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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 | Strongest contribution came from two of the Fund's pairs in the Healthcare Sector, driven by short positions in Primary Healthcare and Sonic Healthcare. On the negative side, the Fund's position in two energy-related pairs were impacted by continued volatility in the oil price and associated share prices. Overall, performance across the portfolio featured positive contributions from 21 pairs while 10 pairs were a loss. Fund activity in December involved some relatively minor weightings adjustments across the gaming, consumer discretionary, and financials sectors. Click below to read the Fund Manager's commentary and future market outlook. |
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