Benefits of investing in the Perpetual Pure Equity Alpha Fund

Perpetual Pure Series Funds are a suite of premium investment funds managed by Perpetual.

Each Fund provides:

• access to Perpetual research and investment expertise

• access to investment opportunities and diversity that individual investors may not achieve on their own

• distributions (if payable), which may carry franking credits.

Risk level

Very High

About the Fund

The Perpetual Pure Equity Alpha Fund is an absolute return portfolio of the best share opportunities we have identified (both long and short), and is managed by one of Australia's most experienced equity teams.

The Fund aims to generate positive returns with minimal volatility over equity market cycles. By combining both long (to hold) and short (to sell) positions the Fund is able to take advantage of rising and falling markets and provide some protection against falling markets. 

We employ our tried and proven bottom-up stock selection process for both long and short positions. Through fundamental company research, we aim to identify opportunities to buy quality, undervalued companies. On the short side of the portfolio we opportunistically target stocks that we expect will underperform. We rarely short the index, we short companies.

Whilst the Fund has no formal benchmark, for reporting purposes the Fund is measured against the RBA cash rate.

Investment Approach

Utilising Perpetual's proven investment process, the Fund will adopt the same disciplined investment approach as is used across Perpetual's equity funds. Our conservative bottom-up approach to stock picking is core to the investment approach for this Fund, allowing the portfolio manager to identify and select stocks for both the long and short positions of the Fund.

How we invest your money

The investment process is based on comprehensive internal company research using four filters: 

1. sound management 
2. conservative debt levels 
3. quality of business and 
4. recurring earnings. 

The Fund's portfolio is then created within specific investment guidelines and a risk-controlled framework. The Fund will predominantly invest in Australian shares (both long and short), cash may be used defensively to preserve capital and it can invest opportunistically (both long and short) in global shares. 

Derivatives may be used in managing the Fund.

Investment guidelines

• Gross share exposure: 0 to 220%

• Net share exposure*: -20% to 100%

• Net global share exposure*#: -10% to 20%

• Cash: 0 to 120%

*The net market exposure is the value of shares, adjusted for the value of short positions in shares.

#Net global share exposure is a sub component of the net share exposure.