Meme Australian Share Fund – September Factsheet And Performance Review

10th September 2016, Meme Capital

PERFORMANCE:

The Fund recorded a strong result in September, returning +3.68% compared to the market’s +0.40%, with our rolling three-month return remaining robust at +6.96% compared to the market’s +5.30%. This result was largely drawn from the solid performance of the Materials sector which was by far the most impressive of all the market sectors, returning +5.6% for the month compared with the next highest returning sector of Consumer Staples which provided just +1.7% for the month. Materials continues to be the portfolio’s largest sector exposure, accounting for 26.8% of the fund assets. By month end the total number of portfolio stocks was steady at 99 separate holdings and portfolio cash sits at about 7.0% after continued strong inflows.

INVESTMENT OBJECTIVE:

To outperform the S&P/ASX All Ordinaries Accumulation Index over rolling three year periods, through active investment in ASX listed securities outside the S&P/ASX 20.

INVESTMENT APPROACH:

The Fund takes an evidence-based quantitative approach to investing and uses a robust and back-tested trend-following strategy to identify investment opportunities expected to provide both positive price appreciation and relative price outperformance over the medium to long term. The Fund rigorously applies a set of capital management rules to manage both risk and return such that any losses are taken while they are small while gains are given room to compound until their long term price trends become exhausted or their relative out-performance becomes impaired.

The Fund employs a non-thematic, bottom-up investment style which allows us to quantify both the absolute and relative merits of each investment opportunity and to allocate the Fund’s investment capital accordingly. The resulting exposures to the various market sectors are essentially a consequence of that process, such that the strategy at the individual investment level guides the Fund’s sector exposure and not the other way around.

The Fund only takes long positions and does not use derivatives. The Fund will hold an allocation to cash to the extent that there are at any time insufficient investment opportunities at appropriate levels of risk.

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