Firetrail Absolute Return Fund

Uncorrelated absolute returns

Fund objective

The Fund aims to outperform the RBA Cash Rate over the medium to long term.

Key features

The Fund is an absolute return fund which aims to generate positive returns in all market environments.

The Fund is typically expected to be market neutral (net market exposure generally between +/-5%), which effectively means the Fund is constructed in a way where returns are not dependent on the performance of the underlying share market.

The Fund achieves market neutrality by investing in a combination of long and short positions in equity securities listed, or expected to be listed, on the Australian Securities Exchange (ASX), as well as international markets. Exposure may also be through the use of derivatives.

Long only positions are selected using in-depth fundamental analysis. The short portfolio is constructed using a combination of fundamental analysis, systematic strategies and other value-adding strategies.

Portfolio Managers

James Miller, Patrick Hodgens

Legal structure

Unlisted, open-ended Australian unit trust

Distribution

Semi-annually, subject to the Fund having sufficient distributable income as at 30 June and 31 December.

Management fee 1,2

1.50% p.a.

Performance fee 3,4

20% of the Fund’s excess return versus its benchmark, net of the management fee

Minimum initial investment5

A$20,000

Buy / sell spread

+ 0.50% / – 0.50%

  Performance

Strategy Composite Performance as at 31 October 2019 (after fees)**
Month Quarter FYTD 1 Yr Fund Incept** 3 Yrs (pa) Strategy Incept****
Fund* -0.48% 1.87% 5.00% -5.19% -2.43%      –
Strategy composite*** -0.48% 1.87% 5.00% -5.19%   – 1.38% 11.19%
Benchmark 0.06% 0.23% 0.32% 1.29% 1.37% 1.14% 1.55%
Out/Underperformance -0.54% 1.64% 4.69% -6.48% -3.80% -0.03% 9.64%

Latest Performance Report

Past performance is not an indicator of future performance.

*Firetrail Absolute Return Fund (‘Fund’). Net Fund returns are calculated based on exit price with distributions reinvested, after ongoing fees and expenses but
excluding taxation. **Fund inception is 14 March 2018. ***The Fund has been operating since 14 March 2018. To give a longer-term view of our performance for this
asset class, we have also shown returns for the Firetrail Absolute Return Strategy Composite (‘Strategy’) which has been operating since 30 June 2015. Strategy
performance has been calculated using the monthly returns (after fees) of the Fund from 14 March 2018 to current date, as well as the monthly returns of the Macquarie
Pure Alpha Fund (after fees) between 30 June 2015 to 23 November 2017. The Fund employs the same strategy as was used by the same investment team that
managed the Macquarie Pure Alpha Fund as at 23 November 2017. Firetrail has records that document and support the performance achieved as the Macquarie Pure
Alpha Fund. The composite returns for the Strategy and the RBA Cash Rate (Benchmark) exclude returns between 24 November 2017 and 13 March 2018. During this
period the investment team did not manage the Strategy. As such, the annualised performance periods stated are inclusive of the combined composite monthly returns,
and do not include the period when the team were not managing the Strategy. For example, the annualised return over 3 years for the Strategy and benchmark are
inclusive of 36 monthly performance periods available in the composite return period, excluding the period between 23 November 2017 and 13 March 2018. For
additional information regarding the performance please contact us through the link on our website. Net Fund returns are in AUD terms. Net Fund returns are calculated
based on exit price with distributions reinvested, after ongoing fees and expenses but excluding taxation. Past performance is for illustrative purposes only and is not
indicative of future performance. ****Strategy inception 30 June 2015.

Prices and distributions

Key information

Investment guidelines

The Fund’s key investment guidelines are summarised below. For further details, please refer to the latest Product Disclosure Statement.

APIR WHT5134AU
Benchmark RBA Cash Rate
Market exposure

Typical net market exposure +/-5%

Max net market exposure range +/-30%

Derivatives may be used to gain equities exposure up to a max of 200% of the net asset value of the Fund.

Suitable investor profile The Fund may be suitable for investors who are looking to outperform the RBA Cash Rate over the medium to long term and are prepared to accept the risks of the Fund set out in section 6 of the Product Disclosure Statement.
Suggested investment timeframe 5 years or more
Short selling Permitted
Borrowings The Fund will borrow stock to enable short positions as part of the investment strategy. The Fund will not borrow cash.

 Investor Forms

Investor Forms
Available Platforms
AMP North
AMP PortfolioCare
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Netwealth
uXchange
Ratings

**

1.The management fee is payable to the Investment Manager for managing the investments of the Fund. The management fee is calculated on the Fund’s net asset value, reflected in the daily unit price and payable monthly in arrears from the Fund.

2.Fees are inclusive of GST and of any applicable reduced input tax credits (‘RITC’).

3.The performance fee is calculated and accrued each business day and is payable quarterly, if applicable

4.The Fund’s benchmark is the RBA Cash Rate. Refer to ‘Performance fees’ information in ‘Additional explanation of fees and costs’ in the Product Disclosure Statement for further information.

5.The Responsible Entity has the discretion to accept lower initial investments. Does not apply to IDPS investments.

^The portfolio allocation ranges provided are indicative only. The Fund will be rebalanced within a resonable period of time should the exposure move outside these ranges. The Fund is typically expected to be fully invested. A portion of the portfolio may be allocated to cash or derivatives for liquidity purposes. The Fund may hold exchange traded derivatives to a maximum of 10% of the Fund’s NAV.

** The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (WHT5134AU assigned February 2019) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only.  This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice.  It is not a specific recommendation to purchase, sell or hold the relevant product(s).  Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs.  Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website.  Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments.  Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at https://www.zenithpartners.com.au/regulatory-guidelines-funds-research