COMPARATIVE RETURNS TO 31/07/18 (AFTER ALL FEES)
IMPORTANT NOTICE REGARDING CHANGE OF MANDATE & INVESTMENT MANAGER
Montgomery Investment Management Pty Ltd and Fundhost Limited are implementing some material changes to the investment process of the Montgomery Alpha Plus Fund with effect from 1 October 2018. Please download the Continuous Disclosure Notice Mandate & Investment Manager August 2018.
Montgomery's research identifies the proprietary combination of factors that cause listed businesses to create or destroy wealth.
The Montgomery Alpha Plus Fund (The Fund) purchases a portfolio of what we believe to be 15-35 high quality companies – those that score highest on the factors that create wealth and are expected to deliver above-average investment returns.
The Fund simultaneously sells short an equal-sized portfolio of 15-35 companies that we believe to be of inferior quality and prospects – those that score highest on the factors that destroy wealth and are expected to deliver below-average investment returns.
The combination of an equal-sized long and a short portfolio should reduce or remove exposure to the market’s direction, including large swings, which explains why such a fund is called a Market Neutral Fund.
The Montgomery Alpha Plus Fund is a market neutral fund investing in companies listed on the Australian and New Zealand exchanges and aims to generate positive returns while minimizing exposure to market direction.
Investment in The Fund is suited to individuals, families and their trusts and superannuation funds who may be less confident about the market’s direction and those who value the diversification benefits of returns that are largely uncorrelated with movements in the broader equity market. The minimum investment requirement is $50,000.
Would you prefer to talk it over? Call Dean Curnow or David Buckland on 02 8046 5000.
- What will the Montgomery Alpha Plus invest in?The Montgomery Alpha Plus Fund invests in securities listed on the Australian Securities Exchange or the New Zealand Stock Exchange. The Fund invests in a "Long Portfolio" of 15-35 equities, which the Manager deems to be of higher quality and prospects, and expects to deliver above average investment returns. The Fund also borrows and sells a "Short Portfolio" of 15-35 listed equities, which the Manager deems to be of inferior quality and prospects, and expects to deliver a below average investment return. The Fund will typically aim to hold equal values of Long and Short positions across two portfolios. Long positions will be held in the "Long Portfolio" and Short positions in the "Short Portfolio". In constructing the portfolios this way, The Fund aims to reduce market risk, which is the risk that equity markets as a whole may rise or fall, independent of the investment merits of individual stocks. The Fund aims to profit from the Manager’s ability to identify and buy securities that will do relatively well and to identify and sell securities that will do relatively poorly.
- Is the Montgomery Alpha Plus Fund suitable for me?Investment in The Fund is suited to individuals, families and their trusts and superannuation funds who wish to be indifferent to the market’s direction and those who value the diversification benefits of returns that are largely uncorrelated with movements in the broader equity market. Investment in The Fund is suited to those investors who want exposure to an investment strategy whose returns will reflect the security selection skills of the Manager, and will be largely uncorrelated with movements in the broader equity market. No return of capital can be assured, however the strategy employed by The Fund is intended to generate capital growth and income irrespective of market direction. An investment in The Fund is speculative and should only be made by investors who have a broader, diversified investment portfolio and who can bear the risk of loss of some or all of their investment. We recommend that you obtain professional advice before investing in The Fund (from an appropriately licensed financial adviser and/or tax adviser).
- What income distributions can I expect from The Fund?The Fund will distribute any available income annually (as at 30 June). However, The Fund’s income may vary considerably from year to year, and in some years no distribution may be paid. An investment in The Fund may therefore not be suitable for investors seeking a regular income stream for financial or tax planning purposes.
- Is my capital protected?Returns are not guaranteed. Montgomery believes that the inclusion of appropriately-selected Short Positions in The Fund’s portfolio reduces an investor’s exposure to the market and its vicissitudes overall.