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| Fund Overview | L1 Capital uses a combination of discretionary and quantitative methods to identify securities with the potential to provide attractive risk-adjusted returns. The discretionary element of the investment process entails regular meetings with company management and other stakeholders as well as frequent reading and analysis of annual reports and other relevant publications and communications. The quantitative element of the investment process makes use of bottom-up research to maintain financial models such as the Discounted Cashflow model (DCF) which is used as a means of assessing the intrinsic value of a given security. Stocks with the best combination of qualitative factors and valuation upside are used as the basis for portfolio construction. The process is iterative and as business trends, industry structure, management quality or valuation changes, stock weights are adjusted accordingly. |
| Manager Comments | The L1 Capital Long Short Fund (Monthly Class) has a track record of 7 years and 5 months and has outperformed the ASX 200 Total Return Index since inception in September 2014, providing investors with an annualised return of 22.78% compared with the index's return of 7.15% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 7 years and 5 months since the start of its track record. Over the past 12 months, the fund's largest drawdown was -7.21% vs the index's -6.35%, and since inception in September 2014 the fund's largest drawdown was -39.11% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in February 2018 and lasted 2 years and 9 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by November 2020. The Manager has delivered these returns with 6.66% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 three times over the past five years and which currently sits at 1.04 since inception. The fund has provided positive monthly returns 79% of the time in rising markets and 64% of the time during periods of market decline, contributing to an up-capture ratio since inception of 94% and a down-capture ratio of 3%. |
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