Wealth Manager - the site for professional investment managers

Register to get unlimited access to 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.

Related Fund Managers

Tomi Satchell
Tomi Satchell
9/18 in Alternative UCITS - Fund of Funds (Performance over 3 years) Average Total Return: 7.02%
Steven Iffland
Steven Iffland
10/18 in Alternative UCITS - Fund of Funds (Performance over 3 years) Average Total Return: 7.02%
John Bellamy
John Bellamy
11/18 in Alternative UCITS - Fund of Funds (Performance over 3 years) Average Total Return: 7.02%
Citywire TV
Play Picton: the UK property hotspots for rental income

Picton: the UK property hotspots for rental income

Picton Property Income CEO Michael Morris reveals how he is planning to ride the ‘ripple effect’ as UK economic growth spills out from the capital across the country.

Brewin's Foster talks financial crisis MkII with Allianz's Riddell

Brewin's Foster talks financial crisis MkII with Allianz's Riddell

This week Brewin Dolphin's head of research talks to Mike Riddell, fund manager at Allianz Global Investors, about the forces driving bonds markets in a tumultuous week for markets.

Play Henderson's Hermon: how to be defensive in smaller caps

Henderson's Hermon: how to be defensive in smaller caps

Hermon, who manages the Henderson Smaller Companies trust, talks about he will tackle a 'challenging' 2016.

Your Business: Cover Star Club

Profile: 'what we are doing at Mosaic is Darwinian'

Profile: 'what we are doing at Mosaic is Darwinian'

The changes in financial services over the last few years may leave some destitute warns Marco Sambucci of Mosaic Money Management

Wealth Manager on Twitter