6 months to December 2015 – a brief review
The Montgomery business comprises four products. The two domestic products The Montgomery Fund (TMF) and the Montgomery [Private] Fund (MPF) are lead by Tim Kelley and Russell Muldoon, respectively.
The Montgomery Fund was launched on 17 August 2012 and up to 31 December 2015 The Fund delivered its initial investors an absolute return of 80.71 per cent, after expenses. This assumes reinvestment of distributions, and equates to a compound annual return of 18.9 per cent. Over the same period, the S&P/ ASX 300 Accumulation Index recorded an absolute return of 40.79 per cent, a compound annual return of 10.5 per cent.
The Montgomery [Private] Fund has just celebrated its fifth anniversary and over that timeframe it has delivered its initial investors an absolute return of 88.58 per cent, after expenses. This assumes reinvestment of dividends, and equates to a compound annual return of 13.5 per cent. Over the same period the broad market, as measured by the S&P/ ASX 300 Accumulation Index, has put on 36.65 per cent, a compound annual return of 6.4 per cent.
I am pleased to report both The Montgomery Fund and the Montgomery [Private] Fund have performed exceptionally in a tough market, particularly over the last year or two. Investment returns (after expenses) follow.
| Period to 31 December 2015 | TMF Investment Return | MPF Investment Return | S&P/ ASX 300 Accumulation Index |
| 6 months | 12.74% | 13.96% | -0.35% |
| 12 months | 19.35% | 20.16% | 2.80% |
| 2 years (annual) | 14.79% | 16.50% | 4.04% |
Our two global products, the Montgomery Global Fund (MGF) and Montaka are lead by Andrew Macken and Christopher Demasi. Both the Montgomery Global Fund and Montaka share the same “long” (or buy) positions, which currently number 23, however Montaka also currently has 37 “short” (or sell) positions in companies which own businesses we believe are deteriorating.
The Montgomery Global Fund and Montaka were launched on 1 July 2015 and in the six months to 31 December 2015, world stock markets, as measured by the MSCI World Net Return Index in Australian Dollars, were up by 1.09 per cent.
The Montgomery Global Fund delivered its initial investors a return of 3.01 per cent, outperforming its benchmark by 1.92 per cent, after expenses.
Most pleasing has been Montaka’s start. In the six months to December 2015 Montaka’s general class investors received a return of 15.63 per cent after expenses. Special mention should be made of the excellent performance during the particularly turbulent September 2015 Quarter.
As many of you know, the Montaka Global Fund was originally designed for wholesale investors, and then in October 2015 we introduced the Montaka Global Access Fund, which has a minimum $50,000 initial investment and feeds directly into the Montaka Global Fund.
For the two months since inception the Montaka Global Access Fund has delivered investors 0.86 per cent, net of fees, versus a decline in the MSCI World Net Total Return Index by 4.14 per cent in Australian dollar terms.
Next subscription date
Investors who wish to invest in the next monthly opening for the Montaka Global Access Fund, should have their application form and funds in with Fundhost, the Fund’s administrator, five business days prior to the first business day of the ensuing month. The cut-off date for the Tuesday 1 March 2016 subscription date is Monday 22 February. To download the PDS and Application form click on this link.
If you have any questions regarding Montgomery’s products, please contact me at dbuckland@montinvest.com or on 02 8046 5000.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
joe
:
Hi Roger,
There appears to be a conflict between your assessment of the Montgomery fund performance and Morningstar’s ratings / assessment.
e.g. global fund performance over 6/12 rated as -3.46%
Montgomery fund rated as 4stars (in the top 22.5% NOT 10%) over 1& 3 year periods with returns of 12.48 & 12.92% annual which is different from the claims made by this website.
Can you please clarify the discrepancy.
Thanks,
Joe
Roger Montgomery
:
Hi Joe,
Not sure wether you are getting your numbers. We just looked at Morningstar’s data and they don’t correspond to the numbers you provide. Our are audited and correct and independently verifiable.
Andrew
:
Well here’s some more benchmarking for you. I switched my super over to Netwealth in late October 2015. Through that platform I own some (but not enough) TMF units. These have done very well for me – Thank you. Unfortunately Netwealth don’t yet give access to Montgomery Global, or the Montaka funds. They explained that these funds haven’t been around long enough to be rated, but they’ve got their eye on them.
So, in search of some exposure to international equities I chose their two top-rated funds – Magellan Global, & MFS Global Equity Trust. These have “returned” me: -4.6% & -6.37% respectively. I know it’s long-term & I need to be patient but the difference is interesting to say the least.
Roger Montgomery
:
Thanks for the encouraging words Andrew. We’re working on it.
Brian Aitken
:
Congratulations on the great returns in TMF, in which I have been invested from day one. I’m now also invested in The Montaka Fund and am excited at the return prospects, having followed Roger for a number of years he has a great record on picking the future trends of various sectors of the market & also some of the listed shares. I was happy I followed Roger’s advice on the mining sector 3 or 4 years ago & got out of the stocks in the mining services sector. Thanks for opening that to the retail investor. I have total confidence in you & your team Roger. I found it easier to let you do the stock picking through TMF, rather than trying to pick the stocks myself. Once again thanks for the great returns to date.
Roger Montgomery
:
Hi Brian,
The best picks are the people now comprising the research and investment teams at Montgomery. They are impressive, hard working, intelligent, considered and true to label value investors.
Tony
:
hi Roger,
have you considered listing on the ASX similar to Warren Buffet’s Berkshire Hathaway?
Roger Montgomery
:
I have considered it and elected not to.
Richard Endersbee
:
Hi guys, given the index is a bit of a mess in Aus, do you benchmark yourselves against other fund managers with similar return objectives and how do your returns compare with others running similar portfolio’s?
Roger Montgomery
:
Hi Richard, We actually know the returns of every other fund manager through Morningstar. We are a top decile manager and even rank in the top three or five depending of course on the time frame you choose.
Kelvin Ng
:
Well done Roger and team! That’s impressive.
Kelvin
ian
:
David
Your success to date is the difficulty in investing now in your funds. If you can’t find attractive opportunities to invest in now, it must mean that the companies currently owned by your funds are no longer attractively priced (otherwise I assume you would still be buying them).
This means if a new investor invests money into your funds, 80% (roughly) of this money is in effect purchasing shares in companies that are no longer attractively priced.
While your results are great for current investors, it seems to be a Catch-22 situation for new investors.
David Buckland
:
Thanks Ian for your observation.
Speculators might like to chase those “blue chips” we have avoided – which are currently priced at eleven year plus lows.
However as an investor, you may want to consider our Montaka offering, which offers defensive characteristics.
The Montaka Global Fund delivered a return of 15.63 per cent, after expenses, for the six months to 31 December 2015.
For some context, the world share markets, as measured by the MSCI World Net Total Return Index in Australian Dollars, was up 1.09 per cent over the same period.
Chris
:
Roger,
So far, what I am reading in the mainstream press (ex-Roger Montgomery) for some sort of guidance is “2015 in review…2016 outlook is more of the same as what we just saw“.
What, that the ASX finished the year where it started ? Is that really the best that everyone else can do ?
To me, that is the laziest, most ‘cop out’ ridden piece of financial analysis I have ever read, that I should expect “Groundhog Day”.
Most years, people have at least had the guts to make a guess at where the dollar and where the ASX will be at year’s end, but not yet. I guess no one is brave enough yet.
David Buckland
:
What surprised me Chris is the consensus hasn’t called for a 10-11 per cent boost in 2016.
According to Dimson, Marsh and Staunton, academics from the London Business School, that is the annual average investment return for the Australian share market since 1900.
These guys also claim one year in four, on average, is negative. (My experience is its usually two consecutive years out of eight).
Despite the pullback in the Australian market from approximately 6,000 points to 5,000 points, we believe attractive opportunities remain hard to find, and with limited appetite to invest in lesser quality companies we
continue to sit on at least 20 per cent cash.
Henry
:
I’m pleased to see this David.
How about the return of the Montaka global access fund?
David Buckland
:
Hi Henry, the Montaka Global Access Fund did very well on a relative basis over the two months to 31/12/15.
“For the two months since inception the Montaka Global Access Fund has delivered investors 0.86 per cent, net of fees, versus a decline in the MSCI World Net Total Return Index by 4.14 per cent in Australian dollar terms”.