ASX:MAAT Monthly Performance Report

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Monthly Performance Report: February 2023

In February, the Fund fell 4.7% (after fees).  This compares to a decrease of 2.5% for the S&P/ASX200 and a fall of 3.7% for the Small Ords.

Lower overseas markets provided a soft lead for the ASX, with the S&P500 falling 2.4% for the month. Concerns about the extent of further RBA rate rises in response to the latest inflation figures also contributed to the ASX weakness.  While inflation has fallen from its peak of 8.4% for calendar year 2022, the 12 months to 31 January was still very high at 7.4%.

February was a company results reporting month. A common theme during this reporting season was weak like-for-like growth, and the impact of inflation on margins.

Over the course of last year we had tilted our portfolio towards stocks that are less exposed to the economic cycle, but rather have strong structural growth and pricing power. As a result our stocks have been doing relatively well as businesses.   9 out of our top 10 holdings reported first half results in February. Following these results, analyst consensus changes to their FY24 earnings forecasts resulted 6 upgrades, 1 downgrade and 2 had no meaningful change.

Unfortunately the positive achievements of the companies were not reflected in the overall return of the portfolio, and we somewhat underperformed the market. The portfolio consists of high-quality companies with long-standing pricing power and reputable management teams. We remain positive on their outlook and future valuations.   We will provide greater details on this during our post-reporting season webinar on Tuesday the 14th of March.

We continue to identify compelling investment opportunities.  We have seen in the past that as our companies execute on their business opportunities, the market will eventually recognise this in their share prices.  This is what has driven our longer term investment returns namely our ability to continue to identify compelling opportunities.

Over the last 3 years our disciplined opportunistic approach to shorting stocks has been a strong contributor to portfolio returns. At any one time it is rare for us to have more than half a dozen

positions and they tend to be held for relatively short periods.  The number of positions increase and decrease as we identify or close out opportunities.  

Over the last month we closed out 3 short positions and now temporarily have no shorts in the portfolio but we continue to evaluate short candidates.  

We look forward to catching up with you in March for our post-reporting season Webinar.  Please, click on this link to register.

Return Summary Since Inception1(after all fees)

Since Inception (p.a.)-2.62%
1 Month-4.67%
3 Months-4.53%
6 Months-4.20%
1 Year-4.40%

1Inception date of Fund is 28 May 2021.

Fund Strategy

The Monash Absolute Active Trust (Hedge Fund) ASX:MAAT seeks to implement the investment strategy by investing in Australian equities (long and short).

The investment strategy is Benchmark Unaware and there is no predetermined asset allocation; rather, the Fund only invests when suitable opportunities are identified. As such, asset exposures may vary significantly over time and without notice.

The Fund seeks to only invest in compelling opportunities. To identify these investment ideas, Monash Investors primarily employs fundamental, bottom-up company research and the judgement of its experienced portfolio managers.

Portfolio Analytics Since Inception

Sharpe Ratio0.50
Sortino Ratio0.88
Standard Deviation (p.a.)16%
Positive Months61%
Maximum Drawdown-29%
Avg Gross Exposure91%
Avg Net Exposure79%
Avg Beta0.68

Monthly Portfolio Metrics

Outlook Stocks (Long)14 Positions: 66%
Outlook Stocks (Short)0 Positions: 0%
Event, Pair and Group (Long)3 Positions: 19%
Event, Pair and Group (Short)0 Position: 0%
Gross Exposure85%
Net Exposure85%

Invest with us

We would welcome you as a co-investor in the Fund.

This information is issued by Monash Investors Pty Limited ABN 67 153 180 333, AFSL 417 201 (“Monash Investors”) as authorised representatives of Sanlam Private Wealth Pty Ltd ABN 18 136 960 775, AFSL 337 927 (“Sanlam”) for the provision of general financial product advice in relation to the Monash Absolute Active Trust (Hedge Fund) ARSN 642 280 331 (“Fund”). Monash Investors is the investment manager of the Fund. The Trust Company (RE Services) Limited ABN 45 003 278 831, AFSL 235 150 (“Perpetual”) is responsible entity of, and issuer of units in, the Fund. The inception date of the Fund is 28 May 2021.

The information provided in this document is general information only and does not constitute investment or other advice. The content of this document does not constitute an offer or solicitation to subscribe for units in the Fund or an offer to buy or sell any financial product. Accordingly, reliance should not be placed on this document as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation. Monash Investors, Sanlam and Perpetual do not accept liability for any inaccurate, incomplete or omitted information of any kind or any losses caused by using this information. Any investment decision in connection with the Fund should only be made based on the information contained in the disclosure document for the Fund. A Product Disclosure Statement (“PDS”) issued by Perpetual dated 21 May 2022 together with a Target Market Determination (“TMD”), both issued by Perpetual, is available for the Fund. You should obtain and consider the PDS and TMD for the Fund before deciding whether to acquire, or continue to hold, an interest in the Fund. A copy of the PDS and TMD is available on this website.

Total returns shown for the Fund have been calculated using exit prices after taking into account all ongoing fees and assuming reinvestment of distribution. No allowance has been made for taxation Past performance is not a reliable indicator of future performance. Comparisons are provided for information purposes only and are not a direct comparison against benchmarks or indices that have the same characteristics as the Fund. Reference to Target Distributions, is a target return only. There is no guarantee that the Fund will meet its investment objective. The payment of a quarterly distribution is a goal of the Fund only and neither Monash Investors or Perpetual provide any representations or warranty (whether express or implied) in relation to the payment of any quarterly cash income. The Trust reserves the discretion to amend its distribution policy Past performance is not a reliable indicator of future performance. Comparisons are provided for information purposes only and are not a direct comparison against benchmarks or indices that have the same characteristics as the Fund.

Monash Investors, Sanlam and Perpetual do not guarantee repayment of capital or any particular rate of return from the Fund and do not give any representation or warranty as to the reliability, completeness or accuracy of the information contained in this document. All opinions and estimates included in this document constitute judgments of Monash Investors as at the date of this document are subject to change without notice. Perpetual is not responsible for this document.

The rating contained on this website is issued by SQM Research Pty Ltd ABN 93 122 592 036 AFSL 421913. SQM Research is an investment research firm that undertakes research on investment products exclusively for its wholesale clients, utilising a proprietary review and star rating system. The SQM Research star rating system is of a general nature and does not take into account the particular circumstances or needs of any specific person. The rating may be subject to change at any time. Only licensed financial advisers may use the SQM Research star rating system in determining whether an investment is appropriate to a person’s particular circumstances or needs. You should read the product disclosure statement and consult a licensed financial adviser before making an investment decision in relation to this investment product. SQM Research receives a fee from the Fund Manager for the research and rating of the managed investment scheme

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