The Regal Long Short Australian Equity Fund aims to outperform the S&P/ASX 300 accumulation index net of fees over a rolling five-year basis. The fund aims to have a tracking error of 4 – 8%.
The Manager selects stocks for the Underlying Fund primarily using a Four Step Stock Selection Process. To value shares, companies are researched from a fundamental perspective to derive their intrinsic value. The Manager incorporates key insights from different styles of investing (e.g. fundamental, market driven, technical) to determine stock weightings
The Regal Long Short Australian Equity Fund increased +5.6% in January, compared to an increase of +6.3% for the ASX 300 Accumulation Index.
January delivered a positive start to CY23, with strong gains delivered across the bulk of the global asset classes. Equity markets experienced one of their best starts to the year in decades, the S&P 500 rising +6.2%, the NASDAQ Composite increasing +10.7% and the ASX200 +6.2%. MSCI China delivered its best start to a calendar year ever, rising +12.2%, while small caps started the year in similar fashion, likely with further to go should markets remain buoyant. Small caps globally are now trading at one of the highest relative discounts in Australia and USA historically (over 35%, vs flat through cycle), rivalling valuations not seen since the GFC and tech wreck.
The Fund’s current overweight to the Energy and Materials sector contributed significantly to returns this month, with positive contributors coming from long positions in BHP (+8%), East Coast bulk commodity producer Stanmore Resources (+16%) and gold assaying technology business Chrysos (+42%). Another long position that contributed to returns this month was retailer Cettire (+50%) after higher beta/ e-commerce names saw a sharp rebound in January. The Fund’s main detractors this month stemmed from short positions in a number of technology, healthcare and consumer discretionary names.
What is Regal Long Short Australian Equity Regal Long Short Australian Equity is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Long Short Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Regal Long Short Australian Equity has Assets Under Management of 65.82 M with a management fee of 1%, a performance fee of 0.00% and a buy/sell spread fee of 0.6%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Regal Long Short Australian Equity has returned 0.51% in the last month. The previous three years have returned 10.78% annualised and 17.22% each year since inception, which is when the Regal Long Short Australian Equity first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Regal Long Short Australian Equity first started, the Sharpe ratio is NA with an annualised volatility of 17.22%. The maximum drawdown of the investment product in the last 12 months is -4.94% and -39.98% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Regal Long Short Australian Equity has a 12-month excess return when compared to the Domestic Equity - Long Short Index of 8.86% and 2.19% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Regal Long Short Australian Equity has produced Alpha over the Domestic Equity - Long Short Index of NA% in the last 12 months and NA% since inception.
What are similar investment products?
For a full list of investment products in the Domestic Equity - Long Short Index category, you can click here for the Peer Investment Report.
What level of diversification will Regal Long Short Australian Equity provide?
Regal Long Short Australian Equity has a correlation coefficient of 0.9 and a beta of 1 when compared to the Domestic Equity - Long Short Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Regal Long Short Australian Equity and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Regal Long Short Australian Equity with the ASX Index 200 Index?
For a full quantitative report on Regal Long Short Australian Equity compared to the ASX Index 200 Index, you can click here.
Can I sort and compare the Regal Long Short Australian Equity to do my own analysis?
To sort and compare the Regal Long Short Australian Equity financial metrics, please refer to the table above.
Has the Regal Long Short Australian Equity been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Regal Long Short Australian Equity?
How do I get in contact with the Regal Long Short Australian Equity?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Regal Long Short Australian Equity. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - September 30, 2023 The Regal Long Short Australian Equity Fund decreased -0.2% in September compared to a decrease of -2.9% in the ASX 300 Accumulation Index.
Global equity markets experienced their weakest month of performance for the year in September, adding additional weight to September’s growing reputation as being a month for capital markets. Soaring bond yields, rising oil prices and a further slowing in global economic growth all combined to deliver a widespread sell-off in equity markets globally, with US equity benchmark indices proving the significant underperformer across both developed and emerging markets. The S&P 500 declined -4.9%, the Dow Jones contracted -3.5%, while the tech-heavy NASDAQ fell -5.8%, as investors sought to digest the impact of rapidly rising long bond rates on longer duration assets. Australian equities outperformed their US counterparts, with the ASX 200 falling -3.5%, and the ASX Small Ordinaries declining -4.0%.
By sector, Consumer Discretionary, Materials and Energy were positive contributors, while Health Care, Information Technology and Financials contributed negatively. The Fund’s short book proved a strong contributor to returns over the month, with positions held across the travel, packaging and information technology sectors delivering positive returns. An overweight position to Australian-listed Singaporean mobile service provider Tuas (+11%) also contributed positively to returns, following the release of a better-than-expected full year earnings update, alongside long positions in diversified industrial services and media business Seven Group Holdings (+11%) and Australian gold producer Red 5 Limited (+8%). Detractors to performance included overweight positions in location-based app provider Life360 (-11%) and sustainable waste technology business Calix (-27%).
Performance Commentary - August 31, 2023 The Regal Long Short Australian Equity Fund decreased -0.4% in August compared to a decrease of -0.8% for the ASX 300 Accumulation Index.
Global equity markets were weaker through August, ending a five-month run of positive performances for most major developed global equity indices. Continued strength in US Treasury yields provided the greatest impediment to further stock gains over the month, as the global benchmark for risk-free rates, the US 10-Year Treasury yield, rose to its highest level since 2007. A rising bond yield environment has historically produced near-term headwinds for longer-duration assets and growth type equities, with the tech-heavy NASDAQ subsequently experiencing its largest monthly loss for 2023, declining -2.2%. Australian equities outperformed global peers, the ASX 200 declining -1.4% and ASX Small Ordinaries Index retreating -1.6%, as domestic investors digested a volatile semi-annual corporate reporting period, characterised by further evidence of rising domestic cost pressures, a weakening local consumer and rising interest expenses.
By sector, Information Technology, Utilities and Energy contributed positively, with key contributors including overweight positions in location-based app provider Life360 (+21%), following a strong company update and upgrade to earnings for CY2023, and an overweight position in gold assaying technology provider Chrysos Corporation (+27%), following the company reporting another strong quarter of growth and confirmation the business has exceeded its FY23 Prospectus targets for both revenue and EBITDA. Key detractors to performance this month included an overweight position in small business lender Judo Capital (-33%), following the company providing a weaker earnings update, and a long position in eye-focused biotech Opthea (-25%).
Performance Commentary - July 31, 2023 The Regal Long Short Australian Equity Fund increased 1.2% in July compared to an increase of 2.9% for the ASX 300 Accumulation Index.
Global equity markets experienced another positive month of performances in July, as market participants embraced further indications that the US economy remains ontrack for a ‘soft landing’, while Asia-focused investors mulled the possibility of a pending Chinese government stimulus package. Key inflation data again edged lower across a number of larger developed economies in July, whilst US markets took additional comfort from noticeably upbeat commentary from the 2Q US corporate earnings season, where 80% of companies reporting in July beat actual EPS estimates. US equity indices continued their climb higher, with the S&P 500 rising 3.1% in July, recording its fifth consecutive month of positive performance and longest monthly winning streak in two years. Australian equities remained well supported, albeit again underperforming their global counterparts, with the ASX 200 rising +2.9%, while ASX Small Ordinaries increased +3.5%.
By sector, Financials, Communication Services, and Materials were the strongest contributors, while Consumer Discretionary, Industrials and Real Estate contributed negatively. Positive contributors included overweight positions in payments technology business Tyro Payments (+22%), Australian energy major Woodside Petroleum (+10%) and connectivity business Superloop (+15%).
While Materials were a positive overall contributor, an overweight position in bulk commodity producers Bowen Coking Coal (-31%) detracted from returns in July, following weaker spot commodity prices over the month. Other negative contributors included overweight positions in infrastructure maintenance services business Ventia Services Group (-4%), global equities asset manager Platinum Asset Management (-9%) and aged care operator Estia Health (-6%).
Performance Commentary - May 31, 2023 The Regal Long Short Australian Equity Fund decreased -1.9% in May compared to a decrease of -2.5% for the ASX 300 Accumulation Index.
Global equity markets delivered a mixed set of performances in May, as market participants navigated the opposing forces of global macroeconomic uncertainties and another month of scorching share price rallies in mega cap technology stocks. Australian equities were weaker through the month, as softening commodity prices weighed heavily on the listed resources and energy sectors, while weaker-than-anticipated economic data, a surprise 25-bps RBA rate hike and firmer CPI print impacted listed businesses with exposure to the domestic economic cycle. The ASX 200 declined -3.0%, with consumer discretionary, financials and materials leading declines, while small caps continued their period of underperformance versus large caps, with the ASX Small Ordinaries retracing -3.3%.
By sector, Information Technology, Industrials and Consumer Discretionary contributed positively, while Materials, Financials and Health Care detracted from returns. An overweight position in location-based app provider Life360 (+34%) was a pleasing contributor in May, with the company releasing a strong 1Q23 update, reaffirming their FY23 guidance for US$300-310m in sales and confirming the business is now comfortably profitable and on track to generate FY23 cashflow of US$5-10m. The Fund also benefited this month from positive share price moves from overweight positions in sales enablement software provider Bigtincan (+32%), infrastructure services business Ventia Services Group (+3%) and short positions in Australian discretionary retailers. Key detractors to performance included overweight positions within the resources and energy sectors, including East Coast bulk commodity producer Stanmore Coal (-15%) and African-focused gold producer Perseus Mining (-18%).
Performance Commentary - March 31, 2023 The Regal Long Short Australian Equity Fund decreased -1.5% in March compared to a decrease of -0.2% for the ASX 300 Accumulation Index.
March was a tumultuous and volatile month for markets, characterised by large bond market swings, multiple bank collapses and a step-up in the M&A cycle. Monthly performances from major equity market indices (e.g., S&P 500 +3.5%, the NASDAQ +6.7% and the ASX200 -1.1%) largely belied the drama that unfolded during the month, with US bond yields staging their largest monthly decline since October 1987 in response to global banking worries and the collapse of both SVB Financial Group and Credit Suisse.
Amid the increased volatility, markets saw a flight to defensives with the gold price moving higher and large caps outperforming, while technology companies benefitted from lower bond yields.
Key positive contributors included long positions in Neuren Pharmaceuticals (+84%) on FDA approval for the company’s Daybue treatment for Rett Syndrome, and infrastructure service provider Ventia Services (+11%) as a result of ongoing positive momentum after recently delivering a strong result and the clearing of pre-IPO sellers after lock-up expiry.
The key detractors to performance included weaker performance in some key overweight small caps (albeit on limited news flow) as well as some short positions in mining stocks involved in decarbonisation
Performance Commentary - September 30, 2022 The Regal Long Short Australian Equity Fund returned -3.2% in September, compared to a decrease of -6.3% for the ASX 300 Accumulation Index.
The month of September has developed a reputation for delivering challenging periods for global equity markets, with September 2022 adding further weight to the claim. Continued fears surrounding the rise in global inflation, alongside increasingly hawkish commentary from the US Federal Reserve, saw US equity markets experience their worst September performance since 2008, with the S&P 500 declining -9.3% and the tech-heavy NASDAQ contracting -10.5%. While still weaker in an absolute sense, Australian equities outperformed the bulk of developed market peers, the ASX 200 declining -7.3%, taking CYTD returns to -13.0%
Although a negative absolute return for the month of September, positive alpha was delivered across both the long book and the short book. A continued overweight within the Fund to the Resources sector has been a strong source of alpha in recent months and this continued in September
Key contributors to returns included a long position in Terracom (+13%) alongside short positions in select lithium producers, coupled by a range of short positions across the consumer discretionary sector.
Key detractors included an overweight position in registry business Link Administration Holdings (-32%) and in sales enablement software provider Bigtincan (-23%).
Performance Commentary - August 31, 2022 The Regal Long Short Australian Equity Fund returned 8.9% in August, compared to an increase of 1.2% for the ASX 300 Accumulation Index. Despite initially reaching a four-month high mid-August, global equity markets retraced a large proportion of their recent gains as investors again considered the prospect of further interest rate hikes from the US Federal Reserve and the impact of a continued tightening in monetary conditions on broader economic growth. Australian equities were not immune to the broader market sell-off, however were somewhat insulated by another month of well-supported global commodity prices and a better-than-expected FY22 corporate results season that provided little evidence of any material weakening in underlying demand. The ASX 200 concluded the month +0.6%, while the ASX Small Ordinaries Index also increased +0.6%
By sector, Materials, Energy and Information Technology were the largest contributors to returns, while the Utilities, Health Care and Consumer Discretionary sectors produced flat returns. A continued overweight within the portfolio to commodity producers produced strong results in August, with overweights to tier one copper-gold producer OZ Minerals (+37%), graphite producer Syrah Resources (+27%) and East Coast coal producer Terracom (+23%) all contributing positively to returns. Strong earnings updates from overweight positions in Qualitas (+49%), Viva Energy (+12%) and mining equipment rental business Emeco (+24%) also contributed well, while overweight positions in assay technology business Chrysos (-19%), eye-focused drug developer Opthea (-11%) and sales enablement software provider Bigtincan (-10%) detracted from returns.
Product Snapshot
Product Overview
Performance Review
Peer Comparison
Product Details