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| Strategy | |
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| FUM (millions) | |
| Fund Overview | There is a slight bias to large cap stocks on the long side of the portfolio, although in a rising market the portfolio will tend to hold smaller caps, including resource stocks, more frequently. On the short side, the portfolio is particularly concentrated, with stock selection limited by both liquidity and the difficulty of borrowing stock in smaller cap companies. Short positions are only taken when there is a high conviction view on the specific stock. The Fund uses derivatives in a limited way, mainly selling short dated covered call options to generate additional income. These typically have less than 30 days to expiry, and are usually 5% to 10% out of the money. ASX SPI futures and index put options can be used to hedge the portfolio's overall net position. The Fund's discretionary investment strategy commences with a macro view of the economy and direction to establish the portfolio's desired market exposure. Following this detailed sector and company research is gathered from knowledge of the individual stocks in the Fund's universe, with widespread use of broker research. Company visits, presentations and discussions with management at CEO and CFO level are used wherever possible to assess management quality across a range of criteria. |
| Manager Comments | On a calendar basis the fund has had 2 negative annual returns in the 15 years and 10 months since its inception. Its largest drawdown was -11.71% lasting 2 years and 6 months, occurring between June 2018 and December 2020 when the index fell by a maximum of -26.75%. The Manager has delivered these returns with -6.52% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times and currently sits at 0.75 since inception. The fund has provided positive monthly returns 87% of the time in rising markets, and 34% of the time when the market was negative, contributing to an up capture ratio since inception of 17% and a down capture ratio of 49%. |
| More Information |
