatively steady during the month at 71.1% (75.5% long and 4.4% short). Key exposures are technology, offshore earners and re-openers
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/178706589.pdfJuly, 2021
The Bennelong Kardinia Absolute Return Fund returned +1.60% in July, with the market up for the tenth month in a row (S&P/ASX300 Accum Index +1.11%).
The Fund had a solid month driven by a rebound in the performance of some of our small cap positions. We remain positive on the outlook for these companies, with many having near-term catalysts. Three of the stocks we wrote about last month were in our top five contributors this month: Proteomics, Pilbara Minerals and NeoMetals.
Proteomics, which is commercialising its novel diabetic kidney disease test, ProMarkerD, made two significant announcements during the month.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/175700378.pdfMay, 2021
The Bennelong Kardinia Absolute Return Fund fell 2.64% in May, with the market up for the eighth month in a row (S&P/ASX300 Accum Index +2.31%).
The Fund was impacted by negative performances in some of our small cap positions. We remain positive on the outlook for these companies, with many having near-term catalysts.
Fenix Resources operates the small high grade Iron Ridge iron ore mine in Western Australia. It is a simple open pit operation with direct shipping ore transported 490km by road to the Geraldton Port. The company has offtake agreements with Sinosteel for 50% of production and Atlas Iron (a subsidiary of Hancock Prospecting) for the other 50%. The management team have done an excellent job navigating the permitting and native title processes to get the mine into operation and are now reaping the rewards of a very strong iron ore price. In its recent March quarterly cash flow report, the Company reported operating cash flow of $$22m and a net cash position of $27m (versus a market capitalisation of $155m). We expect an even stronger result for the June quarter given the 22% increase in the iron ore price to US$201.50/Mt since the end of last quarter
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/172933764.pdfApril, 2021
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/171992208.pdfFebruary, 2021
The Bennelong Kardinia Absolute Return Fund returned +1.86% in February, outperforming the market return (S&P/ASX300 Accumulation Index +1.48%). Proteomics is a medical technology company that has begun the commercialisation of its novel diabetic kidney disease test, ProMarkerD, which promises to accurately detect diabetic kidney disease up to four years in advance. The company has a very large addressable market and is collaborating with Janssen, a US pharmaceutical company. Proteomics has secured CE Mark registration for the EU and has signed licensing deals in Mexico, Dominican Republic, Spain, Italy and Israel. Cash burn is low due to income from its analytical business.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/167979731.pdfJanuary, 2021
The Australian equity market rose in January with the S&P/ASX300 Accumulation Index up 0.33%.
Global COVID cases passed 100m in January with global vaccinations now also around 100m. To date, Israel is leading the vaccination charge with around 35% of the population having received one dose (and 20% having received the second dose) and we are watching COVID cases and COVID-related deaths in Israel with interest. By comparison, vaccination progress in the UK sits at 14% and the US at 8%. Australia appears likely to begin vaccinating high priority patients in February/March, with the Federal Government hoping to have the entire population vaccinated by October.
Success with the global vaccination program will see a gradual re-opening of borders and the portfolio maintains a bias to stocks that benefit from a reopening of economies. These stocks include Flight Centre, Pointsbet and Xero.
Flight Centre has been operating at only ~12% of preCOVID levels, however sales will benefit as borders open, first domestically and then internationally. The speed of the recovery will depend on the pace of the vaccine rollout and its efficacy however Flight Centre is well-placed to weather the short-term given $1.3b of liquidity (up to 24 months cash flow coverage). Short interest has fallen from 15.7% to 9.8% of free float over the last month.
Pointsbet should benefit from fewer COVID-related disruptions to sporting events. The company is well capitalised following the announcement in August 2020 of a 5-year media partnership with NBCUniversal and accompanying capital raise. With US State budgets under pressure from the COVID-induced downturn in economic activity, we believe the opening up of sports betting (and associated tax revenues) across the United States is likely to accelerate.
Xero is highly exposed to the small and medium enterprise business sector. Any improvement in economic conditions is likely to see a slowdown in small business closures and potentially a pickup in new business formations.
Australian economic data was generally better than expected with house prices continuing to rise (+0.7% month on month in January) and home loans surging (+8.6% month on month) to record levels. Consumer sentiment is near ten-year highs.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/164975820.pdfDecember, 2020
The Bennelong Kardinia Absolute Return Fund returned +1.07% in December, with the market also up (S&P/ASX300 Accumulation Index +1.32%).
Iron ore stocks were the biggest contributors for the month due to the significant rise in the iron ore price (+22%). Travel stocks suffered due to an outbreak of COVID-19 in the northern beaches region of New South Wales that led to lockdowns and border closures and which subsequently spread to other States.
For the calendar year to 31 December 2020, the Kardinia Fund has returned +9.13%, outperforming the market (S&P/ASX300 Accumulation Index +1.73%). It was a tale of two halves with the Kardinia Fund successfully protecting capital during the large drawdown in February/March and also participating in the upside in the second half of the year. The top contributors for the year were Fortescue Metals, Commonwealth Bank, James Hardie, Harvest Technology and JB Hi-Fi. The biggest detractors included Virgin Money UK, Atlas Arteria, Austal, Beach Energy and City Chic.
The best market sectors in CY20 were Information Technology (+52%) and Materials (+19%) while Energy (-27%) and Utilities (-16%) lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/163381865.pdfNovember, 2020
The Bennelong Kardinia Absolute Return Fund returned +8.21% in November, which was a very strong month for the market (S&P/ASX300 Accumulation Index +10.23%). In fact, this was the biggest November month rise in over 100 years driven by optimism over a potential end to the COVID-19 pandemic because of successful vaccine trials and increased certainty regarding the US election result (Biden victory).
The Short Book again detracted from performance in what has been a difficult period for shorting. For the calendar year to 31 November 2020, the Kardinia Fund has returned +7.97%, outperforming the market (S&P/ASX300 Accumulation Index +0.41%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/162199676.pdfSeptember, 2020
The Bennelong Kardinia Absolute Return Fund returned -5.88% in September, below the return of the market (S&P/ASX300 Accumulation Index -3.59%). Some of the Fund’s recent strong performers were weaker during the month, particularly in the Financials and Consumer Discretionary sectors. We continue to expect good returns from these stocks over the medium term. For the calendar year to 30 September 2020, the Kardinia Fund has returned +0.48%, outperforming the market (S&P/ASX300 Accumulation Index -10.60%).
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/158688870.pdfticker: BFL0010AU
commentary_block: Array
factsheet_url:
https://documentscdn.financialexpress.net/Literature/91F791D63BCC966B6DF9E09B14D7245D/171992208.pdf
https://documentscdn.financialexpress.net/Literature/B206F1EF5DBA9B96A9CCB807B222F107/158688870.pdf
release_schedule: Monthly
fund_features:
Bennelong Kardinia Absolute Return Fund is a long/short strategy investing in Australian equities. It aims to generate consistent positive returns in all market conditions, with an overarching philosophy of capital protection.
- It provides variable exposure to the equity market, with the flexibility of lower volatility than the market and minimising losses in drawdowns.
- Aims to achieve returns in excess of 10% per annum over the long term.
- Variety of strategies are employed in a portfolio of Australian and New Zealand listed equities, derivatives and cash.
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