Quarterly Fact Sheet - September 2016
'The 130/30 Focus Fund1 amplifies Ausbil's successful stock selection skills by allowing both long and short equity options'
The aim of the Fund is to outperform the S&P/ASX 200 Accumulation Index over the long term by investing primarily in listed Australian securities (long and short) and international securities.
Why Long Short?
The three main benefits of introducing a long short strategy into a diversified portfolio are;
• potentially delivers superior returns to a long only Australian equities portfolio.
• provides a moderate to low level of correlation with other asset class returns.
• takes advantage of expected falls (as well as rises) in stock prices.
Key features of the strategy
• fundamental process with quantitative inputs
• target allocation of 130% Long, 30% short.
• short positions generally comprise either a pairs trade or fundamental shorts.
• short positions individually managed from an absolute risk management perspective.
• security lending arrangement that significantly reduces client counter-party risk.
We classify ourselves as ‘core’; wherein at certain stages of the
cycle the Fund may have a value or growth tilt. Ausbil employs a four stage process to provide the framework for portfolio construction consistent with its investment philosophy. The process is summarised in the diagram below: