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| Fund Overview | The Fund consists of a concentrated long/short portfolio typically comprising 30 to 40 ASX300 listed stocks, generally with a long bias aligned to the overall market direction. There is a slight bias to large cap stocks in the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 10 to 15% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. |
| Manager Comments | The Australian equity market remained under pressure in June, with the All Ordinaries Accumulation Index falling 2.62%. Potential near term QE3 withdrawal and concerns over liquidity conditions in China increased the volatility of financial markets. US economic data signaled a continued recovery with indicators of US business investment and manufacturing generally stronger. Despite disappointing domestic economic data and further falls in commodity prices, the Reserve Bank of Australia left the official cash rate unchanged at 2.75%. Defensive sectors continued to outperform cyclicals, whilst large caps (-1.9%) significantly outperformed small caps (-7.5%). Long positions in EBOS (New Zealand listed), JB Hi-Fi, CSL and a short position in Share Price Index Futures contracts (hedging long positions) were the largest positive contributors, whilst long positions in Henderson Group, NAB and Suncorp were the largest detractors. Net equity market exposure remained relatively steady at 35.5% including derivatives (46.7% long and 11.3% short). |
| More Information | » View detailed profile of this fund |
