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| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| 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. *Formerly the Optimal Australia Absolute Trust |
| Manager Comments | In February, the Fund's long portfolio recorded its first negative month and the short portfolio gave back some of its January gains. ARCO noted they ended the month with a neutral market exposure, and that they believe the local equity market has a downward bias. ARCO further diversified the Funds long positions, extended their exposure to Index Futures as additional portfolio 'insurance' and remain busy with short-theses as prices track back to an unhealthy premium to their fair value. The Fund continues to focus on minimising investor drawdown exposure, the risks for which ARCO believe are steadily rising. ARCO maintain that the best days of passive beta are behind us in this cycle and that too much money is placed on the same equity 'bets' with global inflation and interest rates trending upward. They believe more volatility spikes are the likely outcome looking forward. ARCO continue to look at market data pointing to a local property market correction that is already underway, with specific reference to a slump in residential building approvals, declining consumer sentiment and still-falling credit supply as recent economic indicators of this. |
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