September 2026 Report - Avangard Systematic Fund

Market commentary

Monthly Investment Overview

Our rules-based investment process moved from a high cash basis in July, 67.5% of NAV, to becoming more fully invested in August, falling to 4.9%. Cash fluctuated through September, spiking briefly in the first week before falling to near zero by mid-month and rebuilding to 7.5% by month end, consistent with settlement timing around a heavier-than-usual rotation. The Fund added new positions across healthcare, energy, Materials and digital-asset-linked themes during the month, including a new Materials position that became one of the Fund's five largest holdings by month end, while separately closing a broader cluster of resources and mining positions, spanning lithium, rare earths and gold exposure, after their long-term trends broke down.

A.L.F.R.E.D. equity market regime assessment for September 2026

Regime

Volatile

Regime assessment

Our proprietary A.L.F.R.E.D. model read market conditions as volatile during September 2026. Equity market volatility rose across every timeframe the model tracks. This led to the broad ASX indices turning down during the month of September.

Portfolio manager's note

With US equity market volatility rising, the Fund's hedge against a US equity market decline, BBUS and SNAS reopened, and closed again as the underlying signal reversed during the month, ending September with no active position in either. We treat these inverse ETF positions as insurance: you pay for the cover whether or not you end up needing it, all to preserve capital when the model sees uncertainty building. Ten resources and mining positions, spanning lithium, rare earths and gold exposure, were closed as their long-term trends broke down. Two technology positions, EIQ and ELS, were also closed after their own trends broke down. Eighteen new positions were established across a broader range of sectors and geographies during the month, including CSL (healthcare), HACK (technology), FUEL (energy) and VBTC (digital assets), continuing the diversification that began with the Fund's re-entry in July. Throughout September, positioning stayed within Avangard's predefined systematic investment criteria. The hedge cycling, the position closures, and the new names added all originated from A.L.F.R.E.D.'s rules-based signals, not a discretionary view on where markets were headed. A positive-alpha month built on disciplined process, rather than a market call that happened to work, is the outcome this approach is designed to produce. Entering October, A.L.F.R.E.D.'s regime classification is Volatile, reflecting rising US equity market volatility and a weakening trend across broad ASX indices, even as the ASX 200's own options-implied volatility remained within its normal range at month end. Net equity exposure stood at approximately 86-87% of NAV at month end, total long positions net of BBOZ, a domestic hedge position established during the month and held through month end, with approximately 7.5% held in cash.

Contributors and detractors

Contributors

• Positions held through the month rather than sold, including MI6, SFR and CBE, the Fund's largest existing Materials weightings, were the main driver of the Fund's result, offsetting an estimated 5.8% of NAV in realised trading losses elsewhere in the book. • DPM, a Gold-linked position held through the month, also contributed positively, consistent with A.L.F.R.E.D.'s own trend data reading Gold positively across every timeframe for most of September. • OOO, linked to commodity prices, was sold for a profit mid-month, contributing +0.45% to the Fund, the only trade in September that made money.

Detractors

• Ten resources and mining positions, VMM, CXO, PLS, AEU, LIN, EUR, RIO, SRL, GDX and PDI, spanning lithium, rare earths and gold exposure, were sold once their long-term price trends turned negative. This was the single largest cost to performance for the month, detracting -3.31% from Fund NAV. • EIQ fell sharply on 9 September after the US FDA issued a Not Substantially Equivalent determination on the company's EchoSolv HF device. The position was closed the same day, not as a discretionary reaction to the news itself, but because the price move broke the stock's long-term trend signal, triggering the same rules-based exit process applied to every position in the book. The realised loss, -0.87% of NAV, was the Fund's largest single-position loss of the month, held inside a book of 48 other positions at month end. • ELS was sold after its long-term trend broke down, detracting -0.82% from Fund NAV.

Performance summary

Strategy vs benchmark, since inception

Total returns of the Avangard Australian equity strategy against the S&P/ASX 200 Accumulation Index.

Period	Strategy	Benchmark	Alpha
1 Month	-1.15%	-2.42%	+1.26%
3 Months	-4.05%	+1.33%	-5.38%
6 Months	-5.95%	+5.43%	-11.39%
1 Year	-4.13%	+2.68%	-6.81%
FY 2025/26	+15.91%	+6.11%	+9.80%
Since inception (cumulative)	+7.18%	+10.77%	-3.59%
Since inception (p.a.)	+4.20%	+6.26%	-2.06%

Track record blends the closed Avangard Alpha Fund (23 Jan 2025 to 30 June 2026) with the current Avangard Systematic Australian Equity Fund from 6 Jul 2026. Cumulative is the total return since 23 Jan 2025, Since Inception p.a. is the annualised equivalent of that same return. All periods are point to point to the report month end, so trailing periods that exclude the 2025 drawdown can exceed the since inception figure. Returns are net of fees unless otherwise stated. Past performance is not indicative of future results.

Growth of A$1,000,000 since 23 January 2025

Month-end NAV unit price series. Strategy stitches the closed Avangard Alpha Fund with the Avangard Systematic Australian Equity Fund (NAV restarts at $1.0000 from Jul 2026), plotted against the S&P/ASX 200 Accumulation Index.

Hypothetical growth of A$1,000,000 invested at strategy inception (23 Jan 2025), using month-end NAV unit prices. Past performance is not a reliable indicator of future returns.

Portfolio positioning

Exposure at month end

Invested

92.5%

Cash

7.5%

Top holding

3.6%

Top 5 holdings

Ranked by weight of gross asset value at month end.

#	Code	Security	Weight
1	CDA	Codan Ltd	3.6%
2	MI6	Minerals 260 Ltd	3.0%
3	MAH	Macmahon Holdings Ltd	2.9%
4	IKO	Ishares MSCI South Korea ETF	2.8%
5	SLS	Solstice Minerals Ltd	2.8%

Large / mid / small cap exposure

Direct Australian stock sleeve by S&P/ASX index tier. Excludes ETFs, LICs and cash.

Direct stocks = 50.9% of portfolio. Bars below show the composition of that sleeve.

Large (ASX 50)
17.1%
Mid (ASX 51-100)
22.3%
Small (ASX 101-300)
41.5%
Micro (ex-ASX 300)
19.1%

Portfolio breakdown

Sector uses GICS for direct stocks. All ETFs are aggregated as 'Thematic ETFs'.

Asset class

3 groups

Sector / theme

11 groups

Important information

Performance figures shown are for the Avangard Australian equity strategy and combine the closed Avangard Alpha Fund (23 January 2025 to its final pricing date, 25 June 2026) with the current Avangard Systematic Australian Equity Fund from 6 July 2026. The benchmark shown is the S&P/ASX 200 Accumulation Index. Alpha is calculated as strategy return minus benchmark return over the same period. Strategy returns are calculated from unit prices and are net of all fees, including management and performance fees.

Past performance is not a reliable indicator of future performance. Returns are historical, are not guaranteed and may vary. Portfolio holdings, sector and market-cap allocations shown are point-in-time at month end and will change without notice.

This report is issued by Avangard Investments Pty Ltd (ACN 698 681 248), a corporate authorised representative (CAR No. 001321538) of FB Corp Limited (ABN 16 675 876 490, AFSL 557810), and is available to wholesale clients only under s761G of the Corporations Act 2001 (Cth). It is general information and does not take account of the objectives, financial situation or needs of any particular person. You should consider the appropriateness of the information having regard to your own circumstances before making any investment decision.