Alpha Generating strategies
Coolabah Capital Investments (CCI) offers a rich range of active credit alpha solutions under the Smarter Money Investments (SMI), BetaShares and CCI umbrellas. All utilise our unique intellectual edge furnished by one of the largest teams in investment-grade fixed-income, including 12 portfolio managers and traders and 12 analysts.
The Strategies
Coolabah has a wide range of actively managed fixed income strategies for retail, wholesale and institutional investors.
Publicly available strategies are through Coolabah’s wholly owned subsidiary Coolabah Capital Investments (Retail), previously known as retail fund manager, Smarter Money Investments (SMI). These include:
- the Smarter Money Fund (SMF), which targets liquid, zero-duration returns of 1.0% to 2.0% p.a. above the RBA cash rate after all fees with an average A credit rating (with no leverage);
- the Coolabah Short Term Income Fund, which targets liquid, zero-duration returns of 1.5% to 3.0% p.a. above the RBA cash rate after all fees with an average A credit rating (with no leverage);
- the Coolabah Floating-Rate High Yield Fund (Managed Fund) (YLD) , which provides to exposure to a portfolio of investment-grade Australian floating-rate notes with enhanced yields;
- the Smarter Money Long Short Credit Fund (LSCF), which targets liquid, zero-duration returns of 4.0% to 6.0% p.a. above the RBA cash rate after all fees with an average A credit rating;
- the Coolabah Long-Short Opportunities Fund (LSOP), which targets liquid, zero-duration returns of 8.0% p.a. above the RBA cash rate after all fees with an average A credit rating;
- the Coolabah Active Composite Bond Fund (Hedge Fund) (FIXD), which targets liquid, long-duration returns of 1.0% to 2.0% p.a. above AusBond Composite 0+Yr Index after all fees with an average A credit rating; and
- multiple foreign currency strategies, including two US Dollar and NZ Dollar Higher Income and Long-Short Credit strategies.
These strategies are available to institutional investors in a customisable mandate or fund format to suit any risk and return profile.
Public Strategies
SMARTER MONEY FUND
The Smarter Money Fund (SMF) harnesses CCI’s management team of 38 executives to actively exploit mispricings in cash and bond markets to generate daily liquidity returns that exceed a target of the RBA cash rate plus 1.0% to 2.0% pa after all fees with an average A credit rating and near-zero interest rate duration risk.
The SMF is a daily liquidity solution that invests in cash and investment-grade fixed-income assets that are hedged to a floating-rate (ie, not fixed-rate) exposure that means it has near-zero interest rate (duration) risk.
SMF cannot invest in hybrids or use leverage. It is typically placed in the “short duration fixed-interest” (credit) or “cash-enhanced” universes.
SMF is listed on numerous investment platforms. It is also rated by many researchers, including Mercer, Lonsec, Atchison and Foresight Analytics. The strategy has daily redemption rights.
COOLABAH SHORT TERM INCOME FUND
The Coolabah Short Term Income Fund harnesses CCI’s management team of 38 executives to actively exploit mispricings in cash and bond markets to generate daily liquidity returns that exceed a target of the RBA cash rate plus 1.5% to 3.0% pa after all fees with an average A credit rating and near-zero interest rate duration risk.
The Fund is a daily liquidity solution that invests in cash and fixed-income assets that are hedged to a floating-rate (ie, not fixed-rate) exposure that means it has near-zero interest rate (duration) risk.
It cannot use leverage. It is typically placed in the “short duration fixed-interest” (credit) or “cash-enhanced” universes.
It’s listed on numerous investment platforms. It is also rated by many researchers, including Foresight Analytics. Lonsec, Mercer and Zenith. The strategy has daily redemption rights.
COOLABAH FLOATING-RATE HIGH YIELD FUND (MANAGED FUND)
The Coolabah Floating-Rate High Yield Fund (Managed Fund) focuses on generating higher income than other traditional fixed income investments by investing in a portfolio of investment-grade Australian Floating-Rate Notes (FRNs) with enhanced yields.
It invests in a portfolio of cash securities and floating-rate, Australian bank-issued senior and Tier 2 bonds with an average rating of “A-”. It has the capacity to invest in government bonds and corporate bonds.
SMARTER MONEY LONG-SHORT CREDIT FUND
The Smarter Money Long-Short Credit Fund (LSCF) harnesses CCI’s management team of 38 executives to actively exploit mispricings in global cash and bond markets to generate daily liquidity returns that exceed a target of the RBA cash rate plus 4% to 6% pa after all fees with an average A credit rating and near-zero interest rate duration risk.
LSCF is a daily liquidity solution that invests in cash and fixed-income assets that are hedged to a floating-rate (ie, not fixed-rate) exposure that means it has near-zero interest rate (duration) risk.
LSCF is typically placed in the “unconstrained fixed-income”, “high yield”, or “defensive alternative” universes.
LSCF is listed on numerous investment platforms. It is also rated by many researchers, including Lonsec, Atchison and Foresight Analytics. The strategy has daily redemption rights.
COOLABAH LONG-SHORT OPPORTUNITIES FUND
The Coolabah Long-Short Opportunities Fund (LSOP) harnesses CCI’s management team of 38 executives to actively exploit mispricings in global cash, bond and bank equity markets to generate daily liquidity returns that exceed a target of the RBA cash rate plus 8% pa after all fees with an average A credit rating and near-zero interest rate duration risk.
LSOP is a daily liquidity solution that invests in cash, fixed-income securities and listed equity providing investors with exposure to the full capital structure of Australian and overseas banking groups. All fixed-rate assets are hedged to a floating-rate (ie, not fixed-rate) exposure that means it has near-zero interest rate (duration) risk.
COOLABAH ACTIVE COMPOSITE BOND FUND (HEDGE FUND)
The Coolabah Active Composite Bond Fund (Hedge Fund) is our market-leading, daily liquidity, long duration, active composite bond strategy. This was previously an institutional strategy for super funds that was not available to the public, which we are now excited to bring to you as an exchange quoted managed fund on Cboe Australia under the ticker FIXD. The Fund can also be accessed by applying directly with the Fund Administrator, Apex Fund Services, under the APIR Code ETL2716AU.
The Coolabah Active Composite Bond Fund (Hedge Fund) seeks to deliver superior risk-adjusted returns to the Bloomberg AusBond Composite Bond Index through harnessing Coolabah’s active credit alpha style that focusses on systematically exploiting mispricings to generate capital gains in addition to yield.
Foreign Currency Strategies
USD Strategies
CCI offers Australian based investors with US dollars access to the Australian fixed income market through a Smarter Money and Long-Short Strategy. These solutions target returns between 1.5% to 3%, and 4% to 6% above the US Federal Funds Target Range.
New Zealand PIE strategies
CCI offers New Zealand based investors access to the Australian and global fixed income market through a Short Term Income and Long-Short Strategy. These solutions target returns between 1.5% and 3%, and 4% and 6% above the RBNZ cash rate.
Both strategies are portfolio investment entities (PIE). This is a New Zealand managed fund that offers investors special tax rules that apply to the income earned by the Fund. The PIE rules mean that investors pay tax on their own tax rate (the Prescribed Investor Rate or PIR), which is usually slightly lower than their income tax rate. Refer to the Product Disclosure Statement for more information.
Institutional Strategies
Coolabah Capital Institutional Investments (CCII) manages a wide range of customised, active credit alpha strategies exclusively for wholesale and institutional investors in mandate or fund format.
CUSTOM INSTITUTIONAL MANDATES
CCI specialises in building bespoke direct portfolios of investment grade and/or sub-investment grade credit alpha strategies with risk and return preferences tailored to client needs, including long and long-short strategies that are unlevered or levered.
BETASHARES ACTIVE AUSTRALIAN HYBRIDS FUND
HBRD is the first “active” fixed-income ETF in Australia that provides access to a diversified portfolio of cash, bonds and hybrid securities. HBRD aims to outperform the RBA cash rate plus 2.5% pa, which it has done since inception, while seeking to reduce the volatility and downside risk that may otherwise be experienced by direct holders of hybrids.
Fund Comparison
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Long Only Strategies
| Smarter Money Strategy | Short Term Income Strategy | Betashares HBRD ETF | |
|---|---|---|---|
| Strategy | Smarter Money Income | Short-Term Income | Hybrid Securities |
| Domicile | Australia | Australia | Australia |
| Currency | AUD | AUD | AUD |
| APIR Code | CRE0014AU | SLT0052AU | ASX: HBRD |
| Investment Objective | RBA + 1%-2% p.a. after fees | RBA + 1.5%-3% p.a. after fees | RBA + 2.5% p.a. after fees |
| Target Volatility | < 1% p.a. | < 2% p.a. | 3%-4% p.a. |
| Inception Date | 17-Feb-2012 | 8-Oct-2014 | 13-Nov-2017 |
| Responsible Entity | Equity Trustees | Equity Trustees | BetaShares Capital |
| Registry | Apex Fund Services | Apex Fund Services | Link Market Services |
| Custodian | Citigroup | Citigroup | RBC Investor Services |
| Applications | Daily | Daily | Daily |
| Withdrawals | Daily (T+3) | Daily (T+3) | Daily (T+2) |
| Distributions | Quarterly | Quarterly | Monthly |
| Minimum Investment | $1,000 | $1,000 | None |
| Additional Investment | $1,000 | $1,000 | None |
| Savings Plan | Monthly | Monthly | N/A |
| Savings Plan Minimum | $100 | $100 | N/A |
| Buy/Sell Spread* | 0.00%/0.025% | 0.00%/0.025% | On Market |
| Gearing | No | No | No |
| Shorting | No | No | No |
Geared & Alternative Strategies
| Floating-Rate High Yield Strategy | Long-Short Credit Strategy | Long-Short Opportunities Strategy | Coolabah Active Composite Bond Fund (Hedge Fund) | |
|---|---|---|---|---|
| Strategy | High Yield | Unconstrained Fixed Income | Unconstrained Fixed Income | Composite Bond |
| Domicile | Australia | Australia | Australia | Australia |
| Currency | AUD | AUD | AUD | AUD |
| APIR Code | ETL5010AU | SLT2562AU | ETL9059AU | CXA: FIXD |
| Investment Objective | A portfolio of floating-rate notes with enhanced yields | RBA + 4%-6% p.a. after fees | RBA + 8% p.a. after fees | AusBond Composite 0+Yr Index + 1%-2% p.a. after fees |
| Target Volatility | None | < 5% p.a. | < All Ords Index | None |
| Inception Date | 5-Dec-2022 | 31-Aug-2017 | 1-May-2020 | 7-Mar-2017 |
| Responsible Entity | Equity Trustees | Equity Trustees | Equity Trustees | Equity Trustees |
| Registry | Apex Fund Services | Apex Fund Services | Apex Fund Services | Apex Fund Services |
| Custodian | Citigroup | Citigroup | Citigroup | Citigroup |
| Applications | Daily | Daily | Daily | Daily |
| Withdrawals | Daily (T+3) | Daily (T+3) | Daily (T+3) | Daily (T+2) |
| Distributions | Quarterly | Quarterly | Quarterly | Quarterly |
| Minimum Investment | $1,000 | $1,000 | $1,000 | None |
| Additional Investment | $1,000 | $1,000 | $1,000 | None |
| Savings Plan | Monthly | Monthly | N/A | N/A |
| Savings Plan Minimum | $100 | $100 | N/A | N/A |
| Buy/Sell Spread* | 0.00%/0.05% | 0.00%/0.05% | 0.00%/0.05% | On Market |
| Gearing | Yes | Yes | Yes | Yes |
| Shorting | No | Yes | Yes | Yes |
Foreign Currency Strategies
| USD Short Term Income Strategy | USD Long-Short Credit Strategy | |
|---|---|---|
| Strategy | Short-Term Income | Unconstrained Fixed Income |
| Domicile | Australia | Australia |
| Currency | USD | USD |
| Investment Objective | US Fed Fund Target Range + 1.5%-3% p.a. after fees | US Fed Fund Target Range + 4%-6% p.a. after fees |
| Target Volatility | < 2% p.a. | < 5% p.a. |
| Inception Date | 8-Oct-2014 | 31-Aug-2017 |
| Responsible Entity | Equity Trustees | Equity Trustees |
| Registry | Apex Fund Services | Apex Fund Services |
| Custodian | Citigroup | Citigroup |
| Applications | Daily | Daily |
| Withdrawals | Daily (T+5) | Daily (T+5) |
| Distributions | Quarterly | Quarterly |
| Minimum Investment | $1,000 USD | $1,000 USD |
| Additional Investment | $1,000 USD | $1,000 USD |
| Buy/Sell Spread* | 0.00%/0.025% | 0.00%/0.05% |
| Gearing | No | Yes |
| Shorting | No | Yes |
*The Buy Sell Spread may change depending on the transaction costs associated with buying and selling the assets within the Fund’s portfolio at that time. Any changes to the spreads after the date of the PDS will be published on the Funds’ individual page.
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