The Harbour Long Short Fund has retained its “4 IP” rating by Research IP, with a score of 3.83/5.
The Harbour Long Short Fund is an actively managed, high conviction portfolio investing principally in ‘long’ and ‘short’ listed Australasian equities. The focus is on delivering positive returns through the market cycle by investing in long and short-sold equity positions with no particular attention to an equity benchmark. The Fund is expected to have lower volatility than equity benchmarks. Given the unique features of this Fund, it may not be appropriate for all investors.
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Qualitative Research Report and Data Tear Sheet
Research IP says
“Selling of stocks in the portfolio is a direct result of Harbour’s proprietary scoring and stock ranking system. As a company falls from green, to amber to red sections of the stock scores the size of the position is reduced until it hits the lowest scoring or red section of the stock list. This is not a mandatory signal to sell, but portfolio holdings in the red section are typically turnaround stories where the Manager believes the company and its current pricing will improve, and the manager has sufficient conviction to invest early.“
“Importantly Research IP highlights all shorts are fully covered by cash. This approach can inflate the cash holding of the Fund, and therefore appear that the Manager is not deploying capital. Research IP considers fully covering all short positions with cash as a mandatory requirement for long-short funds in general.“
“Research IP notes short selling has the ability to enhance fund performance, but also has the potential to produce uncapped losses. Therefore, manager skill is extremely important. This is also an investment strategy that is not readily replicable by a retail investor or financial adviser.“
“Research IP commends the Manager for reassessing the fee schedule for the Fund in 2020. The base fee was reduced from 1.25% to 0.81%. Research IP still believe the hurdle rate for the calculation of performance fees is lower than it could be.”
Research IP, 1 December 2022
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Disclaimer, Disclosures and Warnings
Research IP strongly recommends this document and report be read in conjunction with the relevant Product Disclosure Statement. Research IP gives no warranty of accuracy or completeness of information in this document. Any information, opinions, views or recommendations are general information only and do not take into consideration any person’s particular financial situation or goals and therefore does not constitute financial advice. This document should not be relied upon as a substitute for financial advice from your financial adviser.
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