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Printed: 07 July 2022 8:37 PM

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16 Aug 2021 - Performance Report: Paragon Australian Long Short Fund
By: Australian Fund Monitors

Report Date16 August 2021
ManagerParagon Funds Management
Fund NameParagon Australian Long Short Fund
StrategyEquity Long/Short
Latest Return DateJuly 2021
Latest Return-2.00%
Latest 6 Months22.33%
Latest 12 Months24.28%
Latest 24 Months (pa)21.98%
Annualised Since Inception13.42%
Inception Date28 February 2013
FUM (millions)AU$47.4
Fund OverviewThe Paragon Fund is a concentrated long/short Australian listed equities product that is fundamentally driven with a focus on the industrial and resource sectors.

Paragon's unique investment style, comprising thematic led idea generation followed with an in depth research effort, results in a concentrated portfolio of high conviction stocks.

Conviction in bottom up analysis drives the investment case and ultimate position sizing:

* Both quantitative analysis - probability weighted high/low/base case valuations - and qualitative analysis - company meetings, assessing management, the business model, balance sheet strength and likely direction of returns - collectively form Paragon's overall view for each investment case.
* Paragon will then allocate weighting to each investment opportunity based on a risk/reward profile, capped to defined investment parameters by market cap, which are continually monitored as part of Paragon's overall risk management framework.

The objective of the Paragon Fund is to produce absolute returns in excess of 10% p.a. over a 3-5 year time horizon with a low correlation to the Australian equities market.
Manager CommentsOver the past 12 months, the Paragon Australian Long Short Fund has risen by +24.28%, and since inception in February 2013 it has returned +13.42% per annum, a difference of +4.58% relative to the ASX 200 Total Return Index which has returned +8.84% on an annualised basis over the same period.

The fund's Sortino ratio (which excludes volatility in positive months) has ranged from a high of 1.45 for performance over the most recent 12 months to a low of 0.32 over the latest 60 months, and is 0.86 for performance since inception. By contrast, the ASX 200 Total Return Index's Sortino for performance since March 2013 is 0.7.

Since inception in February 2013 in the months where the market was positive, the fund has provided positive returns 68% of the time, contributing to an up-capture ratio for returns since inception of 90.38%. Over all other periods, the fund's up-capture ratio has ranged from a high of 182% over the most recent 24 months to a low of 95.67% over the latest 60 months. An up-capture ratio greater than 100% indicates that, on average, the fund has outperformed in the market's positive months over the specified period.

The fund's down-capture ratio for returns since inception is 74.72%, highlighting its capacity to outperform in negative markets over the long-term.
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