Key Facts

Index Used: ASX 200 Total Return Discretionary/Quantitative: Discretionary
Peer Group: Equity Alternative - Australia FUM (millions): AU$ 203m
Investment Style: Blend Fund Inception Date: March 2018
Geographic Mandate: Australia/Global Latest Return Date: March 2024
Investor Type: Wholesale & Retail Status: Open
Minimum Investment: AU$ 20,000 Investment Frequency: Daily

Manager Details

Firetrail is an investment management boutique founded in 2018. The firm was established with a goal to align our people with our clients. Importantly, the firm is majority owned by our investment staff and the team is invested alongside our clients in the investment strategies.

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.
Firetrail is an investment management boutique founded in 2018. The firm was established with a goal to align our people with our clients. Importantly, the firm is majority owned by our investment staff and the team is invested alongside our clients in the investment strategies.

Pinnacle Investment Management Limited are partners and minority shareholders in the business.

Strategy Description

The Fund aims to provide investors with access to an actively managed equities portfolio predominately comprised of long positions and short positions in Australian listed securities and constructed using the Fund's net market neutral Investment Strategy.

Net exposure will typically be between -5% to +5% of the Fund's NAV (with a maximum of -30% to +30% of the Portfolio's NAV). The Fund's strategy provides investors with the opportunity to gain exposure to mispriced securities identified by Firetrail using fundamental, bottom-up research. The Fund will typically invest in 30 to 40 fundamentally driven long positions and approximately 100 short positions (20 to 30 fundamentally driven short positions and 70 to 80 risk positions).

The Fund is typically expected to be net market neutral. Firetrail will aim to achieve net market neutrality by ensuring that the Fund's exposure to long positions (securities held physically or via a derivative) is approximately equal to the Fund's exposure to short positions (a negative amount of securities held physically or via a derivative).

The Fund is permitted to invest in listed securities, pre-IPO securities, derivatives, cash and cash equivalent investments. Notwithstanding this broad mandate, the Fund is expected to be predominantly comprised of long positions and short positions in Australian listed securities with limited exposure to international listed securities and pre-IPO securities.

Firetrail Investments may use derivatives to hedge the overall exposure of the portfolio or leverage its exposure to particular investments. The Fund may use both exchange-traded and over-the-counter derivatives including options, futures, forwards, swaps, participatory notes and contracts for difference.
The Fund aims to provide investors with access to an actively managed equities portfolio predominately comprised of long positions and short positions in Australian listed securities and constructed using the Fund's net market neutral Investment Strategy.

Fund Fees

Management Fee: 1.5% Performance Fee: 20%
Buy Spread: 0.35% Sell spread: 0.35%
High Water Mark: Yes Hurdle: RBA Cash Rate

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

LonsecHighly Recommended (1 Sep 2021) ZenithHighly Recommended (1 Feb 2021)

Platform Availability

BT Wrap, HUB24, Macquarie Wrap, Netwealth, Asgard, IOOF, MLC Wrap, AMP MyNorth, BT Panorama, MLC Navigator, uXchange, Linear, Mason Stevens

Performance Review

The Firetrail Absolute Return 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 -1.42% compared with the benchmark's return of 8.8% over the same period.

The Manager has delivered these returns with 4.12% less 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 -0.2 since inception. The fund has provided positive monthly returns 45% of the time in rising markets and 46% of the time during periods of market decline, contributing to an up-capture ratio since inception of -4% and a down-capture ratio of -13%.

The Firetrail Absolute Return Fund rose by +4.58% in March, an outperformance of +1.31% 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 +4.58% compared with the benchmark's best return of +7.26%, and its worst monthly return was -4.95% vs the benchmark's worst return over the same period of -3.78%.

YearJan %Feb %Mar %Apr %May %Jun %Jul %Aug %Sep %Oct %Nov %Dec %YTD %
2024-4.95-1.334.58NANANANANANANANANA-1.92
2023-3.941.321.17-0.973.920.731.660.49-0.79-0.73-2.900.470.19
2022-0.120.11-4.40-1.39-0.63-3.59-5.13-2.011.16-2.360.852.44-14.33
20213.015.43-0.020.86-0.79-6.48-2.693.461.673.18-1.30-2.033.77
2020-2.40-0.47-6.8912.644.23-2.385.781.424.28-1.961.893.1419.48
20191.56-1.11-0.020.76-5.03-1.583.083.45-1.05-0.480.484.944.72
2018NANA-0.63-0.12-6.36-3.290.87-5.103.66-1.48-1.42-3.15-16.11

Annual Returns

Over the past 12 months, the fund has returned -0.2% compared with the benchmark which has returned +14.45%, for a difference of -14.65%. Since inception in March 2018, the fund has returned -1.42% per annum, a difference of -10.22% 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 $91. 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 8.77% vs the index's 10.87%. The annualised volatility of the fund's returns since inception in March 2018 is 11.37% vs the index's 15.49%. Over all other periods, the fund's returns have been consistently less volatile than the benchmark.

Sharpe Ratio

The fund's Sharpe ratio has ranged from a high of 0.23 for performance over the most recent 48 months to a low of -1.06 over the latest 24 months, and is -0.2 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 45% of the time, contributing to an up-capture ratio for returns since inception of -4.4%. Over all other periods, the fund's up-capture ratio has ranged from a high of 1.92% over the most recent 48 months to a low of -23.55% 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 46% of the time, contributing to a down-capture ratio for returns since inception of -12.82%. Over all other periods, the fund's down-capture ratio has ranged from a high of -10.88% over the most recent 24 months to a low of -29.85% over the latest 12 months. A negative down-capture ratio indicates that, on average, the fund delivered positive returns in the months the market fell.

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 0.28 for performance over the most recent 48 months to a low of -1.23 over the latest 24 months, and is -0.36 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 -9.89% vs the index's -7.19%, and since inception in March 2018 the fund's largest drawdown was -23.73% vs the index's maximum drawdown over the same period of -26.75%.

Sortino Ratio

 

Drawdown%

 
Fund Index Peer group

Quintile Ranking vs. Average Equity Alternative - Australia as of March 2024

The performance of the Firetrail Absolute Return Fund ranked it in the first quintile for Volatility and Downside Deviation and second quintile for Largest Drawdown over 5 years, while over 1 & 3 years the fund ranked in the second quintile for Volatility.

Over the past 12 months, the fund has returned -0.2% compared with the peer group which has returned an average of +10.44%, for a difference of -10.64%.

The fund's returns over the past 12 months have been achieved with a volatility of 8.77% vs the peer group's average volatility of 7.06%. The annualised volatility of the fund's returns since inception in March 2018 is 11.37% vs the peer group's 8.99%. Over all other periods, the fund's returns have been more volatile than the peer group.

1 Year
3 Year
5 Year
7 Year
Firetrail Absolute Return Fund
ASX200 Total Return
Quintile Rankings display Key Performance Indicators (KPI's) against the fund's Peer Group. Each green square ranks the fund in one quintile (or 20%) of its peer group - five green squares indicate the fund is in the best quintile for each KPI. The performance of the peer group's underlying index is shown by a red dot.