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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 returned -0.12% in November. Gyrostat highlighted that on the 16th of November the ASX suffered a major outage to its ASX Trade system cause by a software issue following a system upgrade relating to the trading of combination orders which they believe resulted in inaccurate market data. The Fund typically uses combination orders as part of its normal trading strategy and, to prevent losses, promptly altered their normal trading strategy. Gyrostat noted this meant the Fund could not capture as much upside post 16th of November. At no times during the outage did the Fund breach its investment guidelines or fail to meet its objectives, highlighting the resilience of the Fund's trading strategy and systems. Gyrostat anticipate low levels of 'late cycle' market volatility with elevated geopolitical risk, historically high debt levels and elevated valuations. |
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