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| Fund Overview | The investment objective is to deliver regular and stable income stream (from ASX20 dividends) in a low interest rate environment with capital security - a 'highly-defensive' asset class. Gyrostat has operated for 38 consecutive quarters within a 'hard' pre-defined risk parameter (no more than 3% capital at risk with the Fund's maximum draw-down 2.2% in any circumstances) always in place, delivering regular income by passing through ASX-20 dividends, and meeting returns guidance based upon market conditions (demonstrating increasing returns with market volatility). The Fund buys and holds ASX-20 and international assets with lowest cost protection always in place with upside. It is a conservative asset allocation. Note that Gyrostat have expanded their international assets within the Fund to include SP500, FANGS, Nikkei, Hang Seng, MSCI China, MSCI Developed and Developing markets. Advances in investment risk management enable cost-effective protection to always be in place for a 'hard' defined risk parameter (say no more than 3% capital at risk). Returns are designed to increase as volatility levels increase, as this provides more opportunities to lower protection costs. Investment Objectives: - Returns: 6% - 8% pa in trending markets, greater than 8% pa in volatile markets, BBSW90 + 3% in stable markets - Income: Minimum cash rate + 3% paid semi-annually (currently 4.0% p.a.) from dividends and franking credits - Protection: No quarterly NAV draw-downs exceeding 3% Also includes a 'tail hedge' for gains on large market falls. |
| Manager Comments | The Fund also includes a 'tail hedge' for gains on large market falls. This was particularly beneficial to the Fund during February (Fund: +3.27%, ASX200 TR: -7.69%) and March (Fund: +5.80%, ASX200 TR: -20.65%), and contributed significantly to the Fund's outperformance over the Financial Year. Gyrostat noted market conditions in June enabled them to enter additional positions with the aim of increasing returns on any uplift in market volatility. The Fund's strategy allows for up to 15% of assets to be invested in international assets, with positions in the S&P500, NASDAQ, Hang Seng, MSCI Developed and emerging markets (among others). Gyrostat anticipate increasing levels of 'late cycle' market volatility given elevated geopolitical tensions, historically high debt levels and elevated valuations. |
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