Performance Report

December 2025

Fund: Coolabah Active Global Bond Fund - Assisted Investor Class

Strategy: Global Active Credit

Return (since Sep. 2024): 5.02% pa gross (4.19% pa net)

Net return volatility (since Sep. 2024): 3.78% pa

Objective: The Coolabah Active Global Bond Fund (CAGBF) targets returns in excess of the Bloomberg Global Aggregate Corporate Bond Index (hedged to AUD), after management costs, by 1.0% to 2.0% per annum over rolling 3 year periods.

Strategy: The Fund offers an active fixed-income strategy focused on mispricing in global government and corporate bonds with the aim of delivering superior risk-adjusted returns over the Bloomberg Global Aggregate Corporate Index (hedged to AUD). The Fund seeks to have broadly similar interest rate duration risk to the Index subject to any active decisions implemented by the Portfolio Manager to generate excess returns.
The Fund is permitted to invest in Australian and global bonds, such as government and semi-government bonds, bank and corporate bonds, hybrid and asset-backed securities, including residential-mortgage-backed securities, issued in G10 currencies hedged to Australian Dollars, as well as cash, cash equivalents and related derivatives. It can borrow, use derivatives and short-sell, meaning it may be geared (or leveraged). Leverage can amplify gains and also amplify losses.

Period Ending 2025-12-31	Gross Return	Net Return	Bloomberg Global Agg Corp Index (AUD Hedged)	Gross Excess Return^†	Net Excess Return^†
1 month	-0.14%	-0.15%	-0.12%	-0.03%	-0.04%
3 months	0.82%	0.73%	0.83%	0.00%	-0.10%
6 months	3.79%	3.39%	2.88%	0.91%	0.51%
1 year	8.14%	7.28%	6.62%	1.52%	0.66%
Inception pa Sep. 2024	5.02%	4.19%	3.58%	1.44%	0.61%

^† The Excess Return column represents the gross and net return above the Bloomberg Global Aggregate Corporate Index (AUD hedged)

Disclaimer: Past performance does not assure future returns. Returns and yields 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	A	Modified Interest Rate Duration	5.79 years
Portfolio MSCI ESG Rating	AA	Gearing Permitted?	Yes
No. Cash Accounts	20	Net Annual Volatility (since incep.)	3.78%

No. Notes and Bonds

163

Fund: Coolabah Active Global Bond Fund - Assisted Investor Class

Return/Risk: 5.02% pa gross/4.19% pa net (3.78% pa volatility)

The since inception gross (net) return of 5.02% pa gross (4.19% pa net) is the total annual return earned by the fund since Sep. 2024, 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 Global Bond Fund - Assisted Investor 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 3.78% pa is based on the standard deviation of net daily returns since inception, which are then annualised, attributable to the Coolabah Active Global Bond Fund - Assisted Investor Class.

Portfolio Managers

Christopher Joye, Ashley Kabel, Roger Douglas, Fionn O'Leary (Coolabah Capital Investments)

APIR Code	ETL2586AU	Fund Inception	23-Sep-24
ISIN	AU60ETL25862	Distributions	Quarterly
Benchmark	Bloomberg Global Agg Corp Index (AUD hedged)	Unit Pricing	Daily (earnings accrue daily)
Asset-Class	Global Credit	Mgt. & Admin Fee	0.65% pa
Target Return	1-2% pa above Benchmark after fees	Perf. Fee	20.5% of outperformance of benchmark after fees
Investment Manager	Coolabah Capital Investments (Retail)	Custodian	Citigroup

Fund: Coolabah Active Global Bond Fund - Assisted Investor Class

Return/Risk: 5.02% pa gross/4.19% pa net (3.78% pa volatility)

Portfolio commentary: In December, the long duration daily liquidity Coolabah Active Global Bond Fund (CAGBF) returned -0.14% gross (-0.15% net), compared to the Bloomberg Global Aggregate Corporate Index Hedged AUD (-0.12%). Over the December half, CAGBF returned 3.79% gross (3.39% net), outperforming the Bloomberg Global Aggregate Corporate Index Hedged AUD (2.88%) by 0.91% (0.51% net). CAGBF ended December with a running yield of 5.33% pa, a weighted-average credit rating of A, and a portfolio weighted average MSCI ESG rating of AA.

Since the inception of CAGBF in September 2024, it has returned 5.02% pa gross (4.19% pa net), outperforming the Bloomberg Global Aggregate Corporate Index Hedged AUD (3.58% pa) by 1.44% pa (0.61% pa net). While CAGBF's return volatility since inception has been low at around 3.78% pa (measured using daily returns), as a daily liquidity product with assets that are marked-to-market using executable prices, volatility does exist. This contrasts with illiquid credit (eg, loans and high yield bonds) wherein assets that have very high risk can appear to have remarkably low volatility, which is, in fact, just a mirage explained by the inability to properly value these assets using executable prices.

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);

We believe that the probability of stronger-than-anticipated economic outcomes is likely ahead of the midterm elections in the US;

We believe that risk premia have shifted from corporate to public sector balance sheets, which is why credit spreads have compressed while term premia and long-term risk-free rates have increased;

Fund: Coolabah Active Global Bond Fund - Assisted Investor Class

Return/Risk: 5.02% pa gross/4.19% pa net (3.78% pa volatility)

Strategy commentary cont'd:

We reckon the US de-dollarization dynamic is a short-term phenomenon and re-dollarization will eventually become a new normal once Trump’s policies are better understood;

We believe that the geopolitical environment is being overhauled by the "America First" mantra, which is predicated on a realpolitik logic that prizes unilateral actions to protect American (and capitalist) interests ahead of failed Western liberal-democratic virtue signalling that hoped to incentivize responsible behaviors from non-democratic actors, which has never played out in practice; and

We believe that there are many latent inefficiencies in global bond markets that Coolabah is uniquely positioned to capitalize on.

In 2025, Coolabah traded AUD$129bn of bonds and CDS (USD$82bn). This was split by approximately A$71bn of credit trades combined with A$57bn of government and sub-sovereign trades.

In December, 10-year government bond yields rose around the world, led by Japan (+26bps), Australia (+23bps), Germany (+17bps), New Zealand (+15bps), France (+16bps), Italy (+15bps), and the US (+15bps). There were more modest moves in the UK, where 10-year gilt yields appreciated only 4bps.

A seasonal dip in new financial and corporate bond issuance, coupled with higher risk-free rates, helped physical and synthetic credit spreads perform in December. In derivative markets, the benchmark US and European investment-grade credit default swap indices, known as CDX IG and Main, compressed by 1.1bps and 2.1bps, respectively. This was echoed by the US and European high-yield indices, denoted by CDX HY and Xover, which also moved 6bps and 11bps tighter in the month.

In physical (or cash) bonds, investment-grade credit spreads across the US, UK, and European markets similarly drifted 3bps tighter in December. French and Italian government bond spreads to Bunds, which are another risk proxy, also contracted by about 1bp over the month.

In the Antipodes, spread moves were mixed: whereas benchmark 5-year Aussie major bank senior bond spreads climbed 2bps in December, subordinated major bank bond spreads declined 2bps. In the retail-centric ASX-listed hybrid market, 5-year major bank hybrid spreads plunged from 207bps to 171bps over the quarterly bank bill swap rate, albeit on diminishing turnover. This was a seasonally predictable dynamic amplified by scarcity into year-end as bank-issued hybrids are phased out by the regulator.

December USD IG issuance slowed sharply from November to US$38bn (YTD US$1.69trn), with muted supply across both financials and corporates. Coolabah selectively participated in attractively priced transactions, notably ANZ’s 3-year FRN, multiple tranches of Merck’s US$7.25bn multi-tranche deal, and S&P Global’s 5-year tranche. These transactions saw strong demand (approximately 5-7x covered) and post-pricing spread tightening.

In EUR investment-grade credit, supply rebounded to €17.5bn (approximately €9.5bn financials), compared with no issuance in December 2024. Despite seasonally light conditions, demand remained healthy, with deals averaging a 2.6x subscription rate. The standout transaction was Goldman Sachs’ dual-tranche HoldCo deal, which was well received following a long absence from the EUR market, complemented by solid demand for issues from BFCM and Deutsche Bank.

The rates sell-off hurt the performance of long-duration, or fixed-rate, bond indices. In USD, the Bloomberg Global Aggregate Corporate Index lost 0.10% in December as higher yields taxed fixed-rate bond prices. In contrast, the interest rate-hedged version of this index performed robustly, gaining 0.64%.

Given the relatively aggressive rise in Aussie government bond yields, the AusBond Composite Bond Index underperformed its Global Aggregate equivalent, losing 0.63% in December. The duration-hedged AusBond Floating-Rate Note Index performed better, offering a 0.37% return in the month.

Fund: Coolabah Active Global Bond Fund - Assisted Investor Class

Return/Risk: 5.02% pa gross/4.19% pa net (3.78% pa volatility)

Strategy commentary cont'd: Other risk markets were mixed. In the US, equities struggled to generate positive total returns: the S&P 500 was unchanged (0.06%) while the Nasdaq lost 0.67%. Japanese equities also lost ground, with the Nikkei 225 falling 0.37%. Other equity markets fared better, led by the UK (FTSE 100 up 2.26%), Europe (Euro Stoxx 50 up 2.25%), Australia (ASX 200 up 1.30%), and New Zealand (NZX 50 up 0.44%).

Brent Crude oil prices declined 3.72% in December, which is one disinflationary force in the global economy that could be accentuated by Trumpian interventions in Venezuela. That ultimate inflation hedge, gold, continued its record ascent, rising 1.89% over the month. Bitcoin’s slump persisted, dropping 3.59% to USD 87,648.

In 2025, there were several big market thematics, including the advent of the trade war, the AI revolution and related hyperscaler capex boom, the emergence of further Fed cuts, and then burgeoning investor insouciance with President Donald Trump’s otherwise radical economic and geopolitical ideas.

The trade-weighted US dollar depreciated by 7-8% as a result of de-dollarization diversification and the impact of the Fed’s cuts, although the damage was done in the first half of the year (in the second half, the trade-weighted USD index tracked sideways).

In bond markets, one of the best-performing assets in 2025 was global duration. The 5.9-year duration Bloomberg Global Aggregate Corporate Index returned between 6.62% (AUD) and 7.08% (USD). This exceeded the cash rate in AUD (3.88%) and USD (4.24%), and the duration-hedged version of the Global Aggregate Corporate benchmark, which returned between 5.47% (AUD) and 5.89% (USD).

In the Aussie market, both long-duration and floating-rate indices delivered inferior outcomes to their global counterparts: the 4.8-year duration AusBond Composite Bond Index returned only 3.17%, while the AusBond FRN Index rose 4.97%.

Coolabah’s best-performing strategies in 2025 were our long-duration funds benchmarked against the Bloomberg Global Aggregate Corporate Index. After fees, the Pacific Coolabah Global Active Credit Fund returned 7.82% in USD compared to the index’s 7.08%. The AUD version of this strategy, called the Coolabah Active Global Bond Fund, returned 7.28% net compared to the AUD index’s 6.62%.

Not far behind was Coolabah’s A+ rated, daily liquidity, and floating-rate Long Short Opportunities Fund, which returned 7.08% after fees. Similar strategies, like the Long Short Credit Fund and the Floating-Rate High Yield Fund, offered comparable outcomes. Please note that past performance is no guide to future returns and investors should read the fund's PDS to better understand its risks.

Fund: Coolabah Active Global Bond Fund - Assisted Investor Class

Return/Risk: 5.02% pa gross/4.19% pa net (3.78% pa volatility)

Strategy commentary cont'd:

Fund: Coolabah Active Global Bond Fund - Assisted Investor Class

Return/Risk: 5.02% pa gross/4.19% pa net (3.78% pa volatility)

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Performance Disclaimer:
Past performance does not assure future returns. 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. This information has been prepared by Coolabah Capital Investments (Retail) Pty Limited ACN 153 555 867. It is general information only and is not intended to provide you with financial advice. You should not rely on any information herein in making any investment decisions. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. The Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the funds should be considered before deciding whether to acquire or hold units in it. A PDS and TMD for these products can be obtained by visiting www.coolabahcapital.com. Neither Coolabah Capital Investments (Retail) Pty Limited, Equity Trustees Limited nor their respective shareholders, directors and associated businesses assume any liability to investors in connection with any investment in the funds, or guarantees the performance of any obligations to investors, the performance of the funds or any particular rate of return. The repayment of capital is not guaranteed. Investments in the funds are not deposits or liabilities of any of the above-mentioned parties, nor of any Authorised Deposit-taking Institution. The funds are subject to investment risks, which could include delays in repayment and/or loss of income and capital invested. Past performance is not an indicator of nor assures any future returns or risks. Coolabah Capital Investments (Retail) Pty Limited (ACN 153 555 867) is an authorised representative (#000414337) of Coolabah Capital Institutional Investments Pty Ltd (AFSL 482238). Equity Trustees Ltd (AFSL 240975) is the Responsible Entity for these funds. Equity Trustees Ltd is a subsidiary of EQT Holdings Limited (ACN 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). A Target Market Determination (TMD) is a document which is required to be made available from 5 October 2021. It describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed. The Fund’s Target Market Determination is available here' website.

Ratings Disclaimer:
MSCI Disclaimer: Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.