The Acadian Australian Equity Long Short Fund uses quantitative modelling and fundamental insights to invest in undervalued stocks and short-sell overvalued stocks, generally maintaining a gross long exposure of 130% and a gross short exposure of 30%. The investment approach is both multi-faceted and highly adaptable, which allows Acadian to take advantage of attractive stocks opportunities as they arise. Acadian casts a wide net to discover mispriced stocks, analysing more than 1,000 stocks daily to find the most attractive investment opportunities for inclusion in the portfolio.
The Portfolio returned 0.23%, 12.0%, 7.56% and 8.32% net of fees for the quarterly, 1-,5-, and 10-year periods, versus returns of -0.84%, 12.92%, 6.61% and 7.39% for the S&P/ASX 300 Accumulation Index. Stock selection contributed to returns, while sector allocations were negative.
Key sources of positive active returns included stock selection in materials, a combination of stock selection and an underweight position in health care, and stock selection in industrials. Leading advances within these sectors respectively included a net short position in Chalice Mining, a holding in Cochlear, and a net short position in Auckland International Airport. Detractors included a combination of stock selection and an underweight position in consumer discretionary, stock selection in real estate, and a combination of stock selection and an underweight position in energy. Leading declines within these sectors in turn included a net short position in Baby Bunting Group, a holding in Growthpoint Properties Australia, and a net short position in Boss Energy.*
Key Holdings1
Positive
‐ Our overweight to Cochlear Ltd, a provider of implantable hearing solutions for children and adults, was rewarded with 20 basis points of active returns as share prices gained 11.4% over the quarter. The company has been benefiting from increased sales of its cochlear implant units across both the developed and the emerging markets on the back of improved clinical capacity and a rise in COVID catch-up surgeries. It now expects its FY24 underlying net profit to increase by 16- 23% from FY23.
Negative
‐ Our overweight to Qantas Airways Ltd, a provider of air transportation services, cost the portfolio 23 basis points of active return as share prices slumped 20.7% in the period. The company continues to be impacted by post-COVID supply chain and resourcing challenges that have resulted in a high number of cancellations and delays. Numerous lawsuits and reputational challenges remain as other major headwinds for the company.
What is Acadian Wholesale Aus Equity Long Short Acadian Wholesale Aus Equity Long Short is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Long Short Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Acadian Wholesale Aus Equity Long Short has Assets Under Management of 25.40 M with a management fee of 1.13%, a performance fee of 0.00% and a buy/sell spread fee of 0.3%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Acadian Wholesale Aus Equity Long Short has returned 7.04% in the last month. The previous three years have returned 11.11% annualised and 14.98% each year since inception, which is when the Acadian Wholesale Aus Equity Long Short first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Acadian Wholesale Aus Equity Long Short first started, the Sharpe ratio is 0.32 with an annualised volatility of 14.98%. The maximum drawdown of the investment product in the last 12 months is -7.03% and -52.72% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Acadian Wholesale Aus Equity Long Short has a 12-month excess return when compared to the Domestic Equity - Long Short Index of -0.77% and -1.61% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Acadian Wholesale Aus Equity Long Short has produced Alpha over the Domestic Equity - Long Short Index of -0.06% in the last 12 months and -0.12% since inception.
What are similar investment products?
For a full list of investment products in the Domestic Equity - Long Short Index category, you can click here for the Peer Investment Report.
What level of diversification will Acadian Wholesale Aus Equity Long Short provide?
Acadian Wholesale Aus Equity Long Short has a correlation coefficient of 0.94 and a beta of 1 when compared to the Domestic Equity - Long Short Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Acadian Wholesale Aus Equity Long Short and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Acadian Wholesale Aus Equity Long Short with the ASX Index 200 Index?
For a full quantitative report on Acadian Wholesale Aus Equity Long Short compared to the ASX Index 200 Index, you can click here.
Can I sort and compare the Acadian Wholesale Aus Equity Long Short to do my own analysis?
To sort and compare the Acadian Wholesale Aus Equity Long Short financial metrics, please refer to the table above.
Has the Acadian Wholesale Aus Equity Long Short been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Acadian Wholesale Aus Equity Long Short?
If you or your self managed super fund would like to invest in the Acadian Wholesale Aus Equity Long Short please contact Tower 1, Ground Floor, 201 Sussex St,Sydney, NSW, 2000 via phone +61 2 93782000 or via email -.
How do I get in contact with the Acadian Wholesale Aus Equity Long Short?
If you would like to get in contact with the Acadian Wholesale Aus Equity Long Short manager, please call +61 2 93782000.
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Acadian Wholesale Aus Equity Long Short. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - June 30, 2023 The Portfolio returned -0.98%, 15.05%, 7.73% and 9.51% net of fees for the quarterly, 1-,5-, and 10-year periods, versus returns of 0.99%, 14.40%, 7.11% and 8.54% for the S&P/ASX 300 Accumulation Index. Stock selection detracted from returns, while sector allocations were negative.
Key sources of negative active return included a combination of stock selection and an overweight position in materials, stock selection in consumer staples, and a combination of stock selection and an underweight position in real estate. Leading declines within these sectors respectively included a position in South32, a holding in Treasury Wine Estates, and an investment in Vicinity. Contributors included stock selection in health care, stock selection in consumer discretionary, and stock selection in financials. Leading advances within these sectors in turn included a net short position in Ramsay Health Care, a net short position in Baby Bunting Group, and a net short position in Bank of Queensland.*
Performance Commentary - March 31, 2023 The Portfolio returned 2.55%, 2.79%, 9.35% and 9.28% net of fees for the quarterly, 1-,5-, and 10-year periods, versus returns of 3.33%, -0.60%, 8.63% and 8.12% for the S&P/ASX 300 Accumulation Index. Stock selection detracted from returns, and sector allocations were negative.
Key sources of negative active return included a combination of stock selection and an underweight position in consumer staples, stock selection in industrials, and stock selection in materials. Leading declines within these sectors respectively included a position in Woolworths Group, a holding in Aurizon Holdings, and an investment in Incitec Pivot. Contributors included a combination of stock selection and an underweight position in real estate, stock selection in health care, and stock selection in financials. Leading advances within these sectors in turn included a net short position in Ingenia Communities Group, a holding in Sonic Healthcare, and a net short position in Omni Bridgeway.*
Performance Commentary - December 31, 2022 The Portfolio returned 10.05%, 3.77%, 8.60% and 10.00% net of fees for the quarterly, 1-,5-, and 10-year periods, versus returns of 9.13%, -1.80%, 7.09% and 8.61% for the S&P/ASX 300 Accumulation Index. Stock selection contributed to returns, while sector allocations were negative.
Key sources of positive active returns included a combination of stock selection and an underweight position in consumer discretionary, a combination of stock selection and an underweight position in consumer staples, and a combination of stock selection and an overweight position in materials. Leading advances within these sectors respectively included a net short position in Baby Bunting Group, a net short position in BWX, and a net short position in ioneer. Detractors included a combination of stock selection and an overweight position in health care, stock selection in financials, and a combination of stock selection and an underweight position in real estate. Leading declines within these sectors in turn included a net short position in Fisher & Paykel He NPV, a holding in Medibank Pvt, and a net short position in Centuria Industrial REIT.*
Performance Commentary - September 30, 2022 The Fund returned 3.3%1 for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 2.8%. Stock selection contributed to returns and sector allocations were positive.
Key sources of positive active return included stock selection in energy, a combination of stock selection and a underweight position in consumer discretionary, and a combination of stock selection and an underweight position in industrials. Leading advances within these sectors respectively included a position in Whitehaven Coal, a holding in PWR Holdings, and an investment in Transurban Group. Detractors included stock selection in financials and stock selection in materials. Leading declines within these sectors in turn included a net short position in Pinnacle Investment Management Group and a net short position in ioneer.*
After rallying to start the second half of the year, global stocks fell for much of September, as concerns over aggressive central bank tightening as well as ongoing geopolitical issues weighed on global growth expectations. The OECD noted that world economies are slowing more than it had previously anticipated. As of September, it estimated global GDP growth of 3% in 2022 and only 2.25% in 2023. In the U.S., the equity market’s slide reflected growing resignation among investors that the Federal Reserve is unlikely to soften its hawkish stance until there is significant evidence that inflation is truly in check. The dollar has risen significantly as the Fed has rapidly pushed U.S. rates higher. That, combined with anxiety about a global slowdown, has caused commodity prices to fall. Oil, which had traded above $120 (WTI) as recently as June, retreated below $80 by quarter end. Russian oil continued to be purchased – at discounted prices – by China and India. The war in Ukraine continued to dominate geopolitical headlines. By quarter end, Russian President Vladimir Putin had announced a partial mobilization of Russian forces, which was soon followed by the annexation of four Ukrainian provinces. The two Nord Stream pipelines, which send natural gas from Russia to Germany, ruptured in late September. While neither pipeline was operational at the time, the mysterious event further underscored the fragility of Europe’s energy security.
The Reserve Bank of Australia (RBA) has maintained its stance that it will tackle rising price in the country through a tight monetary policy while stimulating economic activity through careful investments. The RBA seeks to bring Australia’s inflation into the 2-3% range while keeping the economy stable. The central bank expects Australia’s economy to grow steadily this year. The GDP is expected to grow 3.8% in 2022, and approximately 1.8% in 2023 and 2024. The RBA remains confident that strong labour demand is likely to push unemployment even lower to 3.7% by the end of this year while the job vacancies are expected to remain at all-time highs.
Performance Commentary - June 30, 2022 The Fund returned -11.3%1 for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 0.9%. Stock selection contributed to returns, while sector allocations were negative.
Key sources of positive active return included stock selection in information technology, a combination of stock selection and an overweight position in energy, and stock selection in consumer staples. Leading advances within these sectors respectively included a net short position in Tyro Payments, a holding in Woodside Energy Group, and a net short position in BWX. Detractors included stock selection in consumer discretionary, a combination of stock selection and an overweight position in materials, and stock selection in health care. Leading declines within these sectors in turn included a position in Harvey Norman Holdings, a holding in BHP Group, and a net short position in PolyNovo.
The second quarter of 2022 was another challenging period for Australian equities (S&P/ASX 300 Accumulation Index) as a range of global events took a toll on markets, resulting in a return of -12.2%. Inflation soared across all developed markets as many central banks have taken a strong stance against the spiraling inflation including the Fed, which hiked lending rates by as much as 75 basis points and the Reserve Bank of Australia, which announced a rate hike of 50 basis points at the end of the quarter. As investors grappled with the very real possibility of an impending recession, markets reflected the sentiment as all major indices reported a poor to sub-par quarter. Chinese stocks were the only bright spot as COVID-19-induced lockdowns were finally lifted in the country. However, the Asian giant’s economic growth predictions have taken a major hit and the country announced a US$75 billion fund to get things back on track. In Europe, Finland and Sweden were granted membership to NATO. The membership had underlying tones of bolstering support to Ukraine (which shares borders with both nations) as the invasion by Russia continued to rage in the country. The ramifications of sanctions against Russia emerged as the country defaulted on bond yield payments for the first time since 1918. The ban on the exports of energy, food and other commodities from the country also contributed to fuel surging prices across the globe.
Performance Commentary - March 31, 2022 The Fund returned 3.8%1 for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 1.7%. Gains from stock selection were joined with value gained from sector allocations.
Key sources of positive active return included a combination of stock selection and an overweight position in materials, a combination of stock selection and an underweight position in communication services, and stock selection in financials. Leading advances within these sectors respectively included a position in Coronado Global Resources, a net short position in Domain Holdings Australia, and a net short position in Zip. Detractors included stock selection in industrials, stock selection in real estate, and a combination of stock selection and an overweight position in health care. Leading declines within these sectors in turn included a net short position in CIMIC Group, a holding in Charter Hall Group, and an investment in Sonic Healthcare
Performance Commentary - December 31, 2021 The Fund returned 3.0%1 for the quarter (gross of fees), outperforming the S&P/ASX 300 Accumulation Index by 0.8%. Gains from stock selection were joined with value gained from sector allocations. Key sources of positive active return included a combination of stock selection and an underweight position in financials, a combination of stock selection and an overweight position in materials, and stock selection in health care.
Leading advances within these sectors respectively included a position in Westpac Banking, a holding in Grange Resources, and an investment in Australian Clinical Labs. Detractors included a combination of stock selection and an overweight position in energy, stock selection in industrials, and a combination of stock selection and an underweight position in real estate. Leading declines within these sectors in turn included a position in Whitehaven Coal, a holding in SmartGroup, and a net short position in National Storage REIT.
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