Friday 25th July 2014
slib33
FRIDAY ANALYSTS TICKER: July 25th 2014 - According to Adam Cordery, global head of European fixed income, Santander Asset Management, and fund manager for the Santander Euro Corporate Short Term and Euro Corporate bond funds, “Pricing of risk assets doesn’t offer much of a margin for error at the moment. And now Europe is starting to go on holiday, market liquidity may get poorer than normal, and any buys today may well have to be holds until September. It is always interesting to note what yields are required to attract clients to financial products. Twenty years ago, bond funds offering yields of 10%+ could generally attract lots of client interest very quickly. However as rates have come down over the years, so the yields clients demand have fallen. Now 4% seems to be the new 10%, he say. Cordery thinks that unfortunately, investors often want today the yield/risk mix that was available last year, so the products that get launched, sold and bought in size may be more risky than people think. “Products with 4% yield will sell well today, but to get to a 4% yield in Euro you need to invest in a portfolio with an average rating of single-B, and that is far from being risk-free. I get the impression the conventional wisdom today is to think that interest rates must surely go up soon and the main risk to bond portfolios is an increase in bund yields. Because of this many investors are buying short-duration products and floating rate notes, perhaps viewing them as a safe choice, almost like cash. It is possible however that these products may yet prove to have a considerable sensitivity to changes in credit market spreads and/or bond market liquidity, and may prove to be no protection at all.” - Commenting on the RBS share price jump, Dr Pete Hahn of Cass Business School, says “It's hard to tell whether the RBS share price jump today is more about relief or optimism. The former is about fewer fines, fewer losses on loans, and fewer costs in a shrinking business and possibly dividends for shareholders. And there's the rub, owning shares (as opposed to interest bearing debt) should be about optimism and long-term growth in dividends. But from a shrinking business? Few would argue that RBS' retail and corporate bank had efficiencies to be gained and cash flow that might be converted to dividends; yet like most banks, RBS' cost of equity remains stubbornly and appropriately above its ability to provide a return on that equity. For shareholders, current improvements should mean dividends in the medium term but a recognition that RBS may lack any merit for new investment and delivering any long-term dividend growth - not good. While many large retail banks are getting safer, in some aspects, and we often speak of them in terms of moving toward utility type models, banks take risks, are cyclical, face competition, have new business challengers, and are simply are not utilities. Investors shouldn't get ahead of themselves here.” - According to the monthly survey held by the central bank of Turkey, the country’s capacity utilization (CU) rate declined slightly to 74.9% in July from 75.3% in June. Meanwhile, seasonally adjusted (SA) CU also declined to 74.3% from 74.7% in June, writes Mehmet Besimoglu at Oyak Yatirim Research. As for manufacturing confidence, the index declined to 109 from 110.7 in May. On SA basis, the index also edged down slightly to 106.4 from 107.2. SA capacity utilisation was broadly stable in 1H14, averaging at 74.7%. This is the same level with the 2013 average. Despite the political turmoil and volatility in financial markets, activity has been relatively resilient. Export recovery & government spending supported production in 1H. Following the elections, public spending relatively decelerated. The turmoil in Iraq also decelerated export recovery from June. Nevertheless, we still expect 3.5% GDP growth in 2014, writes Besimoglu.

Stenham launches new global macro fund

Friday, 06 January 2012
Stenham launches new global macro fund Investment firm Stenham Asset Management has recently launched a new global macro fund of hedge funds called Stenham Helix. Stenham has over $1.1bn invested in global macro hedge funds and $2.7bn invested in hedge fund strategies overall. Stenham has been invested in global macro hedge funds since the 1980s and its flagship macro fund of hedge funds, Stenham Trading, has achieved an annualised return of +9.07% since inception compared to the HFRX Macro Index which has posted a return of 6.51% and the MSCI World Equity Index which was 4.13% over the same period. http://www.ftseglobalmarkets.com/

Investment firm Stenham Asset Management has recently launched a new global macro fund of hedge funds called Stenham Helix. Stenham has over $1.1bn invested in global macro hedge funds and $2.7bn invested in hedge fund strategies overall. Stenham has been invested in global macro hedge funds since the 1980s and its flagship macro fund of hedge funds, Stenham Trading, has achieved an annualised return of +9.07% since inception compared to the HFRX Macro Index which has posted a return of 6.51% and the MSCI World Equity Index which was 4.13% over the same period.

The Stenham Helix fund aims to invest in similar types of macro managers but to assemble a portfolio where the liquidity provided by the underlying managers allows Stenham to offer monthly liquidity with 35 days’ notice. The fund will consist of a concentrated portfolio of around 15 managers with a target return of Libor +5% to 6% and low volatility. The minimum investment is $25,000 with no lock up period. The Stenham Helix fund has launched with $36m and is available in USD, GBP and EUR share classes.

Javier Uribarren, investment director at Stenham Advisors Plc says the firm launched the fund in response to both continued interest in global macro strategies and a continuing need for liquidity. “We have never gated or restricted redemptions from any of our funds because our fundamental philosophy is to ensure that there is a comfortable match between the liquidity terms offered to investors and those available from the underlying hedge funds that form the investment portfolio,” he says.

 “In the latter half of 2011, countries in the eurozone came under growing pressure to show monetary and fiscal restraint, investable trends developed and the fundamental outlook became more accurately reflected in the pricing of financial assets. This environment is ideal for global macro strategies,” he adds.

Global macro funds have a certain characteristics that favour their adoption in a volatile market: the ability to access all markets and asset classes globally; highly liquid portfolios in which exposures can be quickly changed; risk management and superior trade construction to limit the downside when shorter term moves are not consistent with long-term views; and substantial organisations with outstanding talent pools and operational controls, suggests Uribarren.

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