K2 Asian Absolute Return (KAM0100AU) Report & Performance

What is the K2 Asian Absolute Return fund?

K2 Asian Absolute Return aims to deliver superior risk adjusted returns through the investment cycle. Our target return is 10+% p.a. over the long term. We actively invest in equities when growth opportunities exist to generate positive returns for our clients, and aim to protect these gains when market conditions change.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For K2 Asian Absolute Return

K2 Asian Absolute Return Fund Commentary September 30, 2023

The K2 Asian Fund returned +0.83% for the month outperforming the index by +2.94%. The fund is now up +5.3% over the past three months. Maintaining an underweight to China has been positive for the fund.

The economic theme within the APAC Region over the past two years is the consistent weaker economic momentum for mainland China. The key challenge for the second largest economy is dealing with the consequences of the very sharp and depressed property construction sector. The impact on other key partial economic indicators has also been severe. This is clearly evident in the weak consumer and business sentiment. The high debt levels the property sector are also notable headwinds and a challenge for Beijing as they look to deliver another stimulus package to help drive domestic demand.

Given the challenges from the property sector in China, it is no surprise that monetary policy has been accommodative while other economies have been raising interest rates. The central bank, the PBOC has been stimulating their economy. While this has helped cushion the downside many challenges remain. In particular, the regulatory over reach by in 2021 has been a negative for global investors who remain underweight. Further, the large debt ratios and property construction sector headwinds have combined to hold back the China recovery.


Product Snapshot

  • Product Overview
  • Performance Review
  • Peer Comparison
  • Product Details

Product Overview

Fund Name APIR Code
? A Product Code is unique a identifier code issued by a group or governing body, to reference products in a large group. For an example, APIR codes are commonly used for Funds and Ticker codes are commonly used for Securities such as ETFs and Stocks.
Asset Class
? An Asset Class breakdown provides the percentages of core asset classes found within a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and beyond) generally refer to broad categories such as equities, fixed income, and commodities.
Asset Category
? An Asset Category is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset categories (or a sub-asset class) are made up of instruments which often behave similarly to one another in the marketplace, looking down to the Asset Category level is important if looking to build a diversified portfolio.
Peer Benchmark Name
? A Peer Index (benchmark) refers to a peer group of investment managers who have the same investment style or category. It is used to compare the performance of one manager to their peer group, which makes it simpler for investors to choose between the vast number of investment managers.
Broad Market Index
? A Market Index (benchmark) refers to a hypothetical portfolio of investments that represents a segment, asset or category of an investable market. Market Indices are used to benchmark managers performance, to assist their style reliability and ability to provide excess returns.
? Funds/Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.
Management Fee
? A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting finanical products and managing the portfolio.
Performance Fee
? A performance fee is a payment made to an investment manager for generating positive returns. This is as opposed to a management fee, which is charged without regard to returns. A performance fee can be calculated many ways. Most common is as a percentage of investment profits, often both realized and unrealized. It is largely a feature of the hedge fund industry, where performance fees have made many hedge fund managers among the wealthiest people in the world.
? A spread can have several meanings in finance. Basically, however, they all refer to the difference between two prices, rates or yields. In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity. This is known as a bid-ask spread.
K2 Asian Absolute ReturnKAM0100AUManaged FundsForeign EquityLong ShortForeign Equity - Long Short IndexDeveloped -World Index10.97 M1.36%0.04%0.5%

Performance Review

Fund Name Last Month
? Returns after fees in the most recent (last) month).
3 Months Return
? Returns after fees in the most recent 3 months.
1 Year Return
? Trailing 12 month returns.
3 Years Average Return
? Average Annual returns from the last 3 years.
Since Inc. Average Return
? Average (annualised) returns since inception
1 Year Std. Dev. (Annual)
? The standard deviation (or annual volatility) of the last 12 months.
3 Years Std. Dev. (Annual)
? The average standard deviation (or annual volatility) from the last 3 years.
Since Inc. Std. Dev. (Annual)
? The average standard deviation (or annual volatility) since the fund inception.
1 Year Max Drawdown
? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
3 Year Max Drawdown
? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Since Inc. Max Drawdown
? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
K2 Asian Absolute Return7%7.73%12.79%-6.44%6.29%11.35%12.46%14.35%-6.19%-32.31%-34.38%

Peer Comparison

Fund Name Peer Index Name
? A group of individuals who share similar characteristics and interests are called peer groups. Peer group analysis is an essential part of assessing a price for a particular stock in investment research. The emphasis here is on making a comparison, meaning that the peer group constituents should be more or less identical to the company being examined, especially in terms of their main business and market capitalization areas.
12 Months Excess Return
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
Excess Return Annualised Since Inception
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
12 Months Alpha
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over 12 months. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
Alpha Annualised Since Inception
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market annualized since inception. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
12 Months Beta
? Rolling 12Month Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
Beta Annualised Since Inception
? Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
12 Months Tracking Error
? 12Month Tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark over the last 12 months. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
Tracking Error Since Inception
? Since Inception tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark since inception. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
12 Months Correlation
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Correlation Since Inception
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
K2 Asian Absolute ReturnForeign Equity - Long Short Index-0.09%-2.87%-0.05%-0.19%-0.19%1.119.38%10.37%0.610.69

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
K2 Asian Absolute ReturnYes-https://www.k2am.com.au/-

Product Due Diligence

What is K2 Asian Absolute Return

K2 Asian Absolute Return is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Long Short Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The K2 Asian Absolute Return has Assets Under Management of 10.97 M with a management fee of 1.36%, a performance fee of 0.04% and a buy/sell spread fee of 0.5%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the K2 Asian Absolute Return has returned 7% in the last month. The previous three years have returned -6.44% annualised and 14.35% each year since inception, which is when the K2 Asian Absolute Return first started.

How is risk measured in this investment product?

There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since K2 Asian Absolute Return first started, the Sharpe ratio is 0.25 with an annualised volatility of 14.35%. The maximum drawdown of the investment product in the last 12 months is -6.19% and -34.38% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.

What is the relative performance of the investment product?

Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The K2 Asian Absolute Return has a 12-month excess return when compared to the Foreign Equity - Long Short Index of -0.09% and -2.87% since inception.

Does the investment product produce Alpha over its Peers?

Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. K2 Asian Absolute Return has produced Alpha over the Foreign Equity - Long Short Index of -0.05% in the last 12 months and -0.19% since inception.

What are similar investment products?

For a full list of investment products in the Foreign Equity - Long Short Index category, you can click here for the Peer Investment Report.

What level of diversification will K2 Asian Absolute Return provide?

K2 Asian Absolute Return has a correlation coefficient of 0.69 and a beta of 1.11 when compared to the Foreign Equity - Long Short Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.

How do I compare the investment product with its peers?

For a full quantitative report on K2 Asian Absolute Return and its peer investments, you can click here for the Peer Investment Report.

How do I compare the K2 Asian Absolute Return with the Developed -World Index?

For a full quantitative report on K2 Asian Absolute Return compared to the Developed -World Index, you can click here.

Can I sort and compare the K2 Asian Absolute Return to do my own analysis?

To sort and compare the K2 Asian Absolute Return financial metrics, please refer to the table above.

Has the K2 Asian Absolute Return been independently verified by SMSF Mate?

This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.

How can I invest in K2 Asian Absolute Return?

If you or your self managed super fund would like to invest in the K2 Asian Absolute Return please contact via phone or via email .

How do I get in contact with the K2 Asian Absolute Return?

If you would like to get in contact with the K2 Asian Absolute Return manager, please call .

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the K2 Asian Absolute Return. All data and commentary for this fund is provided free of charge for our readers general information.

Historical Performance Commentary

Performance Commentary - August 31, 2023

The K2 Asian Fund returned -0.15% for the month. The weaker economic data pulse In China continued to weigh on market sentiment. This has been a consistent feature as the regular economic data flow reinforces the softer momentum for the second largest economy compared to expectations. Further, high government debt levels and concerns with the property market are key structural headwinds for Beijing. Hence the soft consumer and business sentiment creates additional challenges for policy makers to turn things around.

The policy response has been targeted and active with limited effect to date. The central bank in China, the PBOC has been persistent with their monetary stimulus over the past two years. While it is clear they are not too keen to go down the quantitative easing pathway, their stimulus is measured and pragmatic given the very large levels of debt within their property sector and municipal/local government level.

On the positive side, the recent weekly data flow in China indicates some consolidation of the run of weak partial economic Indicators. While there limited upside to the data flow by year-end, the worst looks to be behind for now as recent stimulus measures are expected cushion the downside. Economic revisions to China GDP will continue to be revised from the mid 5% levels earlier this year to just under 5%. The lower inflation data coming out of China is positive for other key global economies.

The recent announcement regarding the expanding BRIC economic members lead by China may be a positive longer-term alignment for additional free trade agreement and therefore economic activity However, in the shorter-term China will continue to rely increasingly on their domestic demand which will require additional stimulatory policy support. Further, the case for global investors to increase their exposure to longer duration investments remain limited. An underweight exposure will continue to remain for many developed market investors. Some scope for short term tactical positions

beneficiaries of the China slowdown within the region continues to be Japan. India and the South-east Asia region (including Australia). We continue to maintain underweight exposure to China and an overweight to South-East Asia Pacific. A focus on earnings that export to China Livs continues to be our preferred investment strategy.

Performance Commentary - July 31, 2023

The K2       Asian       Fund       returned       4.63%      for      the      month      to      outperform      the index.    The    strong    monthly    performance    of    the    fund   has   been   the   result   of the      underweight      to      China      and      overweight      to      SE      Asia,      the      Pacific     and other     global     regions.     Some     of     the     best     sector     and     stock     contributors     to the       monthly       performance       have       been       the       energy       sector       that      includes Beach    Energy    (BPT),    Karoon    Energy    (KAR)    and    Woodside   (WPL).   Other good      performing      sectors      included     financials,     Kina     Securities     (KSL)     and JP      Morgan      (JPM).     Also,     exposure     to     the     NZ     aged     care     and     residential sector, Winton Land (WTN) and Summerset Group (SNZ).

Increasingly     markets    globally    are    becoming    more    comfortable    with    a    soft economic       landing      scenario.      The      regular      economic      data      flow      from      key leading        developed        economies        reinforces        the        resilience        of       aggregate economic,        credit        conditions        and       earnings.       The       strong       labour       market conditions     in     the     US     have     been     supportive     despite    the    most    aggressive tightening    cycle    for    a    generation    from   the   Fed.   Further,   the   consumer   and business         sentiment         indicators         appear         to         be        holding        up        in        the        US compared        to        other        economies        such       as       the       EU       region,       the       UK       and Australia.    Key    global    central    banks,    particularly   the   Fed   are   well   placed   to engineer a soft landing which implies that rates will stay higher for longer.

China         continues         to         disappoint         with         ongoing        weaker        than        expected economic      data      as     conditions     for     households     and     corporations     in     China remain      challenging.      There     are     early     signs     of     some     consolidation     within the         China         property         sector         that         has         witnessed         a         sever         correction. Ultimately    the    central    bank    in    China,    the    PBoC    will    need   to   continue   their stimulus    program,    become    a    little    more   innovative   with   their   policy   and   try to     turn    around    investor    and    consumer    confidence    in    mainland    China.    On the     positive     side,     the     lower    inflation    data    coming    out    of    China    is    positive for     other    key    global    economies.    Within    the    broader    APAC    region,    Japan, India      and      the      South-east      Asia     region     (including     Australia)     will     continue attract      investors      as      China      works     through     their     much     needed     economic stimulus and reforms.

We          continue          to         maintain         underweight         exposure         to         China         and         an overweight      to      South-East      Asia      and     Australia.     A     focus     on     earnings     that export    to    China    continues    to    be    our   preferred   investment   strategy   as   they look      at      additional     stimulus     going     forward.     The     portfolio     cash     position     is marginally lower at 5.1%.

Performance Commentary - June 30, 2023

The K2 Asian Fund returned -0.68% for the month to be -0.62% year-to-date (YTD).

The stalled economic recovery within China continues to weigh on market sentiment for the worlds second largest economy. While key developed economies, led by the US, continue to exhibit resilience in economic momentum and aggregate corporate earnings, many challenges persist for the China as they try to stimulate their economy.

The central bank in China, the PBoC has continued to do a significant amount of the stimulus to date and has been proactively lowering interest rates to help drive a more sustainable recovery. However, both household and business sentiment in China continue to remain weak. This is partly due to the aggressive corporate clampdowns in the March quarter of 2021, combined with the relatively high youth unemployment rate and their notably large property sector challenges.

Beijing is looking to become more innovative and recalibrate and adjust their policy mix to stimulate economic activity. Some longer-term reforms on first glance look pragmatic. This includes China rolling out several economic reforms to address structural issues, including reducing reliance on exports, promoting domestic consumption, and improving their business environment.

However, in the shorter term it has proved difficult to attract global investors for long duration investments. This is clearly a critical area they need to address and the recent open dialogue with US officials is an early and welcomed sign of some commitment to resolve many different trades issues.

Within the broader APAC region, Japan, India and the South-east Asia region (including Australia) will continue attract investors as China works through their reforms.

We continue to maintain underweight exposure to China and an overweight to South-East Asia and Australia. A focus on earnings that export to China continues to be our preferred investment strategy as they clows look at additional stimulus going forward. The portfolio cash position is marginally higher at 7.8%.

Performance Commentary - May 31, 2023

The      K2      Asian      Fund      returned      -1.34%      for      the      month      to      be     flat     (+0.1%) year-to-date (YTD) in a volatile market. The     investment     outlook     with     the     APAC    region    continues    to    exhibit    some unevenness     across     economic    momentum    and    the    earnings    outlook.  

 The largest    surprise    has    been    the    slowdown    within    China,    the    second    largest economy,      so      soon     after     a     very     robust     reopening.     The     slowdown     in     the various     partial     economic     indicators     for     China     has     been    a    surprise    given the      previous      strong      tailwind      associated     with     their     reopening     trade     from last year. Within    the    South-East    APAC    region,    it    is    a    little    different    as   there   is   some resilience            to            economic            momentum           despite           the           tighter           monetary conditions.    There    is    a    clear    global    slowdown    underway    which    is   the   clear result     of     restrictive     monetary     conditions     within     many     economies    as    they address the stubborn, but falling, inflationary conditions.

Despite     the     slowing     momentum,     corporate     earnings    have    not    slowed    as much     as     anticipated     and     have     surprised     expectations.    This    resilience    in corporate    margins    (aggregate)    imply    that    the    slowdown    ahead    will   not   be as      bad      as      previously      thought.      Markets      are      simply     looking     through     this slowdown,    or    shallow    recession   in   some   regions,   and   pricing   the   recovery in 2024 and beyond.

The     key     challenge     within    our    region    will    be    the    outlook    for    China.    Unlike other      key      economies      they      have      been      cutting      rates     and     do     not     have     a severe      inflation      problem.      Despite      the      PBoC      cutting      rates      for     well     over 18-months,      the      slowdown      in     activity     is     concerning.     Once     Beijing     adjust their       policy       mix       and       get      through      their      property      market      correction      and address       the      very      soft      business      and      consumer      sentiment,      they      will      be better placed to drive more sustainable but lower economic growth rate.

The     largest     beneficiary     of     the     slowdown     in     China     economic     momentum following    their    extended    lockdown    policy    is    the   re   allocation   of   investment towards the South-east Asia region (including Australia) and Japan. We          continue          to         maintain         underweight         exposure         to         China         and         an overweight      to      South-East      Asia,      Australia      and     NZ.     A     focus     on     earnings that      export     to     China     continues     to     be     our     preferred     investment     strategy. The portfolio cash position is 4%.

Performance Commentary - April 30, 2023

The        K2        Asian        Fund        returned        +0.26%        for        the       month       to       be       +1.43% year-to-date.        Market        conditions        within        the        APAC        region        continue       to remain      mixed      which     has     been     reflected     in     the     uneven     nature     of     partial economic       indicators       and       the       differences       in       the       policy       response.       The global     backdrop    year-to-date    can    be    summed    up    as    resilient    vs    previous expectations         for         a         deep         economic         recession.       

While        conditions        are slowing,       aggregate       corporate       earnings       have       not       slowed       as       much      as anticipated.    Companies    are    trying    to   protect   their   margins   and   prepare   for the       upcoming       economic       recession.       To       date      the      slow      down      is      not      as severe as expectations six months ago. Consensus       expectations       for       the       downside       to      earnings      for      2023      have improved      but      will     still     be     negative     (circa     minus     8-10%     range)     for     2023. This    is    off    a    higher    corporate    earnings    base    in    2022    and    also   reflects   the ability        for        the        corporate        sector        to       pass       on       higher       prices       to       date       to consumers.       The       tight       labour       market       has       helped.      There      are      plenty      of challenges      ahead,      particularly      the     stubborn     services     inflation     which     will imply        monetary        policy       will       remain       restrictive.       Higher       rates       for       longer combined        with        ongoing        quantitative        tightening        will       lead       to       additional contraction      ahead,      particularly      the     price     credit     market.     Looking     through the        second        half        2023        contraction,        markets        are        pricing        in        the       2024 recovery    profile.   

The    challenges    will    continue    to   be   the   policy   response   to address inflation. The    second    largest    economy,    China   has   a   different   set   of   challenges.   The PBoC      has      been      cutting      rates     for     well     over     18-months     and     they     do     not have    the    same    inflation    concerns    as    many    other    key    developed   markets. However,     they     are     dealing     with    a    notable    slowdown    in    economic    activity compared    to    expectations    and    the    consequences    of    their    property    sector correction.      Never-the-less,      the      ongoing      opening      of      their      economy      will continue      to      assist     cushion     the     downside     risks     to     global     growth     as     their economy    increasingly    relies    on    domestic    demand    as   a   larger   contribution to    growth.   

The    largest    beneficiary    of    the    extended    China    lockdown   policy in    recent    years    is    the    re    direction    of   global   investment   into   the   South-east Asia region and also the Japanese equity market. We          continue          to         maintain         underweight         exposure         to         China         and         an overweight      to      South-East      Asia,      Australia      and     NZ.     A     focus     on     earnings that        export        to       China       has       been       our       preferred       strategy       for       the       China reopening trade. The portfolio cash position is just above 5%.

Performance Commentary - February 28, 2023

The       K2      Asian      Fund      returned      -1.48%      for      the      month      outperforming      the index      by      +0.53%.     Following     recent     strong     performance,     global     markets consolidated     as     investors     continue     to     digest    the    weekly    global    data    flow for      signs      of      improved      inflation     signals     to     better     understand     the     interest rate outlook. Economies     in     the     west     continue    to    navigate    the    stubbornly    high    inflation outlook.       

Good        signs        continue        via        various        data        points       that       reinforce “goods”        inflation        continues        to        fall.        However,        the        services       portion       of inflation    remains    too    high    for    central    bank    policy    makers.   The   tight   labour market    has    effectively    supported    the   services   side   of   the   economy   and   as a     consequence,     wage     indicators    have    remained    elevated    and    a    concern for policy makers. Given    the    higher    for    longer    inflation    outlook,    central    bankers    -    led    by   The Fed        -        will        continue        to        remain        hawkish        with        their        commentary.       The alternative     of     tolerating     higher     inflation     is     very     sub    optimal    for    investors, the       corporate      sector      and      households.      A      delayed      response      to      inflation implies           a          much          higher          unemployment          rate,          contracting          economic conditions and negative earnings and credit conditions. Economic     conditions     within     China    are    on    a    different    trajectory    compared to     other     key     economies.     While     the    China    re    opening    narrative    has    been mixed,        the       economic       momentum       continues       to       improve       in       aggregate. China       domestic      demand      will      continue      to      be      a      larger      portion      of      China GDP.

     Further,      the      inflation      rate      in      China     is     notably     lower     compared     to most      of      the      world      allowing      their      central      bank      -      The     PBoC     -     to     remain supportive     and     stimulatory.     Concerns    in    China    remain    with    regard    to    the property       correction       and       finding      a      reasonable      resolution.      This      includes some     government     and     PBoC     support     for    funding.    The    aim    is    to    improve bad    and    doubtful    debt    provisions    and    attract    additional    funding    to    try   and improve    investor    sentiment.    While    Beijing    has    worked    to    improve   internal capital     flow,     the     key     concern     is     the     ability     for     China     to    attract    long    term global      capital.      While     some     short     term     investments     are     occurring,     many global       pension       funds       continue       to       lower      their      duration      investments      on mainland     China.     This    has    further    supported    the    South-East    Asian    region as a notably alternative for investors. We          continue          to         maintain         underweight         exposure         to         China         and         an overweight to South-East Asia, Australia and NZ.

Performance Commentary - January 31, 2023

The       K2       Asian       Fund       returned       5.96%      for      the      month      outperforming      the index by +2.15% in January. The      equity      market      rally      reflects     markets     are     more     comfortable     that     the downside    risks    in    2023    will    not    be    as    bad    as    previously    thought.    The   key economic         data         updates         in        recent        months        have        continued        to        show evidence    of    improving    economic    conditions    versus    previous   expectations of    a    hard    recession.   

The    improvement    in    expectation    is    reinforced    by   the resilience     of     key     developed     market     economies     despite     the     tightening     in monetary policy. Hence the market volatility has subsequently fallen. In       particular,       the       resilient       labour      market      conditions      and      the      continued lower       inflation       inputs       from      recent      highs      have      been      key      drivers      in      the recent       rally.       The      higher      cash      rates      are      creating      the      required      demand destruction    and    economic    pain    that   the   central   banks   have   been   targeting which     has     led     to     the     lower    inflation    prints.    Although    it    is    notable    that    the services inflation is stubbornly high the goods inflation is falling.

The     repricing     of     the     downside     risks     has     also     been     evident     in     the    better earnings    outlook    in    the    US    (aggregate)    downside.    Credit    conditions   have also     remained     in     good     condition     despite    the    slowdown    and    impairments remain     at     near     cycle     lows.     While     there     is     more     tightening    to    come    from global       central       banks       they       are       slowing       the       pace       of       rate      hikes      as      we approach    peak    cash    rate    cycle.    In    anticipation,    long    bond    yields   continue to fall maintaining the yield inversion.

The    continued    fast    track    opening   of   the   China   economy   following   years   of persistent      lockdowns      will      be      a      net      positive     for     global     growth     this     year. There     is     targeted     stimulatory     policy     and    the    internal    economic    activity    in itself         will        be        a        key        economic        driver        for        the        worlds        second        largest economy.     The     recovery     of     the     China     economy     will     also     benefit     key     EU based        economies        companies        that        are        correlated.       Also,       the       targeted support     for     their     housing     sector     from     funding    rates    to    developer    support has     gone     a     long    way    to    assist    in    improvement    of    sentiment.    Importantly, South-East     Asian     economies     and     companies     are     beneficiaries     of    global trade. We          continue          to         maintain         underweight         exposure         to         China         and         an overweight       to       South-East       Asia,       Australia       and       NZ.       The       portfolio      cash position is around 10%.

Kind words from Aussies managing
their own self funded futures

  • SMSF Mate is a unique website because it has ideas about how to approach SMSFs, insurance and other financial topics that come straight from first hand experience. It's much more useful than what you find on all the other financial websites that just offer generic info that you could easily get on the ATO's website. It's also nice to know there's no financial incentive behind the information, it's legitimately there to help people understand self-managed super funds and how to get the most out of them, not to get an affiliate commission from a broker or other financial services provider. The investment product information is also incredibly useful, I've never seen this kind of functionality on any other website that let's you look at such a wide range of products, sort by what info is most interesting or important to you, and subscribe to updates for different funds and financial products all in one place. Definitely worth checking out if you own or are considering an SMSF!

    David G, Self-Employed, SMSF Owner
  • SMSF Mate provides a unique insight into superannuation and financial topics in a way that is easier to understand than conventional websites. The colloquial nature of the site makes it easy to understand and they often speak about complicated topics in lamens terms so I can wrap my head around them. The investment product information is a great way to research funds that I am interested in investing in with my SMSF and there is a lot of helpful information on the site for better structuring my investment portfolio. In comparison to other websites which offer similar information, SMSF Mate excels as the information is free to access whereas many other sites charge a subscription fee for the same thing. Overall, I think SMSF Mate is a great resource for SMSF trustees and is worth looking at for a variety of super-related topics. Thanks.

    Tim B, Business Owner, SMSF Trustee