Tuesday, 03 February 2015 - 20:00
Seed Weekly - Hedge fund managers throwing their hats into the ring
Hedge fund managers throwing their hats into the ring
Globally hedge funds have a bad stigma around them, and unfortunately our local hedge funds have been painted with the same brush. While hedge funds aren’t currently regulated in South Africa, the fund managers are. Over the past year the FSB and Treasury have been working together in bringing hedge funds in under collective investment schemes regulation.
Hedge fund managers like Visio Capital and 36ONE Asset Management have both been managing unit trusts for close to 10 years with great success. The graph below shows the cumulative investment growth of the Visio BCI Actinio and 36One Met Flexible Opportunity funds. While both of the funds are in the ASISA Flexible sector, they are typically fully invested into equities.
Over this period both funds comfortably outperformed the All Share Index and the Average General Equity fund. Both fund managers build their portfolios from the bottom up by doing fundamental research on the underlying companies.
Some of the other hedge fund managers that have been making name for the last couple of years are Fairtree, Laurium, Bateleur and Tower. Sanlam has approached Capricorn, Matrix and Kaizen to manage some of the Sanlam Select funds on their behalf. Below is the trailing performance of the funds compared to their peers.
Source: Morningstar Direct
Does a hedge fund manager bring something different to table compared to a traditional fund manager?
Firstly, good hedge fund managers aren’t content with an analyst or broker report. They are not afraid to do the hard work of valuing a company themselves. They are not afraid to get on a plane or bus to go visit the company sites. They don’t only meet with the company’s management, but also meet with their competitors and suppliers. They try to understand the full value chain and where in the chain the company fits in. They do deep, thorough fundamental research on the companies.
Secondly they are used to shorting (selling) a company. A long only unit trust manager is typically only focused on finding good companies. A hedge fund manager isn’t only focused on finding good companies, they are also experienced in searching for bad companies. Therefore, they know which companies to avoid.
Thirdly, hedge fund managers are able to understand and use options in protecting capital and reducing the volatility of their funds. Not all of the hedge fund managers make use of options, but those who do know how to use them in the most cost effective way to enhance the return of their funds.
So do hedge fund managers bring something different to the table? In my opinion, yes. Their different return profiles blend well with other managers during the portfolio construction process. We make use of hedge fund managers to manage long- only strategies in the Seed Absolute Return and Seed Flexible funds.
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Tue, 03 Feb 2015
On Tuesday the JSE Overall Index continued its upward momentum gaining 1.08% carried by surging resource stocks which gained 3.93% and financials which gained 1.31%.
South Africa's power utility Eskom will implement rolling blackouts on Tuesday from 1500 GMT to 2000 GMT, the state-owned company said on its official Twitter account.
Eskom had earlier on Tuesday canceled planned rolling blackouts because it had fixed technical faults on some of
Egyptian troops fired warning shots over the frontier into Gaza on Tuesday after a bomb exploded on Gaza territory near an Egyptian army convoy, Egyptian security sources said, blaming Islamist group Hamas, which denied the charge.
Five Ukrainian soldiers have been killed and 27 wounded in fighting with pro-Russian separatists in Ukraine's eastern regions in the past 24 hours, Kiev military spokesman Andriy Lysenko said on Tuesday.
Marina's brother and a close family friend have both been killed on the frontline in Ukraine's east. Now she has had to say goodbye to her husband, Ruslan, called up to fight pro-Russian separatists in Kiev's latest conscription drive.
World Markets (Spot Prices)
|JSE Top 40||17:00||45708.71||520.35||1.15%|
|JSE Indust 25||17:00||64183.60||37.00||0.06%|
|Rand / Dollar||19:59||11.3831||-0.1126||-0.98%|
|Rand / Pound||19:55||17.2120||-0.0365||-0.21%|
|Rand / Euro||19:55||13.0627||0.0341||0.26%|
|Rand / NZD||19:59||8.3311||-0.0594||-0.71%|
|Rand / AUD||19:55||8.8404||-0.1210||-1.35%|
|Yen / Dollar||19:59||117.3530||-0.3300||-0.28%|
|Euro / Dollar||19:59||0.8714||-0.0108||-1.22%|
|Dollar / Euro||19:59||1.1471||0.0136||1.20%|
|Pound / Dollar||19:55||0.6601||-0.0052||-0.78%|
Click here for the Sharenet Spot Price page
The JSE Today
* Includes all listed instruments on the JSE
|Index Name||RP||Move||% Move|
|Financial & Ind. 30||68,797.16||281.83||0.41%|
|Oil & Gas ||35,905.64||1849.74||5.43%|
|Oil & Gas Producers ||19,305.80||994.57||5.43%|
|Basic Materials ||24,485.78||739.69||3.11%|
|Forestry & Paper ||36,522.15||484.23||1.34%|
|Industrial Metals ||13,349.38||597.53||4.69%|
|General Industrials ||164.17||-.95||-0.58%|
|Consumer Goods ||62,899.09||41.48||0.07%|
|Automobiles & Parts ||7,200.98||-45.29||-0.63%|
|Health Care ||10,946.04||-120.42||-1.09%|
|Index Name||RP||Move||% Move|
|Food Producers ||9,963.04||59.03||0.60%|
|Personal Goods ||967.30||7.29||0.76%|
|Consumer Services ||15,718.09||-66.75||-0.42%|
|General Retailers ||82,738.66||1126.90||1.38%|
|Travel & Leisure ||6,488.60||18.34||0.28%|
|Support Services ||2,843.56||11.23||0.40%|
|Non-life Insurance ||58,688.32||497.69||0.86%|
|Life Insurance ||39,272.10||354.79||0.91%|
|General Financial ||3,953.61||57.96||1.49%|
|SHARIAH TOP40 ||3,582.37||107||3.08%|
|FTSE/JSE SHARIAH ALL||3,880.40||96||2.53%|
|FTSE JSE Fledgling ||6,897.85||17||0.24%|
|FTSE/JSE Alt X ||1,543.98||20||1.29%|
|SA LISTED PROPERTY ||638.57||-0.03%|
|CAPPED PROPERTY ||549.76||0.06%|
|FTSE/JSE RAFI 40||9,931.76||171||1.75%|
|Capped Top 40||24,409.53||285||1.18%|
|Capped All Share||26,349.65||281||1.08%|
|JSE TABACO ||8,270.72||-35||-0.42%|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|PPC||PRETORIA PORT CEMNT||HOLD||30/01/2015|
|Expected||Company Name||Fin. Date|
|04/02/2015||RESILIENT||December 2014 (Interim)|
|05/02/2015||NET1UEPS||December 2014 (Interim)|
|05/02/2015||NET1UEPSP||December 2014 (Interim)|
|05/02/2015||NET1UEPSPP||December 2014 (Interim)|
|05/02/2015||RESGEN||December 2014 (Interim)|
|IMPL CONV||29/01/15||13/02/15||23/02/15||ZAR 250.0000|
|ECSP A||23/01/15||06/02/15||16/02/15||ZAR 0.7671||
|AWA||Arrowhead Properties Ltd.||03/02/2015||Confirmed|
|AWB||Arrowhead Properties Ltd.||03/02/2015||Confirmed|
Stock Exchange News Service
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