Long-Short Credit Strategy

SMARTER MONEY LONG-SHORT CREDIT FUND

Unconstrained

About

The Smarter Money Long-Short Credit Fund (LSCF) is an absolute return fixed-income strategy focused on exploiting long and short mispricings in credit markets.

The Fund targets returns above the Reserve Bank of Australia (RBA) cash rate plus 4% to 6% pa over rolling 3 year periods after Management Fees, Administration Fees and Performance Fees. The Fund targets volatility of less than 5% pa and since inception has delivered realised volatility of less than 2% pa.

The Fund invests primarily in senior and subordinated bonds, hybrids and derivatives. The Fund targets holding the majority of its portfolio in investment-grade quality debt securities.

The Fund aims to generate high absolute returns that have low-to-no correlation with equities, fixed-rate bonds and property markets, from relatively low risk and liquid investments identified through the portfolio managers’ proven active asset-selection process. The Fund aims to reliably distribute strong quarterly income.

The portfolio managers seek to generate these returns by taking “long” or “short” positions in relation to assets which they consider are trading below or above fair value. The goal is to generate significant risk-adjusted returns, or “alpha”. The ability to go long or short, either directly or through using derivatives, means the Fund can profit from bond price rises and price falls. Going long or short can also result in the Fund being leveraged.

 

Returns

LSCF was publicly launched in August 2017 and has substantially outperformed the RBA cash rate, the AusBond Floating-Rate Note Index, which is a portfolio of investment-grade, Australian-issued floating-rate notes, and its FE Analytics Alternatives peers since inception.

Ratings

LSCF has been independently reviewed and rated by several research houses, including Lonsec, Atchison Consultants (Very Strong) and Australia Ratings (Recommended). Please contact us to obtain copies of the available ratings reports. These ratings are only one factor to be taken into account when deciding whether to invest.

Investments

LSCF actively invests in a portfolio of cash securities and floating-rate notes with a target dollar-weighted average credit rating in the investment-grade band. LSCF does not invest in fixed-rate bonds (unless interest rate risk is swapped out) or equities. LSCF’s portfolio managers add value through active asset-selection.

Risks

LSCF 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. The Fund can take long and short positions, borrow and use derivatives, meaning the Fund is geared (or leveraged). Leverage can amplify gains and also amplify losses. To understand LSCF’s risks better, please refer to the detailed “Risks” section in the PDS. 

Overview

Strategy: Unconstrained Fixed Income; Defensive Alternatives
APIR: SLT2562AU
ARSN: 617 838 543

Inception Date: 31 Aug 2017
Target Returns: 4.0% to 6.0% over RBA Cash Rate net of fees

Responsible Entity: Equity Trustees
Registry: Mainstream Fund Services
Custodian: Mainstream & JP Morgan

Applications: Daily
Withdrawals: Daily (T+3)
Distributions: Quarterly
Minimum Investment: $1,000
Additional Investment: $1,000
Savings Plan: Monthly
Savings Plan Minimum: $100
Buy/Sell Spread: 0.00%/0.10%

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Ratings

Qualitative

Long-Short Credit Fund: Very Strong | Australia Ratings
Smarter Money Fund: Recommended | Atchison Consultants

SMARTER MONEY LONG-SHORT CREDIT FUND

Unconstrained

The Smarter Money Long-Short Credit Fund (LSCF) is an absolute return fixed-income strategy focused on exploiting long and short mispricings in credit markets.

The Fund targets returns above the “neutral” Reserve Bank of Australia (RBA) cash rate plus 4% to 6% p.a. over rolling 3 year periods after Management Fees, Administration Fees and Performance Fees. The Fund targets volatility of less than 5% p.a.

The Fund invests primarily in senior and subordinated debt securities, hybrids and derivatives issued by Australian entities domestically and overseas, although it can also invest in these types of securities when they are issued by overseas entities (into the Australian market or offshore). The Fund targets holding the majority of its portfolio in investment-grade quality debt securities and hybrids.

The Fund aims to generate high absolute returns that have low to no correlation with equities, fixed-rate bonds and property markets, from relatively low risk and liquid investments identified through the Portfolio Manager’s active asset-selection process that has been proven over the last 6 years via the SMAC and SMHI strategies. The Fund aims to reliably distribute strong quarterly income.

The Portfolio Manager seeks to generate these returns by taking a “long” or “short” position in relation to assets which it considers are trading below or above fair value. The goal is to generate significant risk-adjusted returns, or “alpha”. The ability to go long or short, either directly or through using derivatives, means the Fund can profit from price rises and price falls. Going long or short can also result in the Fund being leveraged.

LSCF was publicly launched in August 2017 and has substantially outperformed the RBA cash rate, the AusBond Floating-Rate Note Index, which is a portfolio of investment-grade, Australian-issued floating-rate notes, and its FE Analytics Alternatives peers since inception.

LSCF has been independently reviewed and rated by several research houses, including Lonsec, Atchison Consultants (Very Strong) and Australia Ratings (Recommended). Please contact us to obtain copies of the available ratings reports. These ratings are only one factor to be taken into account when deciding whether to invest.

LSCF actively invests in a portfolio of cash securities and floating-rate notes with a target dollar-weighted average credit rating in the investment-grade band. LSCF does not invest in fixed-rate bonds (unless interest rate risk is swapped out) or equities. LSCF’s portfolio managers add value through active asset-selection.
LSCF 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. The Fund can take long and short positions, borrow and use derivatives, meaning the Fund is geared (or leveraged). Leverage can amplify gains and also amplify losses. To understand LSCF’s risks better, please refer to the detailed “Risks” section in the PDS. 

Overview

Strategy: Unconstrained Fixed Income; Defensive Alternatives
APIR: SLT2562AU
ARSN: 617 838 543

Inception Date: 31 Aug 2017
Target Returns: 4.0% to 6.0% over RBA Cash Rate net of fees

Responsible Entity: Equity Trustees
Registry: Mainstream Fund Services
Custodian: Mainstream & JP Morgan

Applications: Daily
Withdrawals: Daily (T+3)
Distributions: Quarterly
Minimum Investment: $1,000
Additional Investment: $1,000
Savings Plan: Monthly
Savings Plan Minimum: $100
Buy/Sell Spread: 0.00%/0.10%

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