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27 Oct 2022 - Performance Report: PURE Income and Growth Fund


Report Date27 October 2022
ManagerPURE Asset Management
Fund NamePURE Income and Growth Fund
Latest Return DateSeptember 2022
Latest Return-1.60%
Latest 6 Months-3.00%
Latest 12 Months-3.83%
Latest 24 Months (pa)5.42%
Annualised Since Inception14.51%
Inception Date01 December 2018
FUM (millions)AU$148.9
Fund OverviewThe PURE Income & Growth Fund is a specialist hybrid credit fund with an absolute return focus, providing growth capital to Australian emerging industrial companies. The aim is to offer smaller Australian companies ($20-200m market cap) a less dilutive source of capital than equity, while partnering with them to achieve their potential.

For fund investors, The Income and Growth Fund offers a unique risk/return profile. This form of investing includes a high yield, yet retains equity exposure to successful growth stories. Furthermore, the Fund's superior position in the investee Company's capital structure insulates investors from capital loss.

PURE targets a return of 15% per annum through a mixture of Income (8-9%) and capital growth. While most investments involve ASX listed companies, the fund mandate retains modest flexibility to capitalise on attractive pre-IPO opportunities.
Manager CommentsThe PURE Income and Growth Fund returned -1.6% in September, an outperformance of +4.57% compared with the ASX 200 Total Return Index which fell by -6.17%.

The PURE Income and Growth Fund has a track record of 3 years and 10 months and therefore comparison over all market conditions and against its peers is limited. However, the fund has outperformed the ASX 200 Total Return Index since inception in December 2018, providing investors with an annualised return of 14.51% compared with the index's return of 7.61% over the same period.

On a calendar year basis, the fund has only experienced a negative annual return once in the 3 years and 10 months since its inception. Over the past 12 months, the fund's largest drawdown was -4.97% vs the index's -11.9%, and since inception in December 2018 the fund's largest drawdown was -5.86% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in February 2020 and lasted 3 months, reaching its lowest point during March 2020. The fund had completely recovered its losses by May 2020.

The Manager has delivered these returns with 4.46% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 two times over the past three years and which currently sits at 1.09 since inception. The fund has provided positive monthly returns 71% of the time in rising markets and 40% of the time during periods of market decline, contributing to an up-capture ratio since inception of 45% and a down-capture ratio of 5%.
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