I was musing on my last post overnight and trying to reconcile...

I was musing on my last post overnight and trying to reconcile my assumption that the fund had a limit of 30% global stocks. My assumption up to now was that the fund was invested in a basically 70% Aus / 30% global split. Upon reading this presentation and going back to the offer document I now see that my assumption was incorrect, and here's why:
(1) the fund can invest up to 30% global on a gross basis. There is no mention that I could find of net limits.
(2) I can't see any limit on short selling by geography.

The fund is currently invested 21% net in Australia and 34% net globally. Drilling into the presentation breaks that down as follows:
Australia: 90% long / 69% short = 21% net long
Nth America: 23% long / 10% short = 13% net long
Europe: 13% long / 0% short = 13% net long
Asia: 11% long / 3% short = 8% net long

Total gross positions are 73% Australia, 27% global. The short positions change this substantially, as can be seen above.

What has surprised me in this is the amount of short positions in Australian stocks. On about $1bn market cap you can do the maths for yourselves. $690m in short positions!

I don't have any particular conclusion to this post other than to note with some surprise that the NAV of the fund is (recently) remarkably correlated to the ASX200 considering the stocks held within the fund! If there were to be a severe sell-off of high p/e stocks and a rotation into "value" or low p/e stocks one can only assume that LSF would perform comparatively better. This positioning is consistent with their presentation of October 2018 which hints at an overvaluation of high p/e growth stocks.