The long and the short of long-short ETFs

Ten Cap, led by prominent Australian portfolio manager Jun Bei Liu, has this week expanded retail investor access to its long/short capabilities with the ASX launch of the Ten Cap Alpha Plus Complex ETF (TCAP.xasx).

The new ETF provides listed market access to Liu’s fundamental active strategy, which was previously available only through an unlisted fund structure. As Ms Liu herself noted this week: "This is democratising smart investing, (giving) investors the opportunity to participate in an institutional-quality product running for two decades."

TCAP’s listing also raises a broader question: where do long/short ETFs fit within modern portfolio construction?

1. The lowdown

Long/short ETFs aim to generate returns that are less dependent on the direction of the broader market. They do this by combining long positions in securities the manager believes will outperform with short positions in those expected to lag.

The result can be a performance profile that is more stable through different market regimes, albeit more reliant on the manager’s skill in security selection and risk control.

For example, Liu’s track record in identifying high-conviction ASX opportunities has been central to the unlisted Alpha Plus fund’s performance profile. Since Liu took over management of the fund in March 2019, the fund has delivered 12.3% per annum versus the ASX 200 accumulation index’s 9.7%, for an annualised net outperformance of 2.6%.

Because they are actively managed and able to adjust positioning quickly, long/short ETFs can also respond to shifts in earnings cycles, sector rotation or macroeconomic trends while retaining the advantages of the ETF structure: intraday tradability, transparent pricing, and low minimum investment requirements.

2. The upshot

In general, long/short ETFs like TCAP can (in accordance with their TMD) act as satellite or minor allocations within a diversified investment portfolio, reflecting their higher-risk and potentially higher-return characteristics relative to core index exposures. The consideration of management fees reflects the complexity of active long/short management.

For investors interested in accessing active long/short strategies through a listed vehicle, these products provide a more accessible entry point to a specialist manager’s investment approach.

3. Examples of ASX-listed long/short ETFs:

• Ten Cap Alpha Plus Complex ETF (TCAP.xasx)
• VanEck Australian Long Short Complex ETF (ALFA.xasx)
• Plato Global Alpha Fund Complex ETF (PGA1.xasx)
• GCQ Global Equities Complex ETF (GCQF.xasx)

Mention of specific securities or instruments is for illustration only and does not constitute an offer, solicitation, or recommendation to trade. Examples of ETFs or equities are available globally; these are referenced for educational purposes only.

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Data sources: Ten Cap website and public materials. Information current as of 24 November 2025.

Disclaimer: This information is for general informational purposes only and does not constitute financial advice. It does not take into account your objectives, financial situation or needs. Before making any investment decision, you should consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD), and seek professional advice where appropriate.