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| Fund Overview | The Fund focuses on fundamental long and short investments. The Fund may utilise a multi-strategy approach if short term opportunities to increase returns, hedge the portfolio, protect capital or minimise volatility are found. The Fund is a high conviction fund and the combined portfolio will typically have 25-45 positions, investing primarily in stocks in the ASX200. The Fund may be net long, short or neutral depending on the strategies employed at the time. The Fund may hold cash so that it is in a position to take advantage of market volatility and compelling investment opportunities as and when they arise. The Fund may be geared up to 200% gross long or short and up to 150% net long or short. |
| Manager Comments | The Fund returned 9.83% net of fees during April 2013. This compares with the benchmark return of 0.25%. Average gross capital employed by the Fund was 178.0% long and 48.5% short. Average net exposure over the month was +129.5%. At the end of the month the Fund had 33 long positions and 11 short positions. The Fund’s biggest exposures at month end were spread across the consumer discretionary, financials, telcos, industrials and materials sectors. The Fund had an unusually strong month in April. The Manager would caution investors against any expectation of monthly returns in this order of magnitude. A significant portion of the monthly return was due to the Fund’s overweight exposure to companies with strong competitive advantages and sustainable earnings that provide investors with a good dividend yield and growth that is anticipated to exceed inflation over coming years. These investments performed very strongly during April,and while the Manager expects them to continue to contribute positively to the Fund over the next few years, one should not expect the sort of monthly capital gains experienced in April. The other main contributor to the Fund’s performance was a short position across a small number of gold stocks that have constituted at most around 10% of the Fund’s capital at any point during the month. It is very unusual to have a few positions that move in line with expectations as quickly as they did during the month. Between the start of the month and the middle of the month, when the short positions were closed, the average price fall across these positions was 34% and provided the Fund with a positive 2.8% return. |
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