September, 2023
The Portfolio returned 0.23%, 12.0%, 7.56% and 8.32% net of fees for the quarterly, 1-,5-, and 10-year periods, versus returns of -0.84%, 12.92%, 6.61% and 7.39% for the S&P/ASX 300 Accumulation Index. Stock selection contributed to returns, while sector allocations were negative.
Key sources of positive active returns included stock selection in materials, a combination of stock selection and an underweight position in health care, and stock selection in industrials. Leading advances within these sectors respectively included a net short position in Chalice Mining, a holding in Cochlear, and a net short position in Auckland International Airport. Detractors included a combination of stock selection and an underweight position in consumer discretionary, stock selection in real estate, and a combination of stock selection and an underweight position in energy. Leading declines within these sectors in turn included a net short position in Baby Bunting Group, a holding in Growthpoint Properties Australia, and a net short position in Boss Energy.*
Key Holdings1
Positive
‐ Our overweight to Cochlear Ltd, a provider of implantable hearing solutions for children and adults, was rewarded with 20 basis points of active returns as share prices gained 11.4% over the quarter. The company has been benefiting from increased sales of its cochlear implant units across both the developed and the emerging markets on the back of improved clinical capacity and a rise in COVID catch-up surgeries. It now expects its FY24 underlying net profit to increase by 16- 23% from FY23.
Negative
‐ Our overweight to Qantas Airways Ltd, a provider of air transportation services, cost the portfolio 23 basis points of active return as share prices slumped 20.7% in the period. The company continues to be impacted by post-COVID supply chain and resourcing challenges that have resulted in a high number of cancellations and delays. Numerous lawsuits and reputational challenges remain as other major headwinds for the company.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-September-2023.pdfJune, 2023
The Portfolio returned -0.98%, 15.05%, 7.73% and 9.51% net of fees for the quarterly, 1-,5-, and 10-year periods, versus returns of 0.99%, 14.40%, 7.11% and 8.54% for the S&P/ASX 300 Accumulation Index. Stock selection detracted from returns, while sector allocations were negative.
Key sources of negative active return included a combination of stock selection and an overweight position in materials, stock selection in consumer staples, and a combination of stock selection and an underweight position in real estate. Leading declines within these sectors respectively included a position in South32, a holding in Treasury Wine Estates, and an investment in Vicinity. Contributors included stock selection in health care, stock selection in consumer discretionary, and stock selection in financials. Leading advances within these sectors in turn included a net short position in Ramsay Health Care, a net short position in Baby Bunting Group, and a net short position in Bank of Queensland.*
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-June-2023.pdfMarch, 2023
The Portfolio returned 2.55%, 2.79%, 9.35% and 9.28% net of fees for the quarterly, 1-,5-, and 10-year periods, versus returns of 3.33%, -0.60%, 8.63% and 8.12% for the S&P/ASX 300 Accumulation Index. Stock selection detracted from returns, and sector allocations were negative.
Key sources of negative active return included a combination of stock selection and an underweight position in consumer staples, stock selection in industrials, and stock selection in materials. Leading declines within these sectors respectively included a position in Woolworths Group, a holding in Aurizon Holdings, and an investment in Incitec Pivot. Contributors included a combination of stock selection and an underweight position in real estate, stock selection in health care, and stock selection in financials. Leading advances within these sectors in turn included a net short position in Ingenia Communities Group, a holding in Sonic Healthcare, and a net short position in Omni Bridgeway.*
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-March-2023.pdfDecember, 2022
The Portfolio returned 10.05%, 3.77%, 8.60% and 10.00% net of fees for the quarterly, 1-,5-, and 10-year periods, versus returns of 9.13%, -1.80%, 7.09% and 8.61% for the S&P/ASX 300 Accumulation Index. Stock selection contributed to returns, while sector allocations were negative.
Key sources of positive active returns included a combination of stock selection and an underweight position in consumer discretionary, a combination of stock selection and an underweight position in consumer staples, and a combination of stock selection and an overweight position in materials. Leading advances within these sectors respectively included a net short position in Baby Bunting Group, a net short position in BWX, and a net short position in ioneer. Detractors included a combination of stock selection and an overweight position in health care, stock selection in financials, and a combination of stock selection and an underweight position in real estate. Leading declines within these sectors in turn included a net short position in Fisher & Paykel He NPV, a holding in Medibank Pvt, and a net short position in Centuria Industrial REIT.*
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-December-2022.pdfSeptember, 2022
The Fund returned 3.3%1 for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 2.8%. Stock selection contributed to returns and sector allocations were positive.
Key sources of positive active return included stock selection in energy, a combination of stock selection and a underweight position in consumer discretionary, and a combination of stock selection and an underweight position in industrials. Leading advances within these sectors respectively included a position in Whitehaven Coal, a holding in PWR Holdings, and an investment in Transurban Group. Detractors included stock selection in financials and stock selection in materials. Leading declines within these sectors in turn included a net short position in Pinnacle Investment Management Group and a net short position in ioneer.*
After rallying to start the second half of the year, global stocks fell for much of September, as concerns over aggressive central bank tightening as well as ongoing geopolitical issues weighed on global growth expectations. The OECD noted that world economies are slowing more than it had previously anticipated. As of September, it estimated global GDP growth of 3% in 2022 and only 2.25% in 2023. In the U.S., the equity market’s slide reflected growing resignation among investors that the Federal Reserve is unlikely to soften its hawkish stance until there is significant evidence that inflation is truly in check. The dollar has risen significantly as the Fed has rapidly pushed U.S. rates higher. That, combined with anxiety about a global slowdown, has caused commodity prices to fall. Oil, which had traded above $120 (WTI) as recently as June, retreated below $80 by quarter end. Russian oil continued to be purchased – at discounted prices – by China and India. The war in Ukraine continued to dominate geopolitical headlines. By quarter end, Russian President Vladimir Putin had announced a partial mobilization of Russian forces, which was soon followed by the annexation of four Ukrainian provinces. The two Nord Stream pipelines, which send natural gas from Russia to Germany, ruptured in late September. While neither pipeline was operational at the time, the mysterious event further underscored the fragility of Europe’s energy security.
The Reserve Bank of Australia (RBA) has maintained its stance that it will tackle rising price in the country through a tight monetary policy while stimulating economic activity through careful investments. The RBA seeks to bring Australia’s inflation into the 2-3% range while keeping the economy stable. The central bank expects Australia’s economy to grow steadily this year. The GDP is expected to grow 3.8% in 2022, and approximately 1.8% in 2023 and 2024. The RBA remains confident that strong labour demand is likely to push unemployment even lower to 3.7% by the end of this year while the job vacancies are expected to remain at all-time highs.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-September-2022.pdfJune, 2022
The Fund returned -11.3%1 for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 0.9%. Stock selection contributed to returns, while sector allocations were negative.
Key sources of positive active return included stock selection in information technology, a combination of stock selection and an overweight position in energy, and stock selection in consumer staples. Leading advances within these sectors respectively included a net short position in Tyro Payments, a holding in Woodside Energy Group, and a net short position in BWX. Detractors included stock selection in consumer discretionary, a combination of stock selection and an overweight position in materials, and stock selection in health care. Leading declines within these sectors in turn included a position in Harvey Norman Holdings, a holding in BHP Group, and a net short position in PolyNovo.
The second quarter of 2022 was another challenging period for Australian equities (S&P/ASX 300 Accumulation Index) as a range of global events took a toll on markets, resulting in a return of -12.2%. Inflation soared across all developed markets as many central banks have taken a strong stance against the spiraling inflation including the Fed, which hiked lending rates by as much as 75 basis points and the Reserve Bank of Australia, which announced a rate hike of 50 basis points at the end of the quarter. As investors grappled with the very real possibility of an impending recession, markets reflected the sentiment as all major indices reported a poor to sub-par quarter. Chinese stocks were the only bright spot as COVID-19-induced lockdowns were finally lifted in the country. However, the Asian giant’s economic growth predictions have taken a major hit and the country announced a US$75 billion fund to get things back on track. In Europe, Finland and Sweden were granted membership to NATO. The membership had underlying tones of bolstering support to Ukraine (which shares borders with both nations) as the invasion by Russia continued to rage in the country. The ramifications of sanctions against Russia emerged as the country defaulted on bond yield payments for the first time since 1918. The ban on the exports of energy, food and other commodities from the country also contributed to fuel surging prices across the globe.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-June-2022.pdfMarch, 2022
The Fund returned 3.8%1 for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 1.7%. Gains from stock selection were joined with value gained from sector allocations.
Key sources of positive active return included a combination of stock selection and an overweight position in materials, a combination of stock selection and an underweight position in communication services, and stock selection in financials. Leading advances within these sectors respectively included a position in Coronado Global Resources, a net short position in Domain Holdings Australia, and a net short position in Zip. Detractors included stock selection in industrials, stock selection in real estate, and a combination of stock selection and an overweight position in health care. Leading declines within these sectors in turn included a net short position in CIMIC Group, a holding in Charter Hall Group, and an investment in Sonic Healthcare
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-March-2022.pdfDecember, 2021
The Fund returned 3.0%1 for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 0.8%. Gains from stock selection were joined with value gained from sector allocations. Key sources of positive active return included a combination of stock selection and an underweight position in financials, a combination of stock selection and an overweight position in materials, and stock selection in health care.
Leading advances within these sectors respectively included a position in Westpac Banking, a holding in Grange Resources, and an investment in Australian Clinical Labs. Detractors included a combination of stock selection and an overweight position in energy, stock selection in industrials, and a combination of stock selection and an underweight position in real estate. Leading declines within these sectors in turn included a position in Whitehaven Coal, a holding in SmartGroup, and a net short position in National Storage REIT.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-December-2021-1.pdfSeptember, 2021
The Fund returned 1.8% for the quarter (gross of fees), performing in line with the S&P/ASX 300 Accumulation Index. Gains from stock selection were offset with value lost from sector allocations.
Key sources of positive active return included a combination of stock selection and an overweight position in information technology, stock selection in energy, and stock selection in materials. Leading advances within these sectors respectively included a position in Technology One, a holding in Whitehaven Coal, and an investment in South32. Detractors included a combination of stock selection and an underweight position in real estate, stock selection in consumer discretionary, and stock selection in industrials. Leading declines within these sectors in turn included a net short position in Lifestyle Communities, a net short position in Star Entertainment Group, and an investment in Sydney Airport.
Key Holdings
Positive
‐ Our overweight exposure to Whitehaven Coal, an Australian coal mining company, was rewarded with 48 basis points of active return. Share prices closed near mid-2019 highs, up 66% over the quarter, as coal prices surged on supply struggles to keep pace with heightened demand.
Negative
‐ Our short exposure to Lifestyle Communities Ltd., the Victorian-based provider of resort style housing for downsizing Baby Boomers, cost the portfolio 34 basis points of active return. Share prices gained 41% over the quarter on favorable financial results, including an 8.3% increase in revenue in the year ending in June. Further boosting gains is a robust pipeline of projects which is expected to deliver 1100 to 1300 new home settlements and 450 to 550 resale settlements over the next three years.
June, 2021
The Fund returned 9.1% for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 0.7%. Gains from stock selection more than offset value lost from sector allocations.
Key sources of positive active return included a combination of stock selection and an overweight position in materials as well as stock selection in health care and real estate. Leading advances within these sectors respectively included a position in Boral, a holding in Pro Medicus, and a lack of exposure to Dexus.
Detractors included stock selection in consumer staples and information technology alongside a combination of stock selection and an underweight position in communication services. Leading declines within these sectors included a position in Costa Group Holdings, a net short position in Megaport, and a net short position in Domain Holdings Australia.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-June-2021.pdfMarch, 2021
The Fund returned 6.0% for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 1.8%. Gains from stock selection more than offset value lost from sector allocations. Key sources of positive active return included stock selection in Information Technology, Materials, and Health Care.
Leading advances within these sectors respectively included a position in Codan, a short position in Resolute Mining, and a net short position in PolyNovo. Detractors included stock selection in Industrials, stock selection in Energy, and an underweight position in Financials. Leading declines within these sectors in turn included a short position in Bingo Industries, a holding in Woodside Petroleum, and a short position in Zip.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-March-2021-1.pdfDecember, 2020
The Fund returned 12.77% for the quarter (gross of fees), underperforming the S&P/ASX 300 Accumulation Index by 1.02%. Stock selection and sector allocations detracted from returns.
Key sources of negative active return included stock selection in consumer discretionary, information technology and consumer staples. Leading declines within these sectors respectively included a position in JB Hi-Fi, a holding in Data#3, and an investment in McPherson's. Contributors included stock selection in financials, industrials and real estate. Leading advances within these sectors in turn included a lack of exposure to ASX, a holding in McMillan Shakespeare, and a net short position in Centuria Industrial REIT.
Key Holdings
Positive ‐ Our opportunistic exposure to Regis Healthcare yielded 29 basis points of active return. Share prices of the Australia-based provider of aged care services plummeted 81% over the quarter. The decline was directionally aligned with a general rotation away from pandemic winners, including healthcare; and deepened by funding pressures on the residential aged care sector which impacted occupancy rate, revenues, and costs. A fire in one of the residential aged care sites also generated downward pressure on share prices.
Negative ‐ Our overweight holding in A2 Milk cost the fund 28 basis points in active return. Share prices fell 18.5%* as the company experienced a number of challenges resulting from COVID-19 and the associated containment measures. This included lower than anticipated sales to retail daigous in Australia, primarily due to reduced tourism from China and international student numbers. The prolonged Stage 4 lockdown in Victoria resulted in a contraction more significant than expected. While the disruption in the daigou channel predominantly affected infant nutrition sales, it also adversely impacted sales in other nutritional segments.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-December-2020.pdfSeptember, 2020
The Fund returned 1.99% for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 2.04%. Stock selection and sector allocations contributed to returns.
Key sources of positive active return included stock selection in Consumer Discretionary, a combination of stock selection and an overweight position in Materials, and a combination of stock selection and an overweight position in Information Technology. Leading advances within these sectors respectively included a position in Kogan.com Ltd, a holding in Fortesque Metals Group, and an investment in Codan. Detractors included stock selection in Energy and stock selection in Utilities. Leading declines within these sectors in turn included a position in Whitehaven Coal and holding in AGL Energy Ltd.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/CFS-Acadian-Wholesale-Australian-Equity-Long-Short-Fund-September-2020.pdfticker: FSF0789AU
commentary_block: Array
factsheet_url:
QUARTERLY FUND FACTSHEET
https://www.acadian-asset.com/au/australian-equity-long-short-fund
release_schedule: Quarterly
fund_features:
The Acadian Australian Equity Long Short Fund uses quantitative modelling and fundamental insights to invest in undervalued stocks and short-sell overvalued stocks, generally maintaining a gross long exposure of 130% and a gross short exposure of 30%. The investment approach is both multi-faceted and highly adaptable, which allows Acadian to take advantage of attractive stocks opportunities as they arise. Acadian casts a wide net to discover mispriced stocks, analysing more than 1,000 stocks daily to find the most attractive investment opportunities for inclusion in the portfolio.
- Analyzes more than 1000 stocks daily to uncover opportunities and discover hidden value
- Systematic bottom-up analysis converts insights into risk and return forecasts
- High tracking error and smaller portfolio size, which allows for active returns above the index
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