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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 Manager notes 'Markets may well need to reacquaint themselves with elevated volatility for some time, given a fundamental change in the direction of monetary policy, in the start of 'tapering' of bond buying by the US Federal Reserve. Central bank intervention (via both liquidity creation and 'fixing' bond rates) has driven equity market pricing to some very strange extremes. While 'tapering' may have started small, and its future pace will depend on the economy, it is still a major change in a policy which has been unequivocally favourable for asset prices and which, having started, is unlikely to be reversed, absent a major growth shock. This dynamic also throws the focus squarely on to growth. Logically, for share prices to advance, higher growth will be required to offset higher discount rates. Australia of course marches to the beat of a different drummer. We did not have emergency liquidity creation, nor have we (yet) had an economic crisis, and our growth rate seems unlikely to march sharply upwards in view of structural constraints.' |
| More Information | » View detailed profile of this fund |
