Sage Capital reaches three-year track record with market leading results

Media Release: Australian equities long short manager Sage Capital reaches three-year track record with market leading results

Sage Capital’s highly successful two long short strategies have reached their three-year track record, with its market neutral strategy achieving top quartile status globally* since inception. As a result, Sage Capital has been able to build a broad and diversified base of both domestic and high-profile international clients across institutional, not-for-profit and charities, endowment, family office, private bank, retail and wholesale sectors via its partner, Channel Capital.

The Sage Capital strategies intentionally provide investors with two style neutral portfolio solutions. Firstly, an alternatives solution (CC Sage Capital Absolute Return Fund), and secondly, an Australian equity solution (CC Sage Capital Equity Plus Fund), both of which rely on the same investment process built over 20 years by Chief Investment Officer, Sean Fenton, through his successful career as a long short investor.  

As a market neutral long short strategy, the CC Sage Capital Absolute Return Fund is specifically designed as an alternative’s allocation, providing exposure to Sage Capital’s stock selection and risk management framework, whilst eliminating overall exposure to the underlying equity market. For the three years to 31 August 2022, the CC Sage Capital Absolute Return Fund returned +11.51% pa^ net of fees, outperforming its benchmark (RBA Cash Rate) by +11.21% pa. This has been achieved with no correlation to the S&P/ASX200 Accumulation Index and with less than half of the volatility, thus providing investors with clear portfolio diversification benefits. The fund has achieved ‘top quartile’ status within the global market neutral universe since inception on 20 August 2019 to 30 June 2022 (according to eVestment*).

As an active extension long short strategy, the CC Sage Capital Equity Plus Fund is specifically designed as an Australian equities allocation targeting a constant beta of one and benchmarked to the S&P/ASX200 Accumulation Index. For the three years to 31 August 2022, the CC Sage Capital Equity Plus Fund returned +12.14% pa^ net of fees versus the S&P/ASX200 Accumulation Index return of +5.51% pa, an outperformance of +6.63% pa^ net of fees.

Managing Director and Chief Investment Officer, Sean Fenton said:

“At a time when asset correlation is being significantly questioned amid market falls, liquid alternatives such as market neutral can help diffuse market risk and provide a source of uncorrelated returns to other assets. These strategies offer potential alpha opportunity for many long-only investors seeking to diversify away from traditional equity and fixed income allocations. These factors as well as the ongoing search for yield and stable return streams are driving investor appetite."

Considering the increase in market volatility over the past year, the funds have performed well − achieved by applying our broad and style neutral investment process. We categorise the market into eight proprietary Sage groups and focus on selecting stocks within them, to give us the flexibility to incorporate rapidly shifting company information into the portfolio without taking large binary style positions. Performance has been driven by strong stock selection within these Sage groups which include Defensives, Domestic Cyclicals, Global Cyclicals, Gold, Growth, REITs, Resources and Yield,” Mr Fenton said.

*Source: eVestment©. Relative value − Market Equity Neutral Universe. End-of-month risk and return characteristics from August 2019 to June 2022.

^Past performance is not indicative of future performance.

This information is provided by the Investment Manager, Sage Capital Pty Ltd ACN 632 839 877 AR No. 1276472 (‘Sage Capital’). Channel Investment Management Limited ACN 163 234 240 AFSL 439007 (‘CIML’) is the Responsible Entity and issuer of units in the CC Sage Capital Equity Plus Fund ARSN 634 148 913 and the CC Sage Capital Absolute Return Fund ARSN 634 149 287 (together ‘the Funds’). To the extent that this information is considered advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling units in the Funds please note that it does not take into account your particular investment objectives, financial situation or needs. Past performance is not indicative of future performance. All investments carry risk and all investment decisions of an individual remain the responsibility of that individual.  Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. For further information and before investing, please read the Product Disclosure Statement and Target Market Determination available from  www.sagecap.com.au and www.channelcapital.com.au.