Alleron’s fund updates portfolio
Alleron’s Long Short Fund, which returned 1.50 per cent for the March quarter compared to a 3.90 per cent fall in the ASX 100, has announced a few portfolio changes.
The fund said it marked the second quarter since inception when it had delivered a positive return in a falling market. At the same time, net return after fees since inception reached 41 per cent compared to the market return of 18.43 per cent.
According to the fund, in the March quarter the Australian market fell as international markets saw increased volatility from trade war tensions between China and the US.
Also, subdued Chinese construction activity resulted in volatility in the iron ore price and other related commodity prices, while big banks remained under pressure from the Royal Commission.
As far as the portfolio was concerned, the fund decided to increase its exposure to Computershare due to its strong revenue growth and economies of scale in the US and UK mortgage services divisions.
The fund also lifted its exposure to Sims Metal Management, with the company’s operations supported by a strong US economic outlook, and to Santos which continued cost cutting and divestment of non-core assets to reduce its risk profile in a volatile oil price environment.
At the same time, the fund would decrease its exposure to Nanosonics due to its slower international growth and the company’s “sluggish adoption rates in newer territories”.
Two other companies that would also see lower exposure were Downer EDI and Spark Infrastructure.
The fund would decrease its exposure to Downer EDI due to the loss of key mining contracts and decreased potential for earnings growth, while Spark Infrastructure saw high gearing which would leave its dividend vulnerable to a potential rise in interest rates.
AUTHOR
Oksana Patron
Recommended for you
Sydney-based alternative fund manager East Coast Capital Management has formed its first advisory council as it enters its next phase of growth.
With 40 per cent of advice practices looking to increase their ETF usage, the next frontier being embraced is smart beta ETFs with flows doubling in July, providers have said.
Australian ETFs saw flows of $5.8 billion in July, more than double the previous month, and adviser adoption is tipped to help total flows reach $50 billion by the end of the year.
Pinnacle’s London affiliate, Life Cycle Investment Partners, has secured over $15 billion in FUM in its first year and achieved profitability, the firm’s fastest affiliate to do so.
