Monash Absolute Investment Fund

Monthly Performance Report: June 2021

Financial year 2021 was a year of recovery from the Covid-19 crash and delivered big returns. The Fund was up 44.72% (after fees) despite holding an average cash level of 19% over the 12 months. By comparison, the S&P/ASX200 rose 27.80% and the Small Ords rose 33.23%.

For the quarter, the Fund rose 2.33% (after fees) versus 8.29% for the S&P/ASX200 and 8.50% for the Small Ords. The Fund’s performance had lagged the markets somewhat in April and May with a number of the stocks taking treading water after an exceptionally strong prior 9 months.

However, performance picked up again in June where the Fund delivered 4.71% after fees compared to 2.26% for the S&P/ASX200 and 3.08% for the Small Ords

The main contributors to the good return this month were Telix (ASX: TLX) +35% and Australian Strategic Materials (ASX: ASM) + 64%. Telix applies nuclear medicine for the benefit of cancer patients. ASM is a developing “mine to manufacturer” producer of critical metals. It mines rare earths in Dubbo and will produce high-purity metals critical for a diverse range of advanced technologies.

Putting the big returns of FY 2021 in perspective

The S&P/ASX200 was only established as an index in 1992.  Up until then it was the All Ords that was the go to reference for market performance.

  • FY 2021’s 27.8% was the 2nd highest FY return for the S&P/ASX200 since it was established 29 years ago
  • The highest was FY 2007 at 28.7%, it was prior to the GFC and the market peaked 6 months later
  • It was about 3x the average annual return of 9.7%
  • FY 2021 was the first time that the S&P/ASX200 had been up 11 months out of 12

On only 3 previous occasions had the S&P/ASX200 been up 10 months out of 12

Looking at the All Ords, which we have on a price index basis back to 1938, FY 2021 was the 10th best year out of 83 years.

Interestingly 5 of those years were in the 1980s, prior to the ‘87 Crash.

  1. 1980 8%
  2. 1983 9%
  3. 1985 6%
  4. 1986 1%
  5. 1987 5%

 

The 1980s was a time of elevated inflation levels and highly fluctuating currency and interest rates, so with hindsight it’s not surprising that there were some nominally very high returns. It’s unlikely that in the current low inflation and low interest rate environment we will see annual returns of those levels without an extended period of market weakness.

Looking into FY 2022, we continue to have an optimistic outlook, based on a strong growth outlook, low interest rates and only modest short term inflation pressure.

Return Summary Since Inception1(after all fees)

Since Inception (p.a.)12.67%
1 Month4.71%
3 Months2.33%
6 Months6.70%
FYTD44.72%
1 Year44.72%
3 Years19.41%
5 Years11.55%
7 Years10.46%
Cumulative192.56%

1Inception date of Fund is 2 July 2012.

Fund Strategy

The Monash Absolute Investment Fund ARSN 606 855 501 (Fund) seeks to implement the investment strategy by investing in a diversified portfolio of predominantly Australian equities (long and short), with overseas assets expected to average no more than 5% over time.

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 Ratio0.67
Sortino Ratio1.20
Standard Deviation (p.a.)16%
Positive Months64%
Maximum Drawdown-29%
Avg Gross Exposure90%
Avg Net Exposure79%
Avg Beta0.63
Avg VAR1.2%

Monthly Portfolio Metrics

Outlook Stocks (Long)13 Positions: 60%
Outlook Stocks (Short)2 Positions: -4%
Event, Pair and Group (Long)3 Positions: 18%
Event, Pair and Group (Short)1 Positions: -1%
Cash26%
Gross Exposure83%
Net Exposure74%

Key Fund Information

FUM$15m
Minimum Investment$20,000
Management Fee1.2813% p.a.
Performance Fee20.5% above the RBA Cash Rate + 5% with High Water Mark
Pricing FrequencyDaily
Distributions Quarterly , targeting 1.50% p.a. of NAV each quarter
APIR CodeMON0001AU
Morningstar CategoryAlternatives Strategies

    For all business development enquiries, please contact

    SA,WA,NT: Andrew Fairweather
    Winston Capital partners (Acting on behalf of Monash Investors)

    P. +61 401 716 043
    E. Andrew@winstoncapital.com.au

    NSW, ACT, VIC, TAS: Stephen Robertson
    Winston Capital partners (Acting on behalf of Monash Investors)

    P. +61 418 387 427
    E. stephen@winstoncapital.com.au

    NSW, ACT, VIC, TAS: Cameron Harris
    Winston Capital partners (Acting on behalf of Monash Investors)

    P. +61 400 248 435
    E. cameron@winstoncapital.com.au

    For all investor enquiries, please contact

    Link Fund Solutions Pty Ltd (Acting on behalf of the Fund)

    P. +61 2 9547 4311
    E. LFS_registry@linkgroup.com

    Monash Absolute Investment Fund Unitholder Services, GPO Box 5482, Sydney NSW 2001

    For all other enquiries

    E. contactus@monashinvestors.com

        •  

    Cumulative Return Since Inception

      Gross/Net Exposure Since Inception

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          Important Information

          This document is issued by Monash Investors Pty Limited ABN 67 153 180 333, AFSL 417 201 (“Monash Investors”) as authorised representatives of Winston Capital Partners Pty Ltd ABN 29 159 382 813, AFSL 469 556 (“Winston Capital”) for the provision of general financial product advice in relation to the Monash Absolute Investment Fund ARSN 606 855 501 (“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 2nd July 2012.
          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, Winston Capital 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 1 July 2021 is available for the Fund. You should obtain and consider the PDS for the Fund before deciding whether to acquire, or continue to hold, an interest in the Fund. Initial Applications for units in the Fund can only be made pursuant to the application form attached to the PDS.
          Performance figures assume reinvestment of income. 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, Winston Capital 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 in this document 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.

          The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned MON0001AU June 2021) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners.com.au/RegulatoryGuidelines

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