International Fund - Managed Risk

The Pengana International Fund – Managed Risk is designed to stabilise portfolio returns and defend against sustained market falls whilst providing exposure to a diversified portfolio of highly cash-generative and growing global companies.

INVESTMENT STRATEGY

The Fund aims to achieve its investment objective by investing in units in the Pengana International Fund (the “Underlying Fund"), an actively managed global equity fund, and a risk overlay provided by a portfolio of derivatives to reduce volatility and mitigate downside risk (the “Overlay”). 

The Overlay is managed by Milliman Pty Ltd and is designed to smooth the impact of volatile markets, truncate losses from sustained market falls and provide risk management through a rules based approach. The risk overlay is applied to the existing Underlying Fund so investors can have access to an international portfolio diversified across industry, geography and company size, with the added protection of an independent risk manager.

The Underlying Fund is long-only, benchmark independent and typically holds 30-50 companies. The companies considered for inclusion in the portfolio demonstrate large and growing free cash flow generation, and are priced attractively relative to their cash flow.

The Underlying Fund portfolio is created from the stock ideas that work best together, rather than just the best stock ideas.

The investment team develops an understanding of the opportunities using detailed research covering financial statements, company meetings and external research. Companies that meet the investment criteria are divided into three segments:

Core (60-80%): are stable and growing businesses that generate consistent returns.

Cyclical (0-30%): businesses operating in cyclical industries that are posed for a cyclical upturn, which is not recognised in the share price.

Opportunistic (0-20%): are unique, company specific situations that offer attractive potential upside.

The Risk Management Overlay used for the Fund employs a systematic process, referred to as the Milliman Managed Risk Strategy, which has two components;

  • Volatility Management - dynamic adjustment of the equity exposure to stabilise portfolio volatility of returns
  • Capital Protection - increase effective cash to reduce losses in severe market declines

Milliman manage the risk of the Fund by varying the effective exposure to cash and international equities, dynamically reducing exposure in periods of higher risk and equity market falls. This process allows the Fund to stay invested in global securities (through its investment in the Underlying Fund) but reduces the volatility of returns and dampens downside risk. The overlay may invest in cash investments, Exchange Traded Futures, option contracts, currency futures and forward contracts to manage the risk of the Fund.

 

BENEFITS OF INVESTING

Focus on risk management. The fund uses a risk management overlay which aims to stabilise portfolio returns and truncate losses in sustained market falls.

Skilled investment team. The investment team has over 90 years of combined experience investing in global equities and has developed a successful and repeatable investment process.

A truly active fund. A relatively concentrated portfolio that is selected purely on investment merits rather than index weight.

Investment in high quality businesses at compelling valuations. The Fund aims to invest in businesses with compelling business models that consistently generate large and growing sums of cash.

Focus on risk and return. The portfolio focuses on 30-50 stocks that work together, with sufficient concentration to deliver returns and sufficient diversification to reduce risk.

Investment approach that is suitable across market environments. The investment team invests across different geographies, industries and company sizes and can adjust to changing market environments.

  • Performance History
    Fund performance for International Fund - Managed Risk

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    Investment Period to
    Please select a minimum 60 day date range.
    Performance at October 2019
    1 MTH 1 YEAR 3 YEARS 5 YEARS Since Inception
    International Equities Fund Managed Risk 0.55% 7.24% 9.55% - 6.41%
    MSCI All Country World Total Retur Index (net, AUD) 0.57% 15.83% 15.09% - 12.94%
    Outperformance vs. MSCI -0.02% -8.59% -5.55% - -6.54%

    Net performance figures are shown after all fees and expenses, and assume reinvestment of distributions.  Past performance is not a reliable indicator of future performance, the value of investments can go up and down.  The inception date for the Fund is 8 June 2016.

  • Fund Facts
    Minimum investment:

    $25,000

    Recommended timeframe:

    5 years or more

    Inception date:

    8 June 2016

    Benchmark:

    MSCI All Country World Total Return Index (net) in $A

    Management fee (incl GST):

    1.23% of the Class’ net asset value, plus a capped expense recovery amount of 0.104% of the Class’ net asset value. 

    Performance fee (incl GST):

    15.375% of any percentage increase in the NAV of the Class which is greater than the Index.

    Buy/sell spread:

    0.30% on both applications and redemptions

    Entry/ exit fees:

    Nil

    Fund pricing:

    Daily

    Distribution frequency:

    Annually in June

    APIR code:

    PCL0027AU

  • Unit Prices
    Unit Prices History Table
    Date Application Redemption Distributions
    18 Nov 2019 1.0720 1.0656 -
    15 Nov 2019 1.0758 1.0694 -
    14 Nov 2019 1.0706 1.0642 -
    13 Nov 2019 1.0667 1.0604 -
    12 Nov 2019 1.0659 1.0596 -
    11 Nov 2019 1.0649 1.0585 -
    08 Nov 2019 1.0641 1.0577 -
    07 Nov 2019 1.0636 1.0573 -
    06 Nov 2019 1.0593 1.0530 -
    05 Nov 2019 1.0662 1.0598 -
    04 Nov 2019 1.0659 1.0596 -
    01 Nov 2019 1.0631 1.0568 -
    31 Oct 2019 1.0590 1.0526 -
    30 Oct 2019 1.0570 1.0506 -

    Download Unit Prices

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  • Investment Team
    Jordan Cvet
    Jordan Cvetanovski

    Portfolio Manager

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    Steven Glass
    Steven Glass

    Deputy Portfolio Manager

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    James McDonald
    James McDonald

    Equity Analyst

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    Ronald Yu
    Ronald Yu

    Equity Analyst

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    Ryan Fisher
    Ryan Fisher

    Equity Analyst

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  • Investor Notifications

    There are currently no investor updates for this Fund

  • Reports and Resources
    Important Information

    International Fund - Managed Risk

       

    • Ratings and Awards
      Ratings
      Lonsec Investment Grade*** Click to View
      Zenith Recommended** Click to View

      This report may only be accessed by holders of Australian Financial Services Licences and their authorised representatives.

      **The Zenith Investment Partners ("Zenith") Australian Financial Services License No. 226872 rating (assigned March 2019) referred to in this document is limited to "General Advice" (as defined by the 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. 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. Zenith usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessment’s and at http://www.zenithpartners.com.au/RegulatoryGuidelines.

      ***The Lonsec Rating (assigned November 2018) presented in this document is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445. The Rating is limited to "General Advice" (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product(s). Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a recommendation to purchase, sell or hold Pengana Capital product(s), and you should seek independent financial advice before investing in this product(s). The Rating is subject to change without notice and Lonsec assumes no obligation to update the relevant document(s) following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria.

      For further information regarding Lonsec's Ratings methodology, please refer to our website at: http://www.beyond.lonsec.com.au/intelligence/lonsec-ratings.