Ten Cap Alpha Plus Fund swung to a $53.5 million operating loss in FY2026 as every unit class lagged the S&P/ASX 200 benchmark. Net assets fell to $1.38 billion, while its new TCAP active ETF completed its first partial year on the ASX.
- $53.5 million operating loss, versus a $150.3 million profit
- All four unit classes underperformed the S&P/ASX 200 benchmark
- Net assets declined to $1.377 billion from $1.535 billion
- Class D ETF launched on ASX as TCAP in November 2025
- KPMG issued an unqualified audit opinion
Investment losses drive sharp earnings reversal
Ten Cap Alpha Plus Fund swung from a $150.3 million operating profit to a $53.5 million loss in the year ended 30 June 2026, with the reversal driven primarily by a $62.7 million net loss on financial instruments measured at fair value. A year earlier, those investments had generated a $130.5 million net gain.
The result came despite $45.9 million of dividend and distribution income. Fund expenses rose only modestly to $36.8 million from $35.8 million, including $14.3 million in management fees and costs and $14.7 million in transaction costs. The annual report does not identify the individual securities or trades responsible for the investment loss.
Every unit class trails its benchmark
Performance was weak across the existing fund structure and the newly launched ETF class. Class A returned negative 3.47% after fees, Class B negative 3.45% and Class C negative 3.03%, against a 6.11% return for the S&P/ASX 200 Accumulation Index.
Class D, the exchange-traded class that began trading as TCAP on the ASX on 19 November 2025, returned negative 1.58% against a 5.78% benchmark return for its reporting period. The figures are after fees and expenses but before tax, and cover different periods for the established classes and the new ETF.
Fund size contracts as redemptions accelerate
Net assets attributable to unitholders fell to $1.377 billion from $1.535 billion. Cash redemptions totalled $196.4 million, against $95.3 million of applications, while distributions paid or payable dropped sharply to $31.5 million from $147.6 million.
The contraction was most visible in Class A, whose closing net assets fell to $178.1 million from $301.4 million after $194.4 million of redemptions. Class B remained the largest class at $1.186 billion, although its net assets also declined from $1.227 billion. Class D ended the year with $4.4 million of net assets and 459,000 units on issue.
Long-short structure leaves a material short exposure
The fund held $1.567 billion of financial assets at fair value at year-end, alongside $201.0 million of financial liabilities at fair value. The liabilities represented short positions in equity securities and listed unit trusts, up from $122.9 million a year earlier.
That structure is central to the fund's risk profile. The report states that losses on long equity positions are limited to the value of those positions, while losses on equities sold short can be unlimited. A 10% movement in the investment portfolio was estimated to produce a $136.6 million change in operating profit and net assets in either direction at 30 June 2026.
KPMG clears accounts while highlighting portfolio valuation
KPMG gave the financial statements an unqualified audit opinion. It identified the valuation and existence of the $1.567 billion investment portfolio as the key audit matter, citing the size of the holdings and their importance to reported investment income and capital performance.
All of the fund's fair-value investments were classified as Level 1 at year-end, meaning they were based on quoted prices in active markets. A former $23 million Level 3 holding moved into Level 1 after GemLife Communities Group listed on the ASX as GLF on 8 July 2025.
Bottom Line?
The next test is whether TCAP can attract durable ETF assets while the underlying long-short strategy rebuilds performance against its benchmark.
Questions in the middle?
- Which long and short positions accounted for the $62.7 million fair-value loss?
- Can the TCAP ETF build scale and liquidity after ending its first reporting period with $4.4 million in net assets?
- Will redemptions remain elevated if performance continues to trail the S&P/ASX 200 benchmark?