For immediate distribution
December 16th 2011
Double digit returns in 2011 as the Bloxham Midas Global Absolute Return Fund outperforms sector by + 12 per cent
– but fund manager Kevin McConnell warns global absolute return sector will need to ‘re-assess its offerings as just 25 per cent of the sector in positive territory over 2011
Midas Global Absolute Return Fund produced a double digit return in 2011, ahead of the absolute return sector by c12%
Midas made a positive return on 8 of the 10 worst trading days in the equity markets in 2011, with a volatility of just 8.3%.
The fund correlation to the equity market is just 0.3, providing definitive diversification benefits to investors reviewing the overall asset allocation decision.
Some of the toughest market conditions seen in decades
The fund will continue to position for tough market conditions in 2012.
Next year (2012) is likely to give fund managers their toughest ever challenges when deciding on asset allocation as high volatility will continue to impact on the global macro environment, according to Kevin McConnell, Head of the team that manages the Bloxham Midas Global Absolute Return Fund.
And while the fund has returned double digit growth over one of the most difficult years on record*, McConnell warns that competitor managers within his sector will need to reassess their offerings, as 75 per cent of the sector heads towards the end of the year in negative territory.
“Asset allocation for 2012 represents one of the toughest challenges to the investment community in decades,” he said.
“Core bond markets have been loosing credit quality but benefiting from the “safe haven” trade against a deteriorating equity market, and the move to “alternatives” is likely to accelerate as investors decrease long equity and long bond allocations,” added McConnell.
“Correlation within the equity market continues to run at historically high levels, reflective of extreme single directional movements seen at indices level.
“Whether driven by the loss in market fire power of the long only equity funds or the ever increasing influence of ETFs on market movements, the benefits of diversification across the equity market subsectors are decreasing.
“The Bloxham Midas Global Absolute Return Fund produced a double digit return in 2011, ahead of the absolute return sector by c12%, in some of the toughest market conditions seen in decades, and will continue to position for tough market conditions in 2012,” said McConnell.
Using a range of complex technical indicators to drive investment decisions on market exposure and stock selection, Midas’s approach has proved exceptionally resilient in generating return in tough markets.
“The maximum net long or short exposure of the fund is 30%, and the fund’s design acts to benefit from market volatility by holding strong cash levels (minimum of 30%), actively trading oscillations in stocks and positioning for prolonger positive or negative trends in the market,” he said.
Uncertainty over the future of the Euro, global sovereign debt and the quality of global economic estimates, leave the expected market performance for the next 12 months fully dependent on the impact of significant future intervention.
However, with the threat of rating downgrades, the room for intervention is becoming more and more limited, reckons McConnell.
The Midas Global Absolute Return Fund has seen double digit rise year on year (12 per cent Dec 2010 – Dec 2011) with lower volatility
Offshore absolute return sector average up just 0.66% per cent in the same period
The Fund produced a positive return on 8 of the 10 worst days in global equity markets over the past year demonstrating its strong downside protection characteristics.
The Fund trades in liquid large cap stocks in Europe and the US
Midas system covers over 2,000 stocks and sectors producing both a bottom up & top down view of critical signals in the market
Maximum net long or short exposure of the fund 30%
Fund’s design protects against significant market gyration
Also ring fences against strong sell offs in the equity markets
Bloxham’s Midas Global Absolute Return Fund is based on a proprietary ‘Midas’ model developed in-house since 2002 by Kevin McConnell and his team.
Today the model analyses stocks in a very advanced, technical screening mechanism that has been ‘bomb proofed’ through the crash of the past few years. This screening mechanism provides a daily shortlist of stocks that gives high levels of conviction.
Bloxham Midas Global Absolute Return Fund
- UCITS iii Fund
- Euro share classes launched on October 1st 2010
- Sterling share classes now set up and ready to be launched
- AMC 1.5% Retail share class; AMC 0.75% Institutional share class
- Hurdle rate 3% (net of fees)
- If hurdle rate not achieved, 0.5% AMC rebate to Fund
- No initial charge
- Performance fee 10% (over hurdle rate)
- Daily dealing
Contact for further information is:
Shane O’Neill, Head of UK Distribution @ Bloxham
Mob: 00353 87 2074840 (anytime)