Active Composite Bond Strategy

Coolabah Active Composite Bond Fund (HEDGE FUND)

Daily Liquidity, Long Duration, Tradable on and off the securities exchange

Overview

Coolabah Capital Investments is delighted to introduce our market-leading, daily liquidity, long duration, Active Composite Bond Fund (Hedge Fund). This was previously an institutional strategy for super funds that was not available to the public, which we are now excited to bring to you as a quoted fund.

Since the Coolabah Active Composite Bond Fund’s (Hedge Fund) inception in March 2017, it has returned 5.32% per annum after retail fees. That’s 1.44% above the Composite Bond Index’s 3.88% per annum return. It ranks in the top 2 strategies in Mercer’s Australian fixed-income (active) universe over the last 3 years to 30 April 2021. (Please note past performance does not assure future returns. Please read the PDS to better understand the fund’s risks, which can be found at Coolabah’s website.)

The Coolabah Active Composite Bond Fund (Hedge Fund) will now be available as an exchange quoted managed fund on Chi-X Australia. The fund will be accessible on Chi-X under the ticker FIXD in June. The Fund will also be accessible by applying directly with the Fund Administrator, Mainstream Fund Services, under the APIR Code ETL2716AU.

Investments

The Coolabah Active Composite Bond Fund (Hedge Fund) seeks to deliver superior risk-adjusted returns to the Bloomberg AusBond Composite Bond Index through harnessing Coolabah’s active credit alpha style that focusses on systematically exploiting mispricings to generate capital gains in addition to yield.

It targets returns of 1% to 2% annually in excess of the Bloomberg AusBond Composite 0+ Yr Index, after management fees, over rolling 12 month periods. 

The Coolabah Active Composite Bond Fund (Hedge Fund) provides exposure to a diversified portfolio of cash securities and bonds, including government bonds, bank bonds, corporate bonds and asset-backed securities and residential-mortgage backed securities with an average target credit rating of A. It cannot invest in hybrids, equities, property, unrated securities, high yield bonds or sub-prime loans.

Coolabah adds-value by finding and exploiting bond mispricings in high grade credit markets that can generate capital gains or alpha in addition to the yield on these securities. 

To find these mispricings, you need a very large team coupled with significant quantitative resources, which is why as at June 2021, we have 26 executives, including 13 analysts and 5 portfolio managers spread across Sydney, Melbourne and London. It is also why we have built up to 30-40 proprietary quant valuation models in house and harnessed AI to help us in our search for mispricings.

Exploiting these mispricings to generate capital gains also requires a very active investment style. We are typically trading 50 to 100 times a day, on average $150 million per day. Since January 2021, Coolabah has bought and sold more than $18 billion of bonds, making it arguably the most active Australian credit investor. 

Risks

The Fund is not a bank deposit. 

It is a managed investment scheme registered and regulated by the Australian Securities and Investments Commission (ASIC).

All investments carry risks, including that the value of investments may vary, future returns may differ from past returns, and that your capital is not guaranteed, which can be amplified by the use of leverage. 

To understand the Fund’s risks better, please refer to the detailed “Risks” section in the PDS.

CCI offers a range of zero-duration and long-duration active credit alpha solutions for both retail and institutional investors. In the long-duration domain, CCI’s flagship solution is the Active Composite Bond Strategy.

The Active Composite Bond Strategy seeks to deliver superior risk-adjusted returns to the Bloomberg AusBond Composite Bond Index through harnessing CCI’s active credit alpha style that focusses on systematically exploiting mispricings to generate capital gains in addition to yield.

The Active Composite Bond Strategy ranks in the top 2 strategies in Mercer’s Australian fixed-income (active) universe over the last 3 years to 30 April 2021.

The Coolabah Active Composite Bond Fund (Hedge Fund) is available to retail investors to invest both through their Securities Exchange broker and directly with the registry.

The Fund provides exposure to a diversified portfolio of cash securities and bonds, including and asset-backed securities and residential-mortgage backed securities with an average target credit rating of A.

The strategy cannot invest in hybrids, equities, property, unrated securities, high yield bonds or sub-prime loans.

CCI adds value through active asset-selection with materially lower volatility than traditional fixed interest funds.

The Fund is not a bank deposit. It is a managed investment scheme registered and regulated by the Australian Securities and Investments Commission (ASIC).

All investments carry risks, including that the value of investments may vary, future returns may differ from past returns, and that your capital is not guaranteed. To understand the Fund’s risks better, please refer to the detailed “Risks” section in the PDS.

Key Facts

NameCoolabah Active Composite Bond Fund (Hedge Fund)
Exchange TickerFIXD
ExchangeChi-X Australia (CXA)
APIRETL2716AU
Investment ObjectiveTargets returns in excess of the Bloomberg Ausbond Composite Bond 0+ Yr Index by 1.0% to 2.0% per annum after fees.
Inception Date7-Mar-17
Management Costs0.30% p.a.
Performance Fee (%)20.5% of excess fund outperformance over the Benchmark subject to a high water mark.
BenchmarkBloomberg Ausbond Composite 0+ Yr Index plus Management Costs
Distribution FrequencyQuarterly
Distribution Reinvestment Plan (DRP)Full or partial participation available.
Issuer & Responsible EntityEquity Trustees
Investment ManagerCoolabah Capital Investments (Retail)
Fund AdministratorMainstream Fund Services
RegistryMainstream Fund Services
CustodianMainstream Fund Services
AuditorErsnt & Young

Pricing Information

Current iNAV AU$30.0743 Last updated: 11/06/2021, 16:29:53 AEST
Difference Since Last Close 0.00%

An indicative NAV per Unit (“iNAV”) will be published by the Fund throughout the Trading Day. The iNAV will be updated using a real time fair value methodology that seeks to ensure that the iNAV reflects movements in markets and currencies during the Trading Day.

The iNAV represents the best estimate by the Responsible Entity or its appointed agents of the value per unit in the Fund throughout the trading day. No assurance can be given that the iNAV will be published continuously or that it will be up to date or free from error. To the extent permitted by law, neither the Responsible Entity nor its appointed agent shall be liable to any person who relies on the iNAV. The price at which Units trade on the Securities Exchange may not reflect the NAV per Unit or the iNAV and may differ from the price received when applying for or redeeming with the Responsible Entity. Please refer to the Product Disclosure Statement for further details on this Risk.

Net Assets* ($AUD)$74,661,392.6
Units Outstanding * (#)2,473,821
NAV/Unit*30.1806
*As of 09/06/2021
ARSN650 526 695
Exchange CodeFIXD
APIR CodeETL2716AU
ISINAU0000153660
TradableBoth on Chi-X and with the Responsible Entity
Bloomberg CodeFIXD AU
Bloomberg iNAV CodeFIXDAUIV

Performance

Period Ending 2021-05-31Fund Net ReturnBloomberg AusBond Composite 0+ Yr IndexFund Excess Over Index
1 month0.26%0.27%-0.01%
3 months1.97%1.64%0.33%
6 months-1.57%-2.68%-1.11%
1 year1.93%-1.21%3.14%
2 years pa4.05%1.81%2.24%
3 years pa6.21%4.14%2.07%
Inception pa Mar. 20175.28%3.85%1.43%

Past performance does not assure future returns. Returns for periods longer than one year are annualised. Net returns are calculated from the historic gross returns using the current fee structure as displayed in the Product Disclosure Statement.

Total Return Index
Week
Month
Year
All

Past performance does not assure future returns. Returns are calculated in Australian dollars using net asset value per unit at the start and end of the specified period and do not reflect brokerage or the bid ask spread that investors incur when buying and selling units on the Securities Exchange.

Returns are after all fund costs, assume reinvestment of any distributions and do not take into account tax paid as an investor in the Fund.

Asset Allocation

Distributions

The Fund’s first retail distribution will occur at 30 June 2021.

Frequently Asked Questions

You are investing in the same fund but you have a choice whether you hold unlisted units via the responsible entity (RE) or buy the listed units on the Securities Exchange in the same way you buy other publicly listed ETFs and shares. Please read the PDS for further information.

To invest via the Securities Exchange – You can buy and sell units in FIXD via your online share trading platform, your stockbroker or your financial adviser.
 
To invest via the responsible entity – You can apply online here. 

The avenue by which you invested in the Fund, either via buying units from the responsible entity (RE) or via the Securities Exchange, does not restrict how you can withdraw your investment.

 

To withdraw via the Securities Exchange – Log into your share trading platform and issue a sell order, just as you would for any listed ETF or share. This is a straight forward process if you have a Holder Identification Number (HIN) associated with your holding. If have a Securityholder Reference Number (SRN), ask your stockbroker if they can sell your units on your behalf. If they are unable to do that, you will need to ask your stockbroker or trading platform if they can convert your holding into a HIN after which you will be able to sell your holding via the ASX.

 

To withdraw via the responsible entity (RE) – Complete a withdrawal request form and submit it to the responsible entity (RE). You will need to provide your SRN or Investor Number on the withdrawal form. If you have a Holder Identification Number (HIN) instead, you will need to convert your holding from a HIN to a SRN with the assistance of your stockbroker or online trading platform.

 

Please note that there are differences when you redeem via the responsible entity (RE) or by selling on the stock exchange including the price you may pay. You should read the PDS or speak with your adviser before you decide which avenue you use.

Disclaimer: Past performance does not assure future returns. Returns are shown after all fund fees, unless otherwise stated. Retail product fees can vary depending on the unit class selected and/or whether the financial advisory firm has negotiated access to lower cost unit classes.

Equity Trustees Limited (Equity Trustees) ABN 46 004 031 298 AFSL 240975, is the responsible entity for the Smarter Money Fund (SMF), the Smarter Money Higher Income Fund (SMHI), Smarter Money Long-Short Credit Fund (LSCF) and the Coolabah Active Composite Bond Fund (Hedge Fund) (Ticker: FIXD). 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).

This has been prepared by Coolabah Capital Investments (Retail) Pty Ltd ACN 153 555 867 (Coolabah), an authorised representative (#000414337) of Coolabah Capital Institutional Investments Pty Ltd ABN 85 605 806 059 AFSL 482238, to provide you with general information only. In preparing this publication, 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. The Product Disclosure Statement (PDS) for the Fund should be considered before deciding whether to acquire or hold units in it. A PDS for the Fund can be obtained by visiting www.coolabahcapital.com. Neither Coolabah, Equity Trustees nor any of their related parties, their employees or directors, provide any 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. The Fund is subject to investment risks, which could include delays in repayment and/or loss of income and capital invested.