Bennelong Funds Management

Methodology

Investment philosophy

Investing is an evolutionary process, enhanced by recognising mistakes and learning from them. Kardinia's investment philosophy is to combine flexibility with focus. A non-rigid investment process enables the team to adapt stock picking to best suit varying market conditions, whilst commitment and focus enables them to leverage their wealth of experience and unique strengths in the absolute return sector.

Investment process and strategy

Kardinia's stock selection process focuses on four major areas:

• analysis of the macroeconomic environment to identify key investment thematics and trends. Macroeconomic considerations also have a major influence on the level of net market exposure;
• analysis of the company and its operating environment;
• quality of management; and
• valuation and technical analysis.

The strategy is to achieve the investment objectives within a robust risk management framework, employing conservative gross and net exposure limits, aided by stop-loss limits and the occasional use of derivatives to hedge physical positions. The strategy does not use financial leverage.

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