Launch Pad: 7 funds under the microscope
by Harry Brooks on Jan 16, 2013 at 14:32
Citywire Global tracks down the major fund launches announced in December 2010 to see how they have fared two years on.
Seven funds, two years on
Fund launches are a familiar sight here on Citywire Global. A select few will go on to become legendary names, while many more will quietly fade away.
Here we showcase seven funds which came to our attention in December 2010, and examine how they've performed in the two years since they were launched.
Note: Comparative indices are chosen according to Citywire's methodology, and may not match the funds' chosen benchmarks.
Fund: Hector Golden Global
Sector: Citywire Alternative Ucits Event Driven
First up is Compagnie de Gestion et Investissements (CGI)'s Hector Golden Global fund, which aims to reproduce the GSI global hedge fund's results within a Ucits III format.
The only difference between them is the maximum investment permitted in a single security, which is limited to 10% under Ucits III regulations as opposed to the 20% maximum concentration permitted under GSI’s memorandum.
The hedge fund has generated an average annual performance of 11.6% since it was launched 12 years ago, according to GSI.
However, both the hedge fund and its Ucits mirror have suffered since the latter was launched in December 2010, with Hector Golden Global down 6.6%. The average manager in the Ucits universe delivered a gain of 0.53% over the same period.
Sector: Emerging market hard currency bonds
The PineBridge Global Emerging Markets Corporate Bond fund invests in bonds issued from emerging markets in Europe, Latin America, Asia, the Middle East and Africa.
At launch it looked set to be run single-handedly by US-based PineBridge's managing director, Steve Cook, but he's since been joined by Anders Faergemann.
Performance in the first year was relatively muted, but the past year has left the fund up 17.5% since launch. However, this still lags the performance of the JP Morgan EMBI Global benchmark, which has delivered a 26.4% return over the same period.
Managers: Allan Conway, Rami Sidani
Sector: Equity emerging markets others
Frontier markets equity fund had a tough first year following its launch, but it's been on a steady upward trajectory since the summer of 2011 and is now ahead of where it started. It has significantly outperformed its MSCI Frontier Markets benchmark, which has fallen over 6% down over the past two years.
Kuwaiti and Qatari stocks are prominent in the $53 million fund, which also has exposure to countries including the United Arab Emirates, Nigeria, Argentina and Pakistan.
Speaking at its launch in December 2010, co-manager Allan Conway, said: 'Investors are increasingly seeking to establish a strategic allocation to emerging markets rather than using them tactically due to an increase in risk appetite, which we believe should lead to greater focus on the frontier markets.'
Sector: Global equity other
PineBridge's merger arbitrage fund has sought to gain a foothold in this rapidly growing sector.
The Alt Ucits fund’s strategy means it has low correlation with equity and bond markets and offers investors the opportunity to achieve consistent returns with low volatility.
Although it's not matched the FTSE World's return over the past two years, it has avoided the worst of the lows, as the above chart shows.
PineBridge managing director Lan Cai initially headed the fund, but it's now overseen by Meg Sullivan and Jason Weiss.
Manager: Kevin Corrigan
Sector: European corporate bonds
Geneva-based Lombard Odier Investment Managers' '5B' bond fund is focused on the investment opportunities in the crossover between the lower end of investment grade and the upper end of high-yield corporate bonds.
Having beaten its benchmark in its first few months, it dropped below the index in the summer of 2011 and has not recovered since having underperformed by 2.5 percentage points with returns of 12.8%.
The Ucits III-compliant is run by a five-person team led by Kevin Corrigan, head of credit at the firm.
Corrigan laid out the attractions of the fund when it was launched two years ago: 'Clients today seek higher returns and capital preservation. They face a low yield, high risk environment with scarce visibility on growth.'
'The actively managed 5Bs Fund takes advantage of mis-pricings that occur when the rising stars and fallen angels are crossing over between investment grade and high yield.'
Manager: Esther Chan
Sector: Emerging market hard currency bonds
The first of two Aberdeen Asset Management funds featuring in Launch Pad is the group's Emerging Markets Corporate Bond Fund. Investors who bought into the fund at launch have received returns of 25.8%, slightly down on its benchmark which rose 26.3% over that period.
It was initially run by Aberdeen's head of emerging market debt Brett Diment and his team but Esther Chan has since taken the reins.
Emerging nations account for an increasing chunk of the the world's corporate bond market, and according to the firm now make up 20% of the market.
'The fundamental case for developing economies remains compelling,' Diment said at its launch. 'They are healthier and less leveraged than developed countries, as are the companies in them.'
Manager: Jamie Cumming
Sector: Global equities
The second Aberdeen fund to be included in our analysis, this time one with an ethical remit, has also underperformed since it was launched two years ago.
An ethical screening process means companies that derive more than 10% of turnover from alcohol, tobacco, gambling or weaponry are a no-go, and only 5% of turnover is allowed to come from pornography.
The fund has returned almost 9% since launch, virtually all of which was generated last year, but it hasn't managed to outdo the alcohol, gambling and tobacco including FTSE World benchmark though, which is ahead with a 13.4% gain.
More about this:
Look up the funds
- Hector Golden Global A
- Nextam Partners Binver International A
- Pinebridge Global Funds - Emer Mkts Corp Bond A
- Schroder ISF Frontier Markets Equity A Cap
- Pinebridge Global Funds - Merger Arbitrage A
- LO Funds - Euro BBB-BB Fundamental (EUR) R A
- Aberdeen Global - Emerging Mkts Corp Bd Z1 Inc USD
- Aberdeen Global - Ethical World Equity A2 Acc