Melbourne, 10 July 2018 – Australia Ratings has assigned a ‘STRONG’ investment rating to VP Capital Fund 1(“the Fund”).

A STRONG investment rating indicates a strong conviction that the fund can deliver a risk-adjusted return in line with its investment objective; based on an investment rating scale used by Australia Ratings to indicate how well we believe a fund will perform against a range of risks.

The VP Capital Fund 1 is a new boutique offering for Australian equity investors.While it is size and sector agnostic, the Fund has a focus on small (to micro) and mid-cap opportunities.The manager seeks to invest in companies where there is a large potential upside, together with a limited downside risk.The resulting portfolio is concentrated, with 10 – 15 stocks.

The Manager, VP Capital is benchmark agnostic, with a focus on absolute returns.The fee structure means that the Manager is only compensated when the Fund has positive returns, with no ongoing management fee.

Australia Ratings’ analyst Maggie Callinan said “The Strong investment rating reflects the investment manager’s experience for this strategy and the process incorporates good downside risk management.”

Since its inception in February 2018, the fund has outperformed the ASX All Ordinaries and the ASX Small Ordinaries in both quarters, including in Q1 when both indices reported negative returns.

Australia Ratings believes that an investment in the fund can provide an exposure to Australian cap equities with potential to outperform the underlying market and a form of downside protection. An investment in the fund should be considered as a long-term investment.

Australia Ratings has also assigned its Product Complexity Indicator of ‘YELLOW’ - a complex financial product - indicating that the investment manager may invest in less liquid markets such as small cap and micro-caps, and may on occasion instigate short positions.

A full rating report is available from


Maggie Callinan, Director 03 8080 6684

About Australia Ratings

Australia Ratings is a local rating agency that provides timely and credible ratings information and research to the broader investment community.As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds.We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating

Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term.The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.

About the Product Complexity Indicator

Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.


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