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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 as a Listed Investment Company (LIC) on the ASX. |
| Manager Comments | Bennelong noted Fund volatility continued to settle down in April. At the sector level Consumer Discretionary was the strongest contributor and Healthcare was the greatest detractor, with both similar in magnitude. More than half of the Fund's pairs were positive, with both positive and negative pair returns generally muted. Top pairs included long Magellan / short Perpetual and long Caltex / short Viva Energy. The worst performing pairs included long Ramsay Health Care / short Healius and long Challenger / short IOOF/ANZ. |
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