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| Fund Overview | The Fund's bias is likely to be net long under normal market conditions, with the core strategy being to construct a portfolio of listed equity securities priced at levels that do not adequately reflect their underlying value. The Fund will seek to boost returns and limit potential market downside by selective short selling of individual stocks which are priced at levels that are viewed as materially above their underlying value. The Fund will also use certain trading strategies both within its core portfolio (through rebalancing stock weights and overall market exposure in response to price movements) and in certain other situations (typically of a shorter-duration and/or opportunistic nature) with the objective of further increasing returns. |
| Manager Comments | The fund's risk statistics are notable. Downside capture ratios are -0.11, -0.12 and -0.22 over the last 12, 24 and 36 months respectively indicating that, on average, the fund has positive returns when the overall market is negative. Specifically, the fund has had positive monthly returns of 0.33%, 0.39% and 0.48% when the market is negative over the previous 12, 24 and 36 months. The Manager comments that it is certainly possible that equities will remain the 'best of a bad lot' from an asset allocation perspective, which may drive additional money flows and further price gains. However, in the Manager's view, equity valuations in Australia are essentially unattractive for a market which will likely follow any progressive, US-led normalisation of long bond rates, but which has vastly less certainty over earnings growth. There will always be opportunities for the fund at a stock level, especially through what appears likely to be a challenging earnings season. From this juncture ― featuring elevated volatility, high valuation, a questionable growth outlook, a risk that yield curve normalisation turns disorderly, and thus significant capital risk ― the Manager continues to favour a low net exposure, hedged approach to managing the fund's capital. |
| More Information | » View detailed profile of this fund |
