Firetrail Australian High Conviction Fund
31 March 2024
Key Facts
| Index Used: | ASX 200 Total Return | Discretionary/Quantitative: | Discretionary |
| Peer Group: | Equity Long - Large Cap - Australia | FUM (millions): | AU$ 555m |
| Investment Style: | Blend | Fund Inception Date: | March 2018 |
| Geographic Mandate: | Australia/NZ | Latest Return Date: | March 2024 |
| Investor Type: | Wholesale & Retail | Status: | Open |
| Minimum Investment: | AU$ 20,000 | Investment Frequency: | Daily |
Manager Details
Pinnacle Investment Management Limited are partners and minority shareholders in the business.
Prior to establishing Firetrail, the portfolio management team including Patrick Hodgens, Blake Henricks and James Miller worked together at Macquarie for over a decade. The team were responsible for managing the Macquarie High Conviction Fund, which delivered 10.6% p.a. (after fees) from inception in November 2005 to October 2017.
Pinnacle Investment Management Limited are partners and minority shareholders in the business.
Strategy Description
The process employs an unconstrained approach to fundamental research to identify companies Firetrail believe offer the most attractive forecast returns based on our medium-term view.
The Investment Manager aims to construct a high conviction portfolio of companies which the portfolio management team believes to be undervalued over a 3-year investment horizon.
The portfolio construction methodology takes into account the Investment Manager's conviction in a company, stock specific factors such as a company's volatility and liquidity, the portfolio's overall exposure to macroeconomic or thematic risk, as well as the total risk within the portfolio. Each of these factors will determine a potential investment's suitability and position size in the portfolio.
While the portfolio may hold cash for liquidity purposes, it is typically expected to be close to fully invested.
The process employs an unconstrained approach to fundamental research to identify companies Firetrail believe offer the most attractive forecast returns based on our medium-term view.
The Investment Manager aims to construct a high conviction portfolio of companies which the portfolio management team believes to be undervalued over a 3-year investment horizon.
Fund Fees
| Management Fee: | 0.9% | Performance Fee: | 15% |
| Buy Spread: | 0.15% | Sell spread: | 0.15% |
| High Water Mark: | Yes | Hurdle: | S&P/ASX 200 Accumulation Index |
Fund Structure
| Offshore/Onshore: | Onshore | Fund Structure: | Unit Trust |
| Share Classes: | AU$ | Trustee/RE: | Pinnacle Fund Services Limited |
| Administrator: | Citigroup | Prime Broker: | N/A |
| Custodian: | Citigroup | Legal: | N/A |
Ratings & Availability
Research Ratings
Platform Availability
Performance Review
The Firetrail Australian High Conviction Fund has a track record of 6 years and 1 month and has underperformed the ASX 200 Total Return benchmark since inception in March 2018, providing investors with an annualised return of 5.7% compared with the benchmark's return of 8.8% over the same period.
The Manager has delivered these returns with 1.46% more volatility than the benchmark, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.33 since inception. The fund has provided positive monthly returns 87% of the time in rising markets and 8% of the time during periods of market decline, contributing to an up-capture ratio since inception of 81% and a down-capture ratio of 101%.
The Firetrail Australian High Conviction Fund rose by +4.76% in March, an outperformance of +1.49% compared with the ASX 200 Total Return benchmark which rose by +3.27%. Over the past 12 months, the fund's best monthly return was +5.98% compared with the benchmark's best return of +7.26%, and its worst monthly return was -4.89% vs the benchmark's worst return over the same period of -3.78%.
| Year | Jan % | Feb % | Mar % | Apr % | May % | Jun % | Jul % | Aug % | Sep % | Oct % | Nov % | Dec % | YTD % |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | -0.37 | -1.84 | 4.76 | NA | NA | NA | NA | NA | NA | NA | NA | NA | 2.45 |
| 2023 | 4.90 | -0.59 | -0.56 | 2.92 | -0.73 | -0.09 | 4.09 | -2.37 | -2.89 | -4.89 | 2.84 | 5.98 | 8.28 |
| 2022 | -5.18 | 2.61 | 4.11 | -1.44 | -3.45 | -8.39 | 3.75 | 1.41 | -6.55 | 4.76 | 6.24 | -1.95 | -5.25 |
| 2021 | 0.31 | 3.56 | 2.76 | 2.28 | 2.33 | 0.33 | 0.72 | 4.03 | -1.49 | 0.62 | -0.03 | 1.96 | 18.67 |
| 2020 | 1.46 | -8.56 | -22.97 | 14.73 | 5.33 | 0.12 | 0.56 | 2.36 | -2.46 | 2.26 | 13.70 | 2.50 | 3.45 |
| 2019 | 4.13 | 5.56 | -0.24 | 3.15 | -1.78 | 2.73 | 3.43 | -3.16 | 0.76 | 0.30 | 5.57 | -1.44 | 20.21 |
| 2018 | NA | NA | -2.32 | 3.81 | 2.66 | 1.53 | 1.43 | -3.22 | -0.39 | -7.29 | -4.61 | -1.16 | -9.66 |
Annual Returns
Over the past 12 months, the fund has risen by +6.98% compared with the benchmark which has returned +14.45%, for a difference of -7.47%. Since inception in March 2018, the fund has returned +5.7% per annum, a difference of -3.1% relative to the benchmark which has returned +8.8% on an annualised basis over the same period.
Cumulative Returns
On a cumulative basis (assuming reinvestment of distributions), $100 invested since inception would have become $140. The same amount invested in the benchmark over the same period would have become $167.
Annual Returns %
Volatility and Risk
Annual Standard Deviation
The fund's returns over the past 12 months have been achieved with a volatility of 11.36% vs the index's 10.87%. The annualised volatility of the fund's returns since inception in March 2018 is 16.95% vs the index's 15.49%. Over all other periods, the fund's volatility relative to the benchmark has been varied.
Sharpe Ratio
The fund's Sharpe ratio has ranged from a high of 0.98 for performance over the most recent 48 months to a low of -0.02 over the latest 24 months, and is 0.33 for performance since inception. By contrast, the ASX 200 Total Return Index's Sharpe for performance since March 2018 is 0.53.
Annual Standard Deviation
Sharpe Ratio
Performance in Positive Markets
Since inception in March 2018 in the months where the market was positive, the fund has provided positive returns 87% of the time, contributing to an up-capture ratio for returns since inception of 80.79%. Over all other periods, the fund's up-capture ratio has ranged from a high of 93.14% over the most recent 48 months to a low of 72.61% over the latest 36 months.
Performance in Negative Markets
Since inception in March 2018 in the months where the market was negative, the fund has provided positive returns 8% of the time, contributing to a down-capture ratio for returns since inception of 100.89%. Over all other periods, the fund's down-capture ratio has ranged from a high of 109.9% over the most recent 12 months to a low of 92.74% over the latest 48 months. A down-capture ratio less than 100% indicates that, on average, the fund has outperformed in the market's negative months.
Average Return in +ve Market %
Average Return in -ve Market %
Sortino Ratio
The fund's Sortino ratio (which excludes volatility in positive months) has ranged from a high of 1.77 for performance over the most recent 48 months to a low of -0.12 over the latest 24 months, and is 0.33 for performance since inception. By contrast, the ASX 200 Total Return Index's Sortino for performance since March 2018 is 0.61.
Drawdown
Over the past 12 months, the fund's largest drawdown was -9.83% vs the index's -7.19%, and since inception in March 2018 the fund's largest drawdown was -29.57% vs the index's maximum drawdown over the same period of -26.75%.
Sortino Ratio
Drawdown%
Quintile Ranking vs. Average Equity Long - Large Cap - Australia as of March 2024
The Firetrail Australian High Conviction Fund is not ranked in the first or second quintile for any KPI.
Over the past 12 months, the fund has risen by +6.98% compared with the peer group which has returned an average of +13.29%, for a difference of -6.31%.
The fund's returns over the past 12 months have been achieved with a volatility of 11.36% vs the peer group's average volatility of 10.4%. The annualised volatility of the fund's returns since inception in March 2018 is 16.95% vs the peer group's 11.54%. Over all other periods, the fund's volatility relative to the peer group has been varied.