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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 net risk exposure was 4.0% while gross exposure was 67.2%. Long investments returned -0.58% while short investments returned 0.04%. The Manager notes 'that the nature of leadership in the Australian equity market is starting to change....in an encouraging manner. The 'great rotation' out of bonds into equities appears largely done. The blind chase for equity yield, irrespective of the payout ratio, earnings valuation or quality of that yield, seems less frenetic. While the effects of financial repression continue to ripple through all asset markets, local equity investors seem slightly more discriminating. Single day post-downgrade price collapses of 26% (Worley Parsons) and 22% (QBE) remind us that stocks can be dangerous to hold at any time. The massive flood of corporate equity issuance (much of it from Private Equity vendors) has led to some real indigestion: of the 13 IPO deals so far this quarter, five (39%) are now trading underwater.' |
| More Information | » View detailed profile of this fund |
