Our Systematic fund returned -2.48% in August 2026, versus +1.54% for the S&P/ASX 200 Accumulation Index (dividends reinvested).

A.L.F.R.E.D. reads August as a market in transition: momentum held up broadly across US equities and Avangard's own systematic portfolios, prompting the model to close its existing downside hedges and rotate into a broader set of individual positions while staying fully invested.

The Avangard Systematic Australian Equity Fund returned -2.48% in August, its second month of trading, against +1.54% for the S&P/ASX 200 Accumulation Index, an alpha of -4.02%. The ASX 200 extended its run to a fifth consecutive monthly gain during August (Market Index, August 2026), a genuinely resilient market, and the Fund captured real strength from its Materials sector positioning. That gain was more than offset by the cost of closing the Fund's hedge book and by weakness in a small number of individual positions. Materials sector positioning, specifically copper and diversified metals mining exposure, was the standout contributor, adding an estimated 0.98% to return. Avangard's own breadth data continues to show US equities and our own systematic model portfolios broadly higher on long-term trend, while domestic ASX breadth remains closer to neutral, a market that has held up rather than broken down, but hasn't broadened out either. The single largest cost this month was closing the Fund's hedge book. Early in August, the model closed both downside-oriented US equity hedge positions carried since July, positions that had been July's largest detractor as US markets continued building strength against them. Closing them crystallised management's estimate of approximately 0.76% of the Fund, and the book was rotated into a broader set of individual equity positions in the same period, remaining fully invested throughout. As of the end of August, the Fund carried no hedge against US equity downside, a position that will be revisited at the next weekly rebalance. Separately, one individual position was exited later in the month after its own long-term momentum trend turned bearish, a straightforward application of trend-following discipline rather than a discretionary call. Two conditions would revise the current stance: a rollover in US momentum would support re-establishing hedge exposure, and a broadening in domestic breadth beyond its current near-neutral split would support greater conviction in the Fund's newly-rotated positions. Neither is a prediction, they are the specific triggers the model is watching. Throughout August, positioning stayed fully within Avangard's predefined systematic investment criteria: the hedge closures, the rotation, and the trend-flip exit all originated from ALFRED's objective, rules-based signals, not a discretionary view on where markets were headed. A materially negative month despite a broadly resilient market is a real, near-term cost, and we've said so plainly above, but management remains confident in the disciplined application of that process.