L1 Long Short Fund (LSF) Q4 2024 TU earnings summary

Executive summary

• L1 Long Short Fund (LSF) returned 0.7% for the June quarter, outperforming the ASX200AI (-1.1%). Calendar YTD return is 8.2% vs ASX200AI 4.2%. Three-year annualized return is 11.9% vs 6.4% for the index.

• Global markets were mixed; US gains driven by mega-cap tech, while Australia and Europe were subdued. Portfolio gains in April/May were offset by a June decline due to weaker European markets and commodity prices.

Financial highlights

• 1-year net return: 12.4% (ASX200AI 12.1%). 2-year p.a.: 13.0% (index 13.4%). 5-year p.a.: 18.7% (index 7.3%). Since inception p.a.: 11.6% (index 8.7%).

• Net tangible asset (NTA) before tax: $3.21; after tax: $3.08. Market cap: $1.98b as of June 30, 2024.

• 83 total positions: 60 long, 23 short, 26 international. Gross long exposure: 173%, gross short: 91%, net exposure: 82%.

Outlook and guidance

• Equity markets seen as fully priced with narrow leadership in Australia and US. Risks include weakening consumer sentiment, geopolitical tensions, and US elections.

• Portfolio focused on low P/E, cash-generative companies and select short opportunities in overvalued growth stocks.

• Australian inflation remains above RBA target, with rates likely to stay high; US expected to cut rates later in 2024.