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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 | The Fund's primary positive driver of returns in May were the resources stocks. Notable positive contributors included BHP, NuFarm, Atlas Iron, Lynas and Super Retail Group (since exited), along with the Fund's continued short exposure to select banking and building material stocks. Two long positions dragged significantly on the portfolio's overall performance - Link and AHG. Short positions in interest rate sensitive stocks were a modest drag on the May result, though ARCO noted they continue to see increasing downside risk to the price of these stocks and retain their short exposure. ARCO also initiated a position in Fairfax Media and JB Hi-Fi during the month. ARCO continue to spend a significant amount of time researching the impact of a much more difficult credit environment on the local economy and the markets, not only to re-test their view on banks but also in recognition of the many multiplier effect on local stocks; they believe it is difficult to imagine that property prices will not take a material hit. ARCO's broad view by month end was that market headwinds are building again and so, consequently, have moved the portfolio risk settings to a modest net short market exposure. |
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