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L1 L1 CAPITAL L1 Long Short Fund Limited Quarterly Report | JUNE 2021 The L1 Long Short Fund portfolio returned 8.8 % ( net ) ¹ for the June quarter ( ASX200AI 8.3 % ) . Over the past year , the portfolio has returned 72.9 % ( net ) ¹ ( ASX200AI 27.8 % ) and the LSF share price has increased 108.2 % . The strong performance over the past year has been driven by stock selection with a broad range of contributors across the portfolio . Global markets continued to perform well over the quarter supported by robust economic data , further corporate earnings upgrades and positive vaccine progress . The upbeat quarter contributed to the ASX200 returning 27.8 % for the financial year , its strongest performance in more than 30 years . Whilst the sharp rebound in markets has meant that we currently see less upside in equities relative to 12 months ago , we believe markets should remain supported in the near term driven by continued fiscal and monetary stimulus , rising M & A activity and further economic re - opening . Portfolio Positioning 3 Months 6 Months 1 Year Returns ( % ) ( Net ) ¹ L1 Long Short Fund S & P ASX 200 AI Out- performance 8.8 8.3 +0.5 18.3 12.9 +5.4 72.9 27.8 +45.1 29.7 8.6 +21.0 16.6 9.6 +7.0 LSF Since Inception p.a. Strategy Since Inception² p.a. 11.4 10.9 +0.5 22.7 8.2 +14.4 2 Years p.a. 3 Years p.a. While we are more positive on lower P / E ( value ) stocks at present , than higher P / E ( growth ) stocks , our portfolio is not exposed to structurally challenged " deep value " stocks . As shown in the table below , the companies that we are long are expected to grow their earnings very strongly ( much stronger than the market average ) despite trading at lower multiples . They are typically trading below a market multiple due to concerns about a short term or historical issue or they are currently about to enjoy a cyclical recovery or benefit from an operational turnaround . Our longs are also expected to generate more than twice the free cashflow of our shorts , which provides them more opportunities for dividends , buybacks or bolt - on acquisitions . The numbers below use consensus broker forecasts , rather than L1 earnings estimates . Figure 1 - Portfolio metrics ( median ) FY22 Forecasts P / E EPS Growth YoY Free Cash Flow Yield Dividend Yield Portfolio longs Portfolio shorts ASX 200 13.5x 16.0 % 22.0x 19.6x 19.1 % 9.9 % 7.2 % 2.9 % 2.9 % 4.8 % 1.7 % 2.9 % Source : Bloomberg consensus estimates as at 9 July 2021 , calculated as the median for the relevant constituents . Excludes entities with no estimates over the forecast period . From an individual stock perspective , with the positive performance over the quarter we have taken profits in several " winners " including companies where value catalysts have played out , such as Aristocrat Leisure , Lovisa , Nine Entertainment and Wells Fargo . We have recycled this capital into existing high conviction positions and a selection of new ideas . As many sectors continue to trade on " top - down " trends , rather than stock - specific fundamentals , we continue to find numerous exciting stock opportunities yet to be recognised by the market on both the long and short sides . 1 All performance numbers are quoted net of fees . Net returns are calculated based on the movement of the underlying investment portfolio . Figures may not sum exactly due to rounding . Past performance should not be taken as an indicator of future performance . ² Strategy performance and exposure history is for the L1 Long Short Limited ( LSF : ASX ) since inception on 24 Apr 2018. Prior to this date , data is that of the L1 Capital Long Short Fund - Monthly Class since inception ( 1 Sep 2014 ) . Quarterly Report | JUNE 2021 | L1 Long Short Fund Limited 1