Australian Eagle Trust Long Short Fund
The Fund seeks to deliver significant outperformance by using Australian Eagle’s Long-Only investment philosophy in conjunction with a short-selling discipline.
Investment Highlights
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The Australian Eagle Trust, Long-Short Fund (the Fund) aims to provide capital growth over the long term through a leveraged investment in Australian shares. The Fund objective is to outperform the S&P/ASX 100 Accumulation Index over 5 years1. The Fund has delivered a net return of 14.99% p.a.2 since inception in July 2016 to 31 January 2024, outperforming its benchmark by 5.21% p.a.
Australian Eagle’s investment team seeks to buy superior quality stocks with a sensible risk buffer and hold those investments so that the longer-term advantages of those companies result in a superior rate of return. The investment process is designed to identify stocks that have the most characteristics of a superior company, whilst also offering a valuation edge. These superior companies can be characterised by quality management who are committed to shareholders, operate in a growing market, and have a long-term competitive advantage.
On the short side, Australian Eagle seeks to sell companies that do not display these characteristics or rank poorly on such characteristics compared to superior companies and exhibit poorer technical characteristics.
The Fund uses an index-independent approach and seeks diversification by investing in 25 to 35 stocks in the long portfolio and 12 to 25 stocks in the short portfolio. The Fund is generally 150% long and 50% short with a net 100% long position.
The process of finding companies is derived from a fundamental, bottom up-up research process, which Australian Eagle has consistently applied since 2004 for its long-only portfolios. The Fund typically invests in cash and cash equivalent instruments, Australian listed shares and other equity-like securities and may invest in derivatives.
The Fund is a unit trust that is a managed investment scheme which is registered with ASIC.
1 Outperformance of the S&P/ASX 100 Accumulation Index is not guaranteed.
2 Past performance is not indicative of future performance. Specific risks of the Fund may impact on the possibility of such a return in future.
The Fund aims to provide capital growth over the long term through leveraged investment in Australian securities.
Excess returns: an enhanced potential for excess returns through the use of short selling techniques and the use of leverage.
Double digit track record: to date the Fund has achieved significant out-performance, delivering a net return of 14.99% p.a. as of January 2024 since inception in July 2016.
Portfolio diversification: the Fund uses an index-independent approach and seeks diversification by investing in 25 to 35 stocks in the long portfolio and 12 to 25 stocks in the short portfolio. The short positions more fully utilise Australian Eagle’s research effort and may result in a lower portfolio correlation with markets by holding both long and short positions.
Access to an investment strategy: that would ordinarily be difficult for individual investors to employ, that uses an enhanced potential for excess returns through the use of short-selling techniques and leverage.
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Australian Eagle Asset Management (Australian Eagle) opened in Sydney in 2004 and specialises in Australian equities. The firm is owned and operated by its team and manages about $1.1 billion through two strategies: a domestic long-only product including Montgomery Funds and the Australian Eagle Trust Long-Short Fund.
Australian Eagle's investment process seeks to buy superior quality Australian securities with a sensible risk buffer and hold those investments so that the longer-term advantages of these companies manifest in a superior rate of return. Superior companies are characterised by quality management who are committed to shareholders, operate in a growing market, and have a long-term competitive advantage. On the short side, the Fund seeks to sell stocks in companies that do not display these characteristics or rank poorly compared to the superior companies.
Australian Eagle’s team is led by Chief Investment Officer Sean Sequeira and Senior Portfolio Manager Alan Kwan. Sean is a founding member of Australian Eagle and was appointed Chief Investment Officer in 2016. Sean has more than 32 years industry experience and has worked at the company for 19 years. Alan has been with Australian Eagle for 13 years.
Montgomery Investment Management has a partnership with Australian Eagle Asset Management to manage its Australian domestic large cap portfolios, including the Montgomery Funds and to distribute the Australian Eagle Trust Long-Short Fund, which is available for retail investors.
Founded by Roger Montgomery in 2010, Montgomery Investment Management (MIM) is an Australian boutique investment manager which looks after investments on behalf of individuals, families and their advisers. Montgomery's goal is to deliver superior long-term investment outcomes for clients and their advisers - in the form of capital preservation, income and growth.
Sean Sequeira jointly established Australian Eagle Asset Management in 2004. Sean was appointed Australian Eagle’s Chief Investment Officer in 2016. In addition to stock selection and analysis, Sean is responsible for all aspects of the investment process. Sean is head of Australian Eagle’s portfolio risk committee and process integrity committee. He is also one of the three investment team members that make up the portfolio construction committee.
Having gained global experience within investments banks in Europe during the late 1990’s, Sean returned to Australia and in 2000 working for Tower Asset Management dealing and analysing Australian equities under the mentorship of Albert Hung, co-founder of Australian Eagle.
Sean is a CFA® charterholder and holds a Bachelor of Business majoring in Finance and Economics from the University of Technology, Sydney.
Alan Kwan joined Australian Eagle Asset Management in 2011 and is the principal analyst for many of Australian Eagle’s portfolio stocks and the coverage universe, particularly medium-capitalisation companies. He is a key member of the portfolio management team and implementation process.
His prior experience includes 3.5 years as the Director Investment Management at WorkCover NSW, and investment roles with Aon Consulting and Legal & General. Alan spent nearly five years in Europe investing in global equity markets with Allianz Asset Management.
Alan is an Actuary, CFA® charterholder and holds a Bachelor of Commerce majoring in Actuarial studies from the University of Melbourne.
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The Australian Eagle Trust, Long-Short Fund is likely to be appropriate for a retail or wholesale client seeking capital growth to be used as a core or satellite component within a portfolio that has a medium or long investment timeframe, very high risk/return profile and needs daily access to capital. View the Target Market Determination here.
The Fund aims to provide capital growth over the longer term through a leveraged investment in Australian securities. Commensurate with this, the objective of the Fund is to outperform the S&P/ASX 100 Accumulation Index over a period of 5 years.
Australian Eagle seeks to invest in superior quality stocks with a sensible risk buffer and hold those investments so that the longer-term advantages of those companies manifest in a superior rate of return. The investment process is designed to identify those stocks that have the most characteristics of a superior company, whilst also offering a valuation edge.
On the short side, the Fund seeks to sell companies that do not display these characteristics or rank poorly on such characteristics compared to the superior companies and exhibit poorer technical characteristics.
The process of finding companies is derived from a fundamental, bottom up-up research process, which has been consistently applied since its founding in 2004 for long only portfolios.
The Fund typically invests in cash and cash equivalent instruments, Australian listed shares and other equity like securities. The Fund may invest in listed and unlisted derivatives such as futures, contracts for difference (‘CFDs’), options and swaps on ASX listed companies or indices. These instruments will primarily be used as a risk management tool.
The minimum investment in the Fund is $20,000.
Additional investments of $5,000 or more can be made.
The management fee is 1.3868% p.a. (including recoverable expenses of 0.1568% p.a.) and the performance fee is equal to 20.5% (inclusive of GST) of the out-performance of the net asset value of the Fund during the performance period over the return of the benchmark (being the S&P/ASX 100 Accumulation Index).
Historic unit prices are available here.
There is an online portal that investors can access to see their balance and download all statements. You will need to register online with your details and investor number.
Access the client log in here:
Investors may redeem all or part of their investments in the Fund by notifying the Administrator in writing. The minimum withdrawal is $5,000 and a $20,000 investment in the Fund must be maintained. A withdrawal request must be signed by the unit holder or their authorised signatories. The signed original of the request for withdrawal should be sent to the Administrator:
Mainstream Fund Services Pty Ltd
GPO Box 4968
Sydney NSW 2000
Withdrawal requests must be received by 12pm (noon) Sydney time for an application to receive the unit price calculated for the close of business of that day. Withdrawals will generally be paid within 7 Business Days after the Administrator receives a properly completed original withdrawal request and the relevant unit price has been finalised. Proceeds from withdrawals will be electronically credited to your bank account. Note that normal bank charges apply.
Statutory Statement
The issuer of this product is identified at the top of this page. The PDS and target market determination for the product are available in the Documents section of this listing. Prospective investors should consider the PDS before deciding to acquire the product. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.
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