Normally, I don’t like buying ASX shares that are up 40% in six months. As a value investor at heart, I try (with varying degrees of success) to follow Warren Buffett’s playbook of buying high-quality companies at cheap prices.
However, I can make exceptions. And I am seriously considering making one when it comes to the L1 Global Llog Short Fund Ltd (ASX: GLS).
The L1 Global Long Short Fund is a listed investment company (LIC) that has quite an interesting history. In fact, not too long ago, it had a different name and a different manager. Yep, the L1 Global Fund was formerly known as Platinum Capital Ltd. However, the manager of this LIC had been struggling for a number of years, and decided to accept a takeover offer from L1 Group Ltd (ASX: L1G). Upon the completion of this takeover, the L1 Global Long Short Fund was born.
L1 was already famous for its L1 Long Short Fund (ASX: LSF) LIC, which, despite a rocky start, has gone on to become one of the ASX’s best-performing managed investments. That fund has an ASX-focused mandate, though. L1 wanted to build a fund that was unconstrained in its scope, and we have it here on the ASX today with the L1 Global Log Short Fund.
Like its locally-focused Long Short Fund, the L1 Global Fund employs both traditional ‘long’ investing alongside short-selling in order to make returns. This makes it quite unique on the ASX, which only has a handful of funds that employ both strategies. Whilst risky, using both can enable this LIC to profit in both bull and bear markets.
Is this ASX share a no-brainer buy in 2026?
Now, the L1 Global Long Short Fundhas several traits that would normally put me off buying it. For one, it uses short-selling, which is a tactic I don’t usually like to see in my investments. For another, it charges a steep management fee of 1.44% per annum (plus a performance fee).
However, I can’t ignore the numbers. As we covered a few months ago, L1’s team trialled the strategy that it now uses for the Global Long Short Fund. This trial saw L1 record a return of 67.5% between January and October. Since the start of October, this LIC has risen by almost 35%.
If this breakneck performance can be maintained over a number of years and all economic and market cycles, it could mean L1 Global Long Short Fund is one of the best shares on the ASX.
So I’ll be keeping a close eye on this investment. If management keeps making the right calls, I might have to buy some shares of my own.
The post This ASX share is up 40% in 6 months and I want to buy it appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.