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ALC Active Australian Equities Fund

ARSN 668 391 302

A fund for investors who are looking for capital growth and income while hedging equity market risk.

Fund
Inception Date
29/7/2023
Strategy
Inception Date
2/1/2019
Return Since
Strategy Inception Date
18.77% p.a.*
Fund
Size
A$19,256,049.10
as at 31 May 2024

Investment objectives

The Fund seeks to generate positive absolute returns in excess of the RBA Cash rate over a rolling 5-year period. The Fund seeks to do this by investing in Australian-listed equities, comprising a core set that is expected to deliver strong total returns, augmented by a number of holdings that are expected to deliver short-term returns and provide risk-mitigation.

Key features

  • Absolute Return Objective – Striving to seek positive returns regardless of market cycle
  • Weekly Liquidity – In normal market conditions, access to funds weekly
  • Flexible Mandate – Ability to allocate capital to best suit investment objectives, not tied to long only
  • Core Risk Management – AL Capital prioritizes Risk Management, utilizing a propriety risk scoring system

Summary Details

Unit Price: Entry: A$0.8869 Exit: A$0.8833 as at 31 May 2024
APIR Code: ETL2310AU
Investment Manager: AL Capital Holding Pty Ltd
Responsible Entity: Equity Trustees Limited
Minimum Initial Investment: A$50,000
Responsible Entity: 2.21% p.a. of the NAV (including GST less RITCs)
Performance Fee: 20.00% over the performance benchmark
Buy/sell spread: +/- 0.20% on applications into the Fund, and withdrawals out of the Fund.
Liquidity Weekly (in normal market conditions)
Portfolio managers(s): Wim Steemers

For full details please see PDS below

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Performance*

 

 

Monthly Returns*

1 month3 month6 month1 year2 year3 year5 year Since Inception
ALC Active Australian Equities Fund2.24%7.10%-3.38%-10.90%5.46%2.70%14.23%18.77%
ASX 200 0.92%1.17%10.66%12.93%7.80%6.81%7.83%10.42%
Over/Under Performance1.32%5.93%-14.05%-23.83%-2.34%-4.11%6.40%8.36%

*Performance is reported net of all fees. Returns greater than one year are annualized. Historical performance shows the ongoing performance both of a different fund previously managed by the AL Capital that operated with the same strategy and investment management team as the ALC Active Australian Equities Fund. This information has been provided for illustrative purposes only. Past performance is not a reliable indicator of future returns.

Investment Strategy

The Investment Management approach is based on fundamentals and driven by the intrinsic value of its stock positions. AL Capital employs a combination of in-depth top-down and bottom-up research to construct the high-conviction part of the portfolio. To achieve the desired net market exposure, as well as for risk control, an actively traded long-short component is combined with the high-conviction component. This way the manager aims to achieve positive returns regardless of overall market direction. For the high-conviction part, a team of experienced analysts is employed to conduct in-depth company research with a longer term (3-4 year) view, which leads to the establishment of a fair value estimate and target price. If the corresponding upside is sufficiently large, the stock will be included in the portfolio. The actively traded part draws on the same research effort, but focuses more on short-term movements, risk control, and the achievement of the overall target net exposure. For example, if the target net exposure is 50% of NAV, the actively traded part of the portfolio will short a number of stocks such that the net exposure of the portfolio is 50% of NAV. On occasion Derivatives can be used to achieve the same outcome. The combined portfolio is reviewed, discussed and, if necessary, updated in the weekly portfolio review meeting, with a view to target net exposure, risk parameters, stock parameters, and the market and macro environment.

The ALC Active Australian Equities Fund is a combination of 2 strategies:

High Conviction

The high-conviction strategy adopts a long-term, fundamental approach to selecting stocks and offers investors exposure to a high conviction portfolio of ASX listed companies that AL Capital believe will deliver excess returns over the long term. AL Capital’s team of analysts conducts in-depth research on potential investments. They make forecasts and set a target price for stocks under their coverage. Stock ideas are debated in weekly portfolio review meetings. After rigorous debate the idea is either approved, rejected, or sent back for further analysis. The portfolio managers construct the portfolio, using as input the target prices of approved stocks as set by the analysts, along with their level of conviction, as well as market data on volatility and liquidity. They are guided by a proprietary tool that optimizes the combined risk-reward trade-off of all approved investment ideas at any given time. The portfolio is monitored continually. Stop-loss triggers are in place that lead to review and possible exit of any position.

Short Term

The short term strategy has two functions:

  • Add to performance by taking advantage of short-term dislocations in the market, e.g., around earnings announcements, placements, geopolitical news-flow, etc.
  • Aid in risk control through smoothing out the volatility of the overall portfolio.

The short term portfolio will also draw upon research done by the analysts to identify stock ideas, potential catalysts, etc. Position sizing is driven by the target overall portfolio positioning. The portfolio is monitored continually. Stop-loss triggers are in place that lead to review and possible exit of any position.

Updates & Reports

Monthly Investor Update

Prices & Distributions

Unit Price History

DateEntry (A$)NAV per unit (A$)Exit (A$)
31 May 2024$0.8869$0.8851$0.8833
24 May 2024$0.8772$0.8754$0.8737
17 May 2024$0.8664$0.8647$0.8629
10 May 2024$0.8719$0.8702$0.8685
3 May 2024$0.8588$0.8571$0.8553
30 Apr 2024$0.8674$0.8657$0.8640
26 Apr 2024$0.8636$0.8618$0.8601
19 Apr 2024$0.8494$0.8477$0.8460
12 Apr 2024$0.8502$0.8485$0.8468
5 Apr 2024$0.8329$0.8312$0.8295

 

Distribution History

The Fund is yet to pay its first distribution.

No distribution history available

 

Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the ALC Active Australian Equities Fund (“the Fund”). Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT).

The Investment Manager for the Fund is AL Capital Holding Pty Ltd (“AL Capital”) ABN 29 613 750 682, AFSL 523648. This publication has been prepared by AL Capital to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither AL Capital, Equity Trustees nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.

ALC Active Australian Equities Fund’s Target Market Determination is available https://www.eqt.com.au/insto. A Target Market Determination describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed.

 

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