Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Alternative Ucits: Johim Alternatives leverages the risk rally

Alternative Ucits: Johim Alternatives leverages the risk rally
CF Johim Alternatives began its life as the multi-asset, absolute return component of the company’s private client funds, and still has an important place in internal portfolios as a complement to traditional, long-only strategies. This has provided a defensive underpinning which has served it well.

Since being packaged as a Ucits vehicle in 2009, the fund has posted consistently positive annual returns, with the exception of 2011, when a large allocation to long/short equity struggled.  

Over three years, managers Tomi Satchell, Steven Iffland and John Bellamy, all A-rated by Citywire, have returned 16% versus an index return of 3.03%, marred only by -5.30% in 2011 versus the index’s 0.8%.

‘That was almost entirely due to long/short equity exposure,’ said Satchell. ‘A lot of [sector] managers struggled with the extraordinary volatility, which we have a lot of sympathy for, and it’s worth noting that a lot of recent outperformance has been due to keeping faith with managers.’

Having entered the summer with a near 50% allocation to long/short equity, the managers pared this back to 30% by mid-autumn, primarily by shedding funds with a long bias.

This has remained stable since, although assets have been shifted into more cyclical exposure via funds such as James Hanbury’s Odey UK Absolute Return and the small cap focused SW Mitchell’s SWMC European fund.

Top-down asset allocation is provided by Johim’s investment committee, with the managers primarily providing quantitative fund selection process overlay to this, looking at three-year risk-adjusted returns, volatility and correlation metrics, backed up by qualitative manager meetings.

The fund is currently positioned to exploit an ongoing liquidity rally in risk assets, with the expectation of moving closer to market neutral as the upward momentum begins to run out of steam.

‘Economic indicators have been much stronger than expected, and the ECB’s LTRO [long-term refinancing operation] was a very important step,’ said Satchell. ‘We are cognisant of what happened in 2009, but it is a dynamic process, for this moment in time we are in risk assets.’

In addition to the 30% allocated to equities – tilted toward developed market cyclicality – the fund has 16% in global macro thematic, 11% in volatility strategies, 12% in commodities, 7% in inflation strategies, 10% in property and, 9% in traded life policies and 6% in an aircraft leasing fund.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Gutteridge and Foster discuss UK commercial property with Jason Baggaley, manager of the Standard Life Property Income investment trust

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Gutteridge puts the heat on Odey's asset allocation maestro with a couple of tough questions.

Brewin's Foster & Gutteridge: searching for the yield of dreams

Brewin's Foster & Gutteridge: searching for the yield of dreams

Guy Foster and Ben Gutteridge discuss the latest upbeat US payroll report and how it has increased the probability of a first hike in interest rates in June.

Your Business: Cover Star Club

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Growing a business is the main aim of many company owners but managing that growth in a controlled way is just as important

Wealth Manager on Twitter