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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's monthly report comments that 'Despite a stronger market in February, 2014 still strikes us as less about a one-way bet on equities and the impact of ultra-low interest rates on risk assets, and much more about stock selection and risk management. More volatility should be expected, and hopefully more differentiation in stock performance within the index. We are seeing more of the former, but so far not too much of the latter. When we do see sporadic market weakness, the default investor reaction is to sell resources and materials stocks, and buy defensives and financials at almost any valuation. This mindset is somewhat scary. There is no doubt that infrastructure stocks, as one example, generate cash flows with low volatility from quality assets. But their valuations are highly sensitivity to discount rates, which are rising, so these types of stocks are far from low-risk right now. That they are seen as so "safe" (with unfranked yields now under 5%, in some cases) seems to again point a gradual de-sensitisation towards risk, which is of course the objective and consequence of extended financial repression. As risk-averse investors, we remain profoundly suspicious of a world where equities win because they are the least bad alternative: the TINA (There Is No Alternative) doctrine.' |
| More Information | » View detailed profile of this fund |
