Australian Equities

Yarra Market Neutral Fund

The Yarra Market Neutral Fund offers access to an established absolute return strategy with a strong record of outperformance*.

An established and successful Absolute Return Fund

Established in August 2016, the Yarra Market Neutral Fund (previously the Karara Market Neutral Plus Fund#) aims to generate positive returns in all market environments. Using an active and flexible investment approach, the Fund seeks to add value through both long term and short term views, and its stringent quantitative screening process has generally lead to a higher hit rate through the life of the Fund.

Reasons to consider investing

A true to label Absolute Return Fund

Through a combination of investing and trading, the Fund employs a disciplined and research-focused investment approach and seeks to deliver uncorrelated, equity-like returns with lower targeted volatility and downside protection at the core.

The Fund employs a proven investment philosophy and maintains a flexible approach; it can partake in IPO’s, placements, M&A arbitrage and both long and short positions. This flexibility ensures we are able to move quickly to take advantage of price movements and long term trends.

A highly experienced team with an established track record

Led by Portfolio Manager Andrew Smith, the Fund has a strong and established track record identifying market inefficiencies to deliver strong outperformance*. The team is supported by a broader Australian equities team comprising 13 members with an average 13 years’ investment experience. We have an investment team of the highest quality; our diversity of experience brings varied perspectives to stock and portfolio construction discussions.

Non-consensus thinking and differentiated insights

Our process of undertaking rigorous proprietary research is an invaluable advantage when focusing across the listed market, particular in those parts of the market where we believe there is more hidden value to be captured. We undertake rigorous proprietary research to identify and test our differentiated insights, with analysis of Environmental, Social & Governance (ESG) risks an integral part of this process.

An acute focus on risk

We have a dedicated compliance team in place and place risk management at the core of what we do. We maintain a stringent focus on downside protection, taking larger positions in lower volatility stocks and smaller position sizes in higher volatility stocks. This fund is appropriate for investors with “High” and “Very High” risk and return profiles. A suitable investor for this fund is prepared to accept high risk in the pursuit of capital growth with a medium to long investment timeframe. Please refer to the PDS and TMD for further information.

Open to new investment for all Australian investors

The Fund is an Australian unit trust registered as a managed investment scheme under the Corporations Act 2001 (Cth) which is available to all Australian investors.

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Objective

To outperform the RBA Cash Rate (after fees) over rolling 5-year periods

Benchmark

RBA Cash Rate**

Typical number of positions

30 – 100 (combined Long and Short)

Recommended investment timeframe

Long term, at least 5 years

Inception date

August 2016#

Net returns as at 31 October 2022

1 Mth
%
3 Mth
%
1 Yr
%
2 Yrs
% p.a.
3 Yrs
% p.a.
5 Yrs
% p.a.
10 Yrs
% p.a.
Since
inception
% p.a.
Yarra Market Neutral Fund^# -1.21 0.33 -5.74 -1.68 6.35 7.99 NA 8.71
RBA Cash Rate** 0.22 0.57 0.76 0.43 0.43 0.82 NA 0.96
Excess Return^ -1.43 -0.24 -6.50 -2.11 5.92 7.17 NA 7.75

^ Total Fund net returns are post fees, pre tax using redemption prices and assume reinvestment of distributions. Excess return: The difference between the portfolio’s return and the benchmark return. Past performance is not a reliable indicator of future performance. Inception date is 1 August 2016.
# Effective 31 May 2022, Yarra Funds Management Limited was appointed Investment Manager of the Fund. As part of this process, Portfolio Manager Andrew Smith became an employee of Yarra Capital Management, and the name of the Fund was changed from the Karara Market Neutral Plus Fund to the Yarra Market Neutral Fund. Performance prior to 31 May 2022 relates to the Karara Market Neutral Plus Fund.
From June 2019, performance figures are those of the Karara Market Neutral PLUS Fund’s series 1 units (net of all fees and assumes reinvestment of distributions). Between August 2016 and May 2019, performance is calculated using the actual exit to exit prices of series 1 units of the Ironbark Karara Market Neutral Fund (IKMNF) adjusted for the portfolio construction differences between the two funds as the Karara Market Neutral PLUS Fund security positions are double the size of the security positions held by the previous IKMNF. The effect of management fees of 1.50% p.a., expense recovery of 0.20% p.a. and performance fees of 20% p.a. form part of this calculation. Performance fees include a hurdle rate. Fees are stated inclusive of GST net of RITCs.
** The Fund has minor equity market exposure, with a low volatility target, making an equity index benchmark unsuitable. The Fund profits from stock positioning rather than from equity market moves. The underlying assets of the fund are of a higher risk profile then cash assets.

Investment Insights

Latest investment commentary – October 2022

Fund Facts

Open To New Investors: Yes
ARSN: 659 614 856
APIR: PER2486AU
Initial Minimum: 10,000.00AUD
Distribution Frequency: Semi-annually
Management cost (ICR) (p.a.): 1.35%
Performance hurdle: RBA Cash Rate +2%
Performance Fee: 20% of the gross performance above the benchmark
Buy/sell spread: +/-0.25%
Fund ratings: Contact a member of the Firm’s Client Team to discuss ratings in further detail.

Invest Now

Product Disclosure Statement and Application for Investment Form (for initial investments)
Product Disclosure Statement and Additional Investment Form (for additional investments)
Target Market Determination

Institutional investors wanting further information on the Yarra Australian Equities Strategy should contact a member of the Firm’s Client Team.

Further Information

Important Additional Information
Important Updates (none at this time)

* Past performance is not indicative of future performance.

General Advice Disclaimer

This webpage has been prepared by Yarra Capital Management Limited (ABN 99 003 376 252). Either Yarra Funds Management Limited (ABN 63 005 885 567, AFSL 230 251) (‘YFML’) or Yarra Investment Management Limited (ABN 34 002 542 038, AFSL 229664) (‘YIML’) is the issuer and responsible entity of the range of registered managed investment schemes described on this website (‘Funds’). Perpetual Trust Services Limited (ABN 48 000 142 049 AFSL No. 236 648) is the Responsible Entity of and issuer of units in the Yarra Market Neutral Fund (Fund). YFML and YIML are not licensed to provide personal financial product advice to retail clients. The information provided on this website contains general financial product advice only. The advice has been prepared without taking into account your personal objectives, financial situation or particular needs. Therefore, before acting on any advice, you should consider the appropriateness of the advice in light of your own or your client’s objectives, financial situation or needs. Prior to investing in any of the Funds, you should obtain and consider the product disclosure statement (‘PDS’) and target market determination (‘TMD’) for the relevant Fund by contacting our Investor Services team on 1800 034 494 or from our website at www.yarracm.com/pdsupdates. The information set out in this website has been prepared in good faith and while YFML, YIML and its related bodies corporate (together, the “Yarra Capital Management Group”) reasonably believe the information and opinions to be current, accurate, or reasonably held at the time of publication, to the maximum extent permitted by law, the Yarra Capital Management Group: (a) makes no warranty as to the content’s accuracy or reliability; and (b) accepts no liability for any direct or indirect loss or damage arising from any errors, omissions, or information that is not up to date. Past performance is not indicative of future performance.

Before using any of the financial services offered by Yarra Funds Management Limited, you should read our our Financial Services Guide (FSG). This has been prepared to assist you in deciding to use any of the financial services offered by us. We are required to provide you with an FSG if we provide certain financial services to you as a retail client.