The Fund returned -3.69% in October 2026 versus +1.38% for the S&P/ASX 200 Accumulation Index

October was the Fund’s weakest month since the 1 July 2026 transition, and it ran against the direction of the benchmark: the index recovered while the Fund fell. Before fund fees and expenses, resources and mining cost 1.44% of the Fund, the largest drag. Materials and Gold, September’s leadership, turned down on the short, medium and long-term signals together, and A.L.F.R.E.D. closed all ten of its resources and mining positions. Communication Services cost 0.79%, almost entirely from Tuas Limited, a position established and closed between 22 and 29 October (-0.75%). Technology cost 0.47%, international and thematic funds 0.39% and industrials 0.34%. What worked was the second-half redeployment into large, liquid names: CSL Limited (+0.25%), Aristocrat Leisure (+0.19%), Pro Medicus (+0.18%) and Corporate Travel Management (+0.11%), alongside the Betashares Global Energy Companies ETF (+0.20%). Health care added 0.40% in total and the major banks 0.18%. What did not work was the first-half resources book, led by Solstice Minerals (-0.28%), DPM Metals (-0.25%), Cobre (-0.21%) and Minerals 260 (-0.21%), together with SKS Technologies (-0.23%), DXN (-0.21%) and the L1 Long Short Fund (-0.21%). The Fund’s hedges (Inverse ETF) cost 0.11% on a net basis. The domestic inverse ETF position stayed in place while Australian indices recovered (-0.20%), partly offset by a United States equity hedge reopened on 19 October (+0.15%). The call that was tested was the Fund’s defensive stance. Cash rose from 5% to 76% of the Fund between 1 and 16 October while the benchmark finished the month higher. The model sold on position-level signals rather than an index view, so the Fund held much of its capital in cash through part of the recovery. This is the cost of a process that cuts exposure when trends break, and October showed that cost plainly. Nineteen of the 25 Australian sector we model, and segment measures were up on the short-term signal at month end, 11 on the medium-term signal and 7 on the long-term signal. The long-term signal for the broad indices remained down, and 50.9% of the Fund remained in cash for that reason. Entering November, A.L.F.R.E.D.’s regime classification is Recovery. Net equity exposure stood at approximately 37 to 38% of the Fund at month end, total long positions net of the domestic and United States inverse positions, with 50.9% held in cash. Throughout October, positioning stayed within Avangard’s predefined systematic investment criteria. The exits, the cash build, the redeployment and the hedges all originated from A.L.F.R.E.D.’s model based signals, not a discretionary view on where markets were headed.