Lincoln U.S. Growth Funds

Invest in the numbers for diversification

For long-term capital growth and international portfolio diversification

Introducing the Lincoln U.S. Growth Funds

with Tim Lincoln, Co-Founder and Chief Investment Officer and Kien Trinh,
Head of Research
Video duration: 1m 25s

Diversify for new opportunities and growth

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.

Current strategic insights

Tim Lincoln

By Tim Lincoln Managing Director and Chief Investment Officer
As at 14 May 2024

The Lincoln U.S. Growth Fund has employed a tactical position aimed to reduce risk/volatility in our managed fund portfolio. Our defensive strategy was executed in August 2023 which involved the Fund hedging its equity exposure with the ProShare Ultra Short S&P500 ETF (SPXU). Our decision has the effect of neutralising the impact of market fluctuations on the unit prices for our investors. However, as intended, investors in the Lincoln U.S. Growth Fund Unhedged will still be exposed to fluctuations in the Australian Dollar / US dollar pair.

This means that we have removed broad market risk from our total return profile. Therefore, our unitholders won’t fully participate in market rallies, but they will not be impacted by market corrections. Unit prices are now solely determined by how well the companies that we invest in perform relative to the broader market. If they outperform, unit prices will go higher, and vice versa.

Many of our clients who know me personally are surprised by my bearish view and the tactical portfolio positioning, as I am usually 100% invested and block out the noise. But this time, I truly believe that market behaviour has been irrational and entirely driven by momentum and excessive optimism for a soft economic landing. The current price to forecasted earnings multiples for the S&P500 Index is trading at extreme levels, and we believe this is a dangerous level to price-earnings as we believe that tight monetary conditions will lead to negative earnings revisions in 2024. Thus, with prices highly elevated, we believe that positioning our portfolio defensively is the responsible path to take.

The extraordinary market rally that has transpired from November 2023 to date has had a significant impact on our relative returns to the S&P500 Total Return Index. Although painful, the Fund team are prepared to endure short-term underperformance because we have high conviction that capital preservation tactics are the prudent measure to take in a highly uncertain environment. When the pricing environment better reflects the underlying risks and fundamentals of the market, we fully intend to deploy capital back into the market.

For more information, please contact our Fund Team directly on 1300 676 333

Actual performance over time

Fund Launched July 1 2020

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(a) 01/07/2020 is the inception date of the Lincoln U.S. Growth Fund Hedged and Lincoln U.S. Growth Fund Unhedged funds.
(b) Total Fund return is inclusive of income paid and payable to the Fund to unit holders, in addition to the difference in exit prices for the relevant periods net of management fees, ongoing fees and expenses, and assume distributions are reinvested and that no tax is deduct Performance quoted is historical actual performance. Investments go up and down. Past performance is not a reliable indicator of future performance.
(c) S&P 500 Total Return Index is sourced from Standard and Poors.

Backtesting performance prior to launch

Simulated total return of $100,000 as at 1 January 2004^

Absolute performance of 12.92% p.a. from January 2004 - April 2020
Significant outperformance during major corrections - 2008, 2018 and 2020
Average outperformance of  the S&P 500 benchmark of 4.64% p.a. from January 2004 - April 2020
94.2% classification accuracy predicting corporate failures, including Lehman Brothers, CIT Group, Enron and MF Global
Outperformed the S&P500 benchmark in 12 out of the 17 back-tested years

Back Test Disclaimer ^The chart shows back-test performance of stock selection methodology. These returns are hedged in USD. Back-test Total Returns (TR) are calculated using exit prices and are net of management fees (1% per annum), transaction costs (10 basis points), assume distributions are reinvested and that no tax is deducted. Returns are subject to the following portfolio constraints – Simulated portfolio is always fully invested and is rebalanced at the end of each month. (a) The Back-Test start date is 1 January 2004. Back-Test performance figures are calculated from 1 January 2004 to 30 April 2020 and are annualised. The Lincoln U.S. Growth Fund Hedged and Lincoln U.S. Growth Fund Unhedged ('Funds') benchmark is the S&P 500 Total Return Index. Performance quoted is Back-test performance. Performance shown on the chart are simulated returns. Investments go up and down. Past simulated performance may not be a reliable indicator of future performance. All Back-test figures are as at 30 April 2020. The level of returns will vary, and future returns may differ from past returns. You should therefore consider its appropriateness, in light of your objectives, financial situation and needs, before acting on it. If our advice relates to the acquisition or possible acquisition of a particular financial product, you should obtain a copy of and consider the Product Disclosure Statement (PDS) at before making any decision.

Global opportunity, open communication.

  • May be suitable for investors and SMSFs seeking diversity and strong long-term capital growth
  • Exposure to high-quality U.S. growth stocks
  • Option to hedge against currency volatility
  • Takes advantage of all market conditions
  • Highly competitive management fees
  • 24/7 online account access
  • Regular investor events
  • Direct access to the investment team
  • Dedicated investor liaison
“If you don’t understand the true fundamental quality and financial health of a business, then you are purely speculating and seriously risking financial loss.”
Tim Lincoln, Co-Founder and Chief Investment Officer#

Maximum security for peace of mind.

All Lincoln Indicators Managed Funds are established to provide investors with maximum peace of mind about the security of their investments. Not only do we invest in financially healthy companies that have a low risk of failure, but we also hold all client investments in a segregated trust with our custodian J.P. Morgan Chase Bank. Furthermore we are regulated by the Australian Securities and Investment Commission (ASIC) in Australia with strict regulatory requirements which govern exactly what we can and can’t do.

Key information

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

Join us for our weekly market round-up

The expert Stock Doctor team discuss the market movements and the stocks to watch, insights previously reserved for Members only.
Filmed on Jun 14th, 2024

Taking Stock Weekly Insights


Here are some of our most frequently asked questions.
What is the difference between the Hedged and Unhedged Fund?

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.

How often are distributions paid?

Distributions are paid annually, with the option to reinvest or receive cash directly in to your nominated bank account.

Am I locked into my investment?

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.

How is the performance fee calculated?

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.

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All financial services are provided by Lincoln Indicators Pty Ltd ABN 23 006 715 573 (Lincoln) as the Corporate Authorised Representative of Lincoln Financial Group Pty Ltd ABN 70 609 751 966, AFSL 483167.

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