Performance Report

December 2025

Fund: Coolabah Active Sovereign Bond Fund - Long Duration Class

Strategy: Government Bond

Return (since Dec. 2023): 5.23% pa gross (4.17% pa net)

Net return volatility (since Dec. 2023): 4.25% pa

Objective: The Active Sovereign Bond Fund - Long Duration Class targets returns in excess of its Benchmark, the Bloomberg AusBond Treasury 0+ Yr Index (BATY0) after management costs, by 3.0% to 5.0% per annum over rolling 3 year periods.

Strategy: The Fund aims to generate diversifying excess returns above the Benchmark for each Class through exploiting relative value mis-pricings in high quality government bonds and related Derivatives that have a low correlation to equity and credit markets and the level of interest rates. The Long Duration Class aims to deliver the Fund’s investment strategy over its Benchmark, the Bloomberg AusBond Treasury 0+ Yr Index (BATY0). It offers fixed-rate bond exposure by matching its interest rate duration to that of the Index, which may be a source of interest-rate risk.

Period Ending 2025-12-31	Gross Return	Net Return	Bloomberg AusBond Treasury 0+Yr Index	Gross Excess Return^†	Net Excess Return^†
1 month	-0.33%	-0.39%	-0.76%	0.43%	0.37%
3 months	-2.13%	-2.29%	-1.35%	-0.78%	-0.94%
6 months	-0.35%	-1.02%	-1.26%	0.91%	0.24%
1 year	4.77%	3.52%	2.51%	2.26%	1.01%
Inception pa Dec. 2023	5.23%	4.17%	3.31%	1.92%	0.86%

^† The Excess Return column represents the gross and net return above the Bloomberg AusBond Treasury 0+ Yr Index

Disclaimer: Past performance does not assure future returns. Returns are shown net of management fees and costs unless otherwise stated. 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 Fund’s risks better, please refer to the Product Disclosure Statement available at Coolabah Capital Investments' website.

*Note: all portfolio statistics other than yields and duration are reported on gross asset value*
Av. Portfolio Credit Rating	AAA	Modified Interest Rate Duration	4.0 years
Portfolio MSCI ESG Rating	AA	Gearing Permitted?	Yes
Gross Portfolio Weight to Govt. Bonds	90.6%	Net Annual Volatility (since incep.)	4.25%

Ratings: Recommended (Zenith)

Fund: Coolabah Active Sovereign Bond Fund - Long Duration Class

Return/Risk: 5.23% pa gross/4.17% pa net (4.25% pa volatility)

Disclaimer: Past performance does not assure future returns. Returns are shown net of management fees and costs unless otherwise stated. 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 Fund’s risks better, please refer to the Product Disclosure Statement available at Coolabah Capital Investments' website.

The since inception gross (net) return of 5.23% pa gross (4.17% pa net) is the total annual return earned by the fund since Dec. 2023, including interest income and movements in the price of the bond portfolio after all fund fees (assuming net returns are calculated from the historic gross returns using the current fee structure as displayed in the Product Disclosure Statement). The net return quoted applies to the Coolabah Active Sovereign Bond Fund - Long Duration Class, with quarterly distributions reinvested. Investment return will vary depending upon investment date and any additional investments and withdrawals made. The annualised volatility estimate of 4.25% pa is based on the standard deviation of net daily returns since inception, which are then annualised, attributable to the Coolabah Active Sovereign Bond Fund - Long Duration Class.

Portfolio Managers

Christopher Joye, Ashley Kabel, Roger Douglas, Matt Johnson (Coolabah Capital Investments)

APIR Code	ETL5578AU	Fund Inception	13-Dec-23
ISIN	AU60ETL55786	Distributions	Quarterly
Benchmark	Bloomberg AusBond Treasury 0+Yr Index	Unit Pricing	Daily (earnings accrue daily)
Asset-Class	Government Bond	Mgt. & Admin Fee	0.65% pa
Target Return	3-5% pa above Benchmark after mgt. fee and costs	Perf. Fee	20% of excess outperformance above the benchmark after mgt. fees
Investment Manager	Coolabah Capital Investments (Retail)	Custodian	Citigroup

Fund: Coolabah Active Sovereign Bond Fund - Long Duration Class

Return/Risk: 5.23% pa gross/4.17% pa net (4.25% pa volatility)

Portfolio commentary: In December, Coolabah’s Active Sovereign Bond Strategy returned -0.33% gross (-0.39% net), in a month characterised by settling markets, as the both the RBA and FOMC delivered what was expected.

Over the last 12 months, the Strategy returned 4.77% gross (3.52% net), outperforming the Bloomberg AusBond Treasury Index (2.51%).

The level of yields rose across the December, as the market priced in better growth and rate hikes from the RBA. This saw 3x10 curve flatten down to ~60bps and the spread between ACGBs and peer markets widen. In particular, the spread between 10-year ACGBs and the US widened to a little over 60bps, which is the largest the spread has been since 2022. In part this was due to a divergence between the dovish December FOMC meeting, and hawkishness from the RBA.

The futures roll allowed Coolabah to replace expensive bond basis with somewhat cheaper economics. Bonds richened to futures in late December as the AOFM took their traditional issuance holiday, and the budget update cut ACGB supply by ~25bn for 25/26. The supply reduction initially widened swap spreads, though they tightened in the second half of December.

In general, it was a good month to own bonds versus futures – most things worked. Coolabah’s best performing positions were at in the 10-year+ sector, where ultra flattening on account of the high and rising level of yields caused compression of longer bonds down towards the 10-year sector. There was also solid performance in the ~7-year sector. As bond basis richened we added shorts, which drew down modestly. Coolabah also drew down a little on a paid 10-year EFP position.

Bond-futures basis was generally a tailwind in December. Expensive basis was replaced with fair basis in the futures roll, which then benefited as basis richened by about 0.3bps to the end of December. This contributed to the generally good returns in the month.

Strategy commentary: In the month of December, there was a secular shift in interest rate expectations marked by a bull steepening in many global yield curves, whereby short-term interest rates declined while long-term rates climbed. This reflected several cross-currents, including the US Federal Reserve continuing to ease its policy rate lower, combined with investor anxiety about deteriorating budget deficits, ever-growing government bond issuance, and the specter of inflation rates not mean-reverting sustainably to central bank targets, amongst other things.

Coolabah’s main macro ideas for 2026 are best summarized as follows:

We believe in US economic and strategic exceptionalism and that the short- and medium-term efficacy of President Donald Trump’s fiscal, trade, and geopolitical policies have been consistently underestimated by markets;

We believe that the US economy will surprise with its strength in the years ahead, underpinned by the AI capex boom, reshoring of supply chains, a manufacturing renaissance, aggressive deregulation, reinvigorated entrepreneurial activity, political policy clarity, and renewed public support for business-friendly outcomes given the success of Texas and Florida juxtaposed against California and New York;

We believe that the political zeitgeist globally remains focused on public spending in the name of winning short-term votes irrespective of the enduring fiscal consequences, which creates material inflation and interest rate risks in the period ahead;

We believe that the AI revolution is more likely to be inflationary rather than disinflationary in the near-term as a consequence of resource bottlenecks, understated capex spending competition, and the likelihood that AI will generate positive rather than negative net employment demand over the next 1-2 years;

We believe that the monetary policy easing cycle has run its course and that the risk of interest rate increases in 2026 and 2027 has been underestimated by markets, although a recent reassessment has taken place;

We believe that government bond term premia and the long-term cost of capital are likely to remain elevated and could drift materially higher in an environment where the US economy expands at a faster-than-expected pace (and other nation-states eventually seek to emulate its policy posture);