How our strategy works

Kardinia Capital is a boutique asset manager investing in Australian equities via a lower volatility, long/short strategy.

We aim to build a portfolio of high quality companies with predictable, sustainable earnings and a demonstrable track record in earning those cashflows through different market cycles. When overlaid with our disciplined risk measures, this creates a powerful combination to reduce exposure to market volatility and grow wealth over the long term.

This robust risk management framework is an important part of our strategy and includes market exposure limits and single stock limits. Our fund also has a disciplined stop loss policy and in times of extreme volatility, this has saved our investors significant losses.

The variable beta nature of the strategy is also key to its success. We have the ability to move our net market exposure significantly up to a maximum of 150% net long, with the ability to go net short. This allows us to move quickly in times of market volatility – capitalising on a strengthening market by increasing net exposure or reducing that exposure to minimise volatility and protect capital in weaker and negative markets.

A long/short strategy takes long positions in securities that are expected to increase in value and short positions in securities that are expected to decrease in value, with an overall goal of increasing returns and minimising volatility. These strategies aim to generate positive returns month in, month out – regardless of how an index is performing – to capture the power of compounding over the long term.