COMPARATIVE RETURNS TO 31/03/19 (AFTER ALL FEES)
Established in August 2016, The Montgomery Alpha Plus Fund (The Fund) purchases a portfolio of 80-180 Australian and international listed equities, that we expect to deliver above average investment returns. The Fund simultaneously sells short an equal-sized portfolio of 80-180 Australian and international listed equities, that we expect to deliver below average investment returns. The Fund will also invest in derivatives and cash.
In this way, The Fund aims to benefit from our ability to consistently apply a systematic process identifying both relatively superior investment candidates, as well as relatively inferior investment candidates.
Montgomery's distinctive research identifies the proprietary combination of factors that cause listed businesses to create or destroy wealth.
The combination of an equal-sized long and a short portfolio should reduce 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 that 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 Australian and international stock exchanges. The Fund buys securities (Long positions) and also borrows securities to sell (Short positions) in order to benefit from both rising and falling share prices, and to manage portfolio risk. 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 Montgomery consistently applying a systematic process 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 persons who want exposure to an investment strategy whose returns will reflect the systematic process applied by the Montgomery team, and will be largely uncorrelated with movements in the broader equity market. Although no one promises that you will make money – or that your original capital will be returned – 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, diverse 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. No one promises that you will make any money or that your initial capital will be returned. However, 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.