Staying true to label is the secret to Certitude’s success in the Alternative Investments category in the Money Management/Lonsec Fund Manager of the Year awards.
Asian markets are quite volatile, and the primary role of the Asian Opportunities Fund is to protect investors on the downside, according to Certitude managing director Craig Mowll.
The risk/return profile of the fund is very strong as a consequence, he said.
“You need something that has the ability to manage through the volatility so you don’t lose what you gained on one year,” he said.
The fund has given top quartile performance but with half the volatility of its competitors. Its has caught up to 94 per cent of the upside in emerging markets, and protected about 60 per cent of the downside.
That makes it quite attractive to investors, Mowll said.
Investors should remember that Asia is far bigger than just the China story, he said.
But at the same time, even though China is slowing down, it’s growth potential far exceeds what investors from many other markets could consider going into, he added.
Finalist BlackRock was chosen for the consistency and long track-record of its Global Allocation fund. The fund has been running for more than 24 years globally.
That long track-record is helped by over 40 investment professionals dedicated to the strategy.
The size of the fund, $85 billion with $1 billion of that in Australia, clearly warrants that level of commitment, said head of ishares at BlackRock, Mark Oliver.
The fund has navigated some very challenged markets to good effect, he said.
It has been able to outperform global equities – with one third less of the risk – since its inception, Oliver said.
BlackRock plans to ensure that potential investors can continue to meet with the investment team, he added.
Finalist LHP has had outstanding performance, particularly over the last year, Mowll said.
That performance has been achieved with less volatility than any other of its competitors in the market, he said.
The fund manager moves between the sub-asset classes virtually every day to get the maximum performance over time, Mowll said.
LHP’s role is to find managers around the world that provide specialist capabilities to get the most alpha out of each strategy, he said.
Fund managers need to avoid manufacturing daily liquidity, because that will deviate from the real benefits that absolute return funds can give, Mowll warned.
They will also miss out on a whole range of alpha opportunities open to absolute return funds as well, he said.
The resulting hybrids will lag in performance, Mowll said.
