Boutique investment firm Ten Cap Investment Management will launch its first active exchange-traded fund (ETF) later this month, bringing the strategy of its long-short equity-only fund to the retail investor market.
The Ten Cap Alpha Plus Complex ETF will list on the Australian Securities Exchange on 24 November with the code TCAP and be based on the firm’s Alpha Plus Fund, which is managed by Ten Cap co-founder and lead portfolio manager Jun Bei Liu and currently only available to institutional and advised investors.
That fund has returned 12.45 per cent a year since inception and outperformed the ASX 200 index by 2.87 per cent, and currently has funds under management of more than $1.5 billion.
The new listed fund will aim to provide ‘equity-like’ returns, but with less volatility as a result of its ability to hold long and short positions across a core exposure based on the ASX 200 Index, as well as optional holdings of up to 10 per cent of small and mid-cap stocks outside the benchmark.
“The strategy’s defining feature is its ability to perform in both rising and falling markets. Gains can be generated from declining stock prices via short positions, making the fund’s performance less dependent on the overall direction of the market,” Liu said.
Ten Cap co-founder and chief executive Jason Todd said the release of the ETF was the next step for the fledgling firm.
“This ETF represents a number of firsts for Ten Cap following the launch of the business earlier this year. We wanted to offer an institutional-grade product to a new set of investors and believe that ETFs are a great vehicle in which to do so and the right step for the growth of Ten Cap as a business,” Todd added.
“The TCAP ETF is best suited for those who seek exposure to a unique and complex strategy that cannot be replicated via passive options.”
