Performance Report

February 2026

Fund: Coolabah Global Floating-Rate High Yield Complex ETF

Strategy: Global Floating-Rate High Yield

Return (since Feb. 2025): 7.71% pa gross (6.53% pa net)

Net return volatility (since Feb. 2025): 1.64% pa

Objective: The investment objective of the Fund is to provide investors with exposure to a global floating-rate portfolio of investment-grade bonds and hybrid securities with enhanced yields.

Strategy: The Fund aims to generate higher income than other traditional fixed income investments by investing in a floating-rate portfolio of investment-grade bonds and hybrid securities issued predominately by global banks and enhancing the yields (or interest-rate) through the use of gearing (or leverage). It also has the capacity to invest in government bonds, corporate bonds and hybrid securities. The Fund aims to offer a floating-rate profile by targeting an interest rate duration risk of less than 3 months. The Fund can borrow and use derivatives, meaning the Fund is geared (or leveraged). Leverage can amplify gains and also amplify losses. The Fund does not invest in equities, unrated unlisted debt securities or property.

Period Ending 2026-02-28	Gross Return	Net Return	Bloomberg AusBond Credit FRN 0+ Yr Index	Gross Excess Return^‡	Net Excess Return^‡
1 month	0.07%	-0.01%	0.32%	-0.25%	-0.33%
3 months	1.71%	1.43%	1.15%	0.55%	0.28%
6 months	3.41%	2.84%	2.27%	1.14%	0.57%
1 year	7.54%	6.38%	4.80%	2.74%	1.58%
Inception pa Feb. 2025	7.71%	6.53%	4.84%	2.87%	1.69%

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+	Av. Interest Rate (Gross Running Yield)	5.98%
Portfolio MSCI ESG Rating	AA	Modified Interest Rate Duration	0.27 years
No. Cash Accounts	14	Gearing Permitted?	Yes
No. Notes and Bonds	192	Net Annual Volatility (since incep.)	1.64%

Fund: Coolabah Global Floating-Rate High Yield Complex ETF

Return/Risk: 7.71% pa gross/6.53% pa net (1.64% pa volatility)

Portfolio Managers

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

Ticker	YLDX	Fund Inception	17-Feb-2025
ISIN	AU0000380826	Distributions	Monthly
Asset-Class	Global Floating Rate	Unit Pricing	Daily (earnings accrue daily)
Target Objective	Yield focused	Min. Investment	AUD$1,000
Investment Manager	Coolabah Capital Investments (Retail)	Withdrawals	Daily requests (funds normally in 3 days)
Responsible Entity	Equity Trustees	Buy/Sell Spread	On exchange
Custodian	Citigroup	Mgt. & Admin Fee	1.00% pa

Fund: Coolabah Global Floating-Rate High Yield Complex ETF

Return/Risk: 7.71% pa gross/6.53% pa net (1.64% pa volatility)

Portfolio commentary: In February, the zero-duration daily liquidity Coolabah Global Floating-Rate High Yield Fund (YLDX) returned 0.07% gross (-0.01% net), compared to the AusBond Bank Bill Index (0.28%), the RBA Overnight Cash Rate (0.29%), and the AusBond Credit FRN Index (0.32%). Over the previous 6 months, YLDX returned 3.41% gross (2.84% net), outperforming the RBA Overnight Cash Rate (1.80%), the AusBond Bank Bill Index (1.80%), and the AusBond Credit FRN Index (2.27%). YLDX ended February with a running yield of 5.98% pa, a weighted-average credit rating of A+, and a portfolio weighted average MSCI ESG rating of AA.

Since the inception of YLDX in February 2025, it has returned 7.71% pa gross (6.53% pa net), outperforming the RBA Overnight Cash Rate (3.79% pa), the AusBond Bank Bill Index (3.86% pa), and the AusBond Credit FRN Index (4.84% pa). Since inception, YLDX's Sharpe Ratio, which measures risk-adjusted returns, has been 2.39x gross (1.67x net). While YLDX's return volatility since inception has been low at around 1.64% 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: Following strong performance of risk assets in January, February saw a retracement. The Nasdaq 100 and S&P 500 declined 2.3% and 0.8% respectively, despite resilient economic data, with US payrolls posting their largest gain in over a year and the ISM manufacturing index reaching its strongest level since 2022.

Weakness was largely driven by concerns around AI disintermediating white-collar sectors, with software and services falling 10% over the month. Sentiment was further unsettled by a widely circulated Citrini Research note suggesting aggressive AI adoption could tip the US economy into recession by 2027.

In contrast, Japanese equities performed strongly, with Prime Minister Takaichi's commanding election victory helping drive the Nikkei up 10.4% to a new record high.

Although US military action in Iran occurred after month-end - and was not therefore reflected in February's asset performance - escalating tensions between the two countries were already evident in commodity markets, with Brent crude rising 2.5% to a seven-month high.

The US Supreme Court struck down President Trump's IEEPA-based tariffs, ruling that the statute did not grant such powers. The administration responded quickly by announcing a 10% global tariff for 150 days, adding further uncertainty around the trajectory of US trade policy.

Amid geopolitical tensions, trade uncertainty and concerns around AI-driven disruption, safe-haven demand increased and global benchmark 10-year government bond yields declined sharply: US Treasuries fell 30bps, German Bunds 20bps, UK Gilts 29bps and French OATs 21bps.

Credit markets widened in line with the broader risk-off tone, with US and European investment-grade spreads ending the month 10bps and 11bps wider respectively. In Australia, senior spreads were unchanged and subordinated bond spreads rose by 4bps. This taxed the performance of interest-rate hedged, or zero-duration, strategies.

In Europe, €85bn of investment-grade credit was issued during the month, including €38bn from financials and €47bn from corporates. Financials deals averaged a 2.4x subscription rate, reflecting falling yields and deals pricing with limited new-issue premium. The standout transaction was Google's five-part £5.5bn issuance, which attracted £30bn of demand and included a 100-year tranche. Other notable issuers included Goldman Sachs, BPCE and NatWest.

In the US, $193bn of investment-grade credit was issued in February, heavily skewed toward corporates, which accounted for around 70% of total supply. Within financials, most deals priced with limited new-issue concession and, as a result, average secondary performance was marginally weaker, with spreads around 0.4bps wider on the break.

Fund: Coolabah Global Floating-Rate High Yield Complex ETF

Return/Risk: 7.71% pa gross/6.53% pa net (1.64% pa volatility)

Strategy commentary cont'd: In Australia, A$24.5bn of investment-grade credit was issued during the month, this was heavily skewed towards financials, making up 87% of issuance. Within financials issuance, we saw issuers initially favour senior bonds before issuing more subordinated debt. Credit spreads are tight compared with historical ranges, especially in subordinated debt, so as issuance continued, we saw demand fall despite reasonable new-issue concessions.

A$ financial senior deals averaged a 2.8x subscription rate compared to financial subordinated deals which averaged a 2.2x subscription rate. Semis issued around A$12bn of bonds during the month across syndications, tenders, and reverse enquiries. All states issued except for ACT. Syndication accounted for A$8.5bn of bonds, with an average subscription rate of 3.75x, and a significant increase in offshore participation.

In sovereign markets, the month of February was characterised by heightened market uncertainty. Iran has dominated the headlines, with its talks with the US almost a daily focus for markets. New Federal Reserve Chair Kevin Warsh, announced on the last day of January, has also been at the centre of attention, with market participants attempting to discern both the direction and potential impact of his future policy stance.

The general market response has been to buy treasuries — and safe havens more broadly. Gold is once again higher on the month, just off its highs, and the US 2s30s curve is 5bps steeper, reflecting what could be a more dovish Fed at the front end paired with a tighter stance on the Fed balance sheet at the longer end.

Despite these market headwinds, February was still a decent month for issuance, with the main European sovereigns now, on average, around 20% through their annual funding needs, and Tier 1 SSA issuers such as the European Investment Bank having completed around 50% of their global funding programmes for the year.

Avoid cockroaches like the plague in the higher-for-longer world

We have been focused on several core macro theses. The first is that AI could be inflationary, rather than deflationary, given the spending and ensuing bottlenecks it is generating, without yet displacing large swathes of the labour market.

A second idea is that inflation may be stickier than markets expect in light of rampant public spending, low unemployment rates, and, in countries like Australia, New Zealand and the UK, persistently dire productivity.

As our colleague Kieran Davies recently showed, core inflation in most developed nations has been stuck above their central banks' targets. Australia is distinguished by the fact that we are the only country where unemployment is lower than the so-called natural rate that is compatible with stable inflation.