What to do with the Aussie Banks?

September 26th, 2016

Aside from employing over 200,000 Australians and touching every sector of the Australian economy, the four major banks plus the two regionals comprise 25% of the ASX200 and are the four largest stocks listed on the ASX with a combined market value of A$380 billion. Assessing future prospects for the major banks is currently one of the biggest issues facing Australian equity fund managers and retail investors alike. Indeed over the past week the in the financial press there have been articles  advocating a zero weighting to banks and another one on Tuesday morning recommending that bank shares are historically cheap and should be scooped up with abandon. We see that the current investment case for the banks lies between these two extremes.

After several years of delivering strong profit and dividend growth, primarily due to the tailwind of declining bad debt charges, in 2016 bank share prices have been sold off, with most of the pain falling on the two banks most heavily weighted to domestic housing,  Westpac (-8%) and Commonwealth Bank (-10%).  Paradoxically in the current yield-hungry environment, ANZ has been the best performer, despite cutting its dividend in May. In this piece we are going to look at the causes of this correction and some thoughts for the future.

Read more here.

ABW Explanatory Memorandum

September 21st, 2016

The directors of the responsible entity unanimously recommend that you vote AGAINST all of the resolutions.

Read the full Explanatory Memorandum here.

REITs – Hugh Dive on ShareCafe

September 20th, 2016

Hugh Dive discusses REITs on ShareCafe.

Shorting – Hugh Dive on ShareCafe

September 20th, 2016

Hugh Dive discusses Shorting on ShareCafe.

HHY Explanatory Memorandum

September 15th, 2016

The directors of the responsible entity unanimously recommend that you vote AGAINST all of the resolutions.

Read the full Explanatory Memorandum here.

Australian insurers face a tough three-year outlook

September 12th, 2016

Written by Vesna Poljak  of the Australian Financial Review.

“That’s no different to what’s happening to the former supermarket duopoly, says fund manager Hugh Dive from Aurora Funds Management. “What’s a bigger issue for me which hasn’t really been focused on in the market is Suncorp and IAG are facing market share losses through a bunch of challenger brands. It’s a bit like what’s going on in grocery. The higher margins have given the Aldis of their world more oxygen and the ability to nibble away at market share,” he says.”

Read more here.

AFARF Explanatory Memorandum

September 9th, 2016

The directors of the responsible entity unanimously recommend that you vote AGAINST all of the resolutions.

Read the full Explanatory Memorandum here.

Daily applications and redemptions reinstated

September 8th, 2016

Aurora Funds Management Limited (“Aurora”) is pleased to announce that daily applications and redemptions will be reinstated for the Aurora Fortitude Absolute Return Fund and the Aurora Absolute Return Fund. The daily application and redemption facility is available from 8 September 2016.

Aurora Fortitude Absolute Return Fund

Aurora Absolute Return Fund

Reinstatement of Liquidity & Antares Convertible Note Update

August 31st, 2016

Aurora Funds Management Limited (“Aurora”) provides the following update in respect of the Aurora Fortitude Absolute Return Fund (the “Fund”).

Antares Convertible Note Update

As at 30 June 2016, the Fund held investments in Antares Energy Limited Convertible Notes (ASX: AZZG), which had been suspended from trading on the Australian Stock Exchange on 15 September 2015 and remain suspended as at the date of this update.

In February 2016, Aurora made the decision to freeze applications and redemptions in the Fund, on the basis that it could not accurately determine a value for the AZZG Notes.

For the purposes of the June 2016 year-end financial statements, and after careful consideration of all of the available information, Aurora has formed the view that the AZZG Notes should be recognised at a nil value.

Aurora Global Income Trust update (AIB)

Aurora Fortitude Absolute Return Fund (AFARF)

Aurora Absolute Return Fund (ABW)

Reporting Season Snakes and Ladders

August 31st, 2016

During the months of February and August, the majority of Australian listed companies reveal their profit results and most provide guidance as to how they expect their businesses to perform in the upcoming year.  Whilst we regularly meet with companies between reporting periods to gauge how their businesses are performing, during reporting season companies open up their car bonnets to enable investors to have a detailed look at their company’s financials. Until this happens, investors don’t know for certain whether smoke is going to pour out (and receive a scornful look from the girl in red below) or find out that the growth engine is humming along.

Today marks the final day of the August 2016 reporting season and companies have until the end of the day to report their financials. In this piece we are going to run through the key themes that have emerged over the last four weeks.

Read more here.

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