Performance Report

May 2025

Fund: Coolabah Active Global Bond Fund - Institutional Class

Strategy: Global Active Credit

Return (since Sep. 2024): 0.89% gross (0.50% net)

Net return volatility (since Sep. 2024): 4.50% 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 2025-05-31	Gross Return	Net Return	Bloomberg Global Agg Corp Index (AUD Hedged)	Gross Excess Return^†	Net Excess Return^†
1 month	1.17%	1.12%	0.18%	0.99%	0.94%
3 months	0.16%	0.02%	0.08%	0.08%	-0.05%
6 months	1.16%	0.88%	0.86%	0.30%	0.02%
Inception Sep. 2024	0.89%	0.50%	0.30%	0.59%	0.20%

^† 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 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	6.37 years
Portfolio MSCI ESG Rating	AA	Gearing Permitted?	Yes
No. Cash Accounts	14	Net Annual Volatility (since incep.)	4.50%

No. Notes and Bonds

127

Fund: Coolabah Active Global Bond Fund - Institutional Class

Return/Risk: 0.89% gross/0.50% net (4.50% 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 0.89% gross (0.50% 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 - Institutional 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 4.50% 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 - Institutional Class.

Portfolio Managers

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

APIR Code	ETL1382AU	Fund Inception	23-Sep-24
ISIN	AU60ETL13827	Distributions	Quarterly
Benchmark	Bloomberg Global Agg Corp Index (AUD hedged)	Unit Pricing	Daily (earnings accrue daily)
Asset-Class	Global Credit	Mgt. & Admin Fee	0.55% 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 - Institutional Class

Return/Risk: 0.89% gross/0.50% net (4.50% pa volatility)

Portfolio commentary: In May, the long duration daily liquidity Coolabah Active Global Bond Fund (CAGBF) returned 1.17% gross (1.12% net), outperforming the Bloomberg Global Aggregate Corporate Index Hedged AUD (0.18%) by 0.99% (0.94% net). Over the previous 6 months, CAGBF returned 1.16% gross (0.88% net), outperforming the Bloomberg Global Aggregate Corporate Index Hedged AUD (0.86%) by 0.30% (0.02% net). CAGBF ended May with a running yield of 5.77% 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 0.89% gross (0.50% net), outperforming the Bloomberg Global Aggregate Corporate Index Hedged AUD (0.30%) by 0.59% (0.20% net). While CAGBF's return volatility since inception has been low at around 4.50% 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: It's worth recapping that Coolabah was exceptionally bearish on risk markets prior to April, writing in the AFR on 14 March that US equities would likely decline 20-40%. As it transpired, the S&P500 fell 22% while the Nasdaq slumped 27%.

We had reduced risk for 12 months, cutting US and European bond exposures, selling hybrids and subordinated bonds, and moving up the capital stack into the safest and highest rated senior-ranking bonds. In levered portfolios, we also actively reduced gearing. In late March we further hedged 15-25% of all our global credit risk.

While Coolabah was bearish, we swung 180 degrees on 9 April, removing all hedges/shorts and aggressively buying $1.7bn of bonds on that day alone. We proceeded to buy almost $5 billion of bonds between 9 and 30 April (see summary below). Indeed, we even outlined the rationale for this shift in the AFR on 11 April, arguing that that time presented an enticing buying opportunity.

Despite many investors complaining about market illiquidity in April, Coolabah provided its clients with exceptional liquidity and traded around $15 billion of bonds, including $11 billion of credit. We definitely heard anecdotes of investors in riskier debt securities struggling with illiquidity, which was not a problem in our markets.

The catalyst for the shift in Coolabah's risk posture was the assessment that President Donald Trump's backflip on tariffs on 9 April would trigger a very significant risk rally. This is what has played out in the period since.