Having helped DIY investors successfully invest in the Australian share market for over 30 years, we know the value of a well diversified portfolio.
Using the foundations of our quantitative financial health methodology, we spent two years optimising our trusted methodology for the U.S. market. Using a multi-factor model and our Financial Health overlay we have been able to identify a portfolio of financially healthy stocks that are ideal for long term growth.
The end result is our Lincoln U.S. Growth Funds, a Hedged and Unhedged Fund designed for Australian DIY investors who are looking to capitalise on long-term growth in the U.S. market.
By Tim Lincoln Managing Director and Chief Investment Officer
As of 24 February 2025
For over 12 months, the Lincoln U.S. Growth Fund had employed a tactical position to reduce portfolio volatility. This defensive approach has coincided with an extraordinary risk rally, which has seen equity markets globally push through all-time highs. As a result, the Fund has experienced significant underperformance vs the S&P500 Index.
We are pleased to announce that the Fund no longer holds any equity hedging instruments and is fully invested back into U.S listed equities. We would like to reiterate that our cautious approach throughout 2024 was designed to protect unitholder capital amidst what we considered a very uncertain market period. A restrictive interest rate was widely expected to lead to a weaker earnings environment and downgrades, which in historical cycles would likely be complimented with sharp market falls. However, corporate earnings have been resilient against our expectations, particularly across the large-cap end of the market. Significant capital investment in themes like Artificial Intelligence has continued to see global capital flow into U.S. markets. And with the Federal Reserve having released the pressure valve on monetary policy over the December quarter – swiftly cutting the federal funds rate – the Fund team doesn’t see a compelling reason to remain defensive any longer, especially when the earnings outlook for above-average growth appears to be improving markedly.
Whilst the path ahead will no doubt be uncertain, especially with a second term of the enigmatic Trump administration, our lesson learned will be to embrace the volatility that comes with markets and invest exclusively in high-quality U.S. growth companies. Our view is that the U.S. Fund has always been invested in outstanding companies, and we are disappointed that our decision to hedge returns in 2024 significantly held back returns. Moving forward, we will remain unwavering in our belief in the value of investing in exceptional companies.
With this determination and deep gratitude for our loyal unitholders, we are optimistic about entering a more favourable environment in 2025, where we aim to create value for investors once again.
For more information, please contact our Fund Team at 1300 676 333
All Lincoln Indicators Managed Funds are carefully structured to offer investors peace of mind regarding the security of their investments. While the value of investments can fluctuate, we focus on investing in financially stable companies with a low risk of failure. Additionally, we ensure that all client investments are held in a segregated trust with our trusted custodian, J.P. Morgan Chase Bank. As a further safeguard, we are regulated by the Australian Securities and Investments Commission (ASIC), and we adhere to stringent regulatory requirements that clearly define our operations and limitations.
| Investment Type |
Lincoln U.S. Growth Fund Unhedged Exposed to currency risk |
Lincoln U.S. Growth Fund Hedged Protected from adverse currency fluctuations |
|---|---|---|
| Minimum Suggested TF | 5 Years | 5 Years |
| Minimum Initial Investment | $5,000 | $5,000 |
| Minimum Additional Investment | $1,000 | $1,000 |
| Management Fee (p.a) | 1.0% | 1.0% |
| Performance Fee (p.a.) | 20% of outperformance of the benchmark | 20% of outperformance of the benchmark converted to AUD |
| Entry/exit Fees | nil | nil |
| Minimum Withdrawal | $1,000 | $1,000 |
| Minimum Balance | $5,000 | $5,000 |
| Buy/Sell Spread | 0.25% / 0.25% | 0.25% / 0.25% |
| Distribution Frequency | Annual | Annual |
| Date of inception | 1 July 2020 | 1 July 2020 |
If you invest in the Unhedged fund, you are exposed to fluctuations in the Australian dollar. This can be a good thing if our dollar falls relative to the US dollar. For example, if you were invested in the Lincoln U.S. Growth Fund Unhedged and the value of the Australian dollar decreased relative to the US dollar, then the value of your portfolio would increase. Of course it can also work the other way around.
If you invest in the Hedged fund, we use strategies to offset the impact of currency fluctuations. This means if you invest in the Lincoln U.S. Growth Fund Hedged you are protected from the adverse impact of a rising Australian dollar. But equally, you don’t get to benefit from situations where the Australian dollar is falling.
If you have a strong view on where the Australian dollar is heading, you could favour one approach over the other.
Distributions are paid annually, with the option to reinvest or receive cash directly in to your nominated bank account.
No, the Lincoln U.S. Growth Fund has no minimum investment timeframe and you will not be penalised if you decide to redeem your funds within a short period of time. But we suggest a minimum of 5 years to allow an adequate timeframe for the Fund to deliver on its long-term objectives.
Lincoln U.S. Growth Fund Hedged: The performance fee is 20% p.a. of outperformance of the S&P 500 Accumulation Index (USD).
Lincoln U.S. Growth Fund Unhedged: The performance fee is 20% p.a. of outperformance of the S&P 500 Accumulation Index converted to Australian Dollars.
Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Lincoln Australian Growth Fund, Lincoln Australian Income Fund, Lincoln U.S. Growth Funds (“the Fund”). Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT).
This website has been prepared by Lincoln Indicators to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Lincoln Indicators, Equity Trustees nor any of its related parties, their employees or directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.
Lincoln’s Fund’s Target Market Determination is available here. A Target Market Determination is a document which is required to be made available from 5 October 2021. It describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed.
To discuss the future of your investments in detail, book in a free consultation with a Lincoln representative.
To discuss the future of your investments in detail, book in a free consultation with a Lincoln financial expert.
