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| Fund Overview | In a typical environment the Fund will hold around 70 stocks comprising 35 pairs. Each pair contains one long and one short position each of which will have been thoroughly researched and are selected from the same market sector. Whilst in an ideal environment each stock's position will make a positive return, it is the relative performance of the pair that is important. As a result the Fund can make positive returns when each stock moves in the same direction provided the long position outperforms the short one in relative terms. However, if neither side of the trade is profitable, strict controls are required to ensure losses are limited. The Fund uses no derivatives and has no currency exposure. The Fund has no hard stop loss limits, instead relying on the small average position size per stock (1.5%) and per pair (3%) to limit exposure. Where practical pairs are always held within the same sector to limit cross sector risk, and positions can be held for months or years. The Bennelong Market Neutral Fund, with same strategy and liquidity is available for retail investors. |
| Manager Comments | The Fund performance featured an event split of winning and losing pairs. The two strongest contributors to performance were pairs in Energy and Healthcare driven by short positions in Santos and Primary Health Care. On the negative side, the Fund's position in a building materials pair detracted from performance as the long side (James Hardie) disappointed. Portfolio positioning over the month featured several modest adjustments to portfolio weightings, as well as the introduction of a new position in the healthcare sector. Click below to read the Fund Manager's commentary and future market outlook. |
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