ABSA Offshore Strategy Unit Trust Name of Group: ABSA Offshore Fund Managers (Jersey) Ltd. Tel: (27) ...
Name of Group: ABSA Offshore Fund Managers (Jersey) Ltd. Tel: (27) 11 480 5000 +44 (0) 1534 823000
Name of fund: ABSA Offshore Strategy Unit Trust. The fund is registered in Jersey and has a Dublin listing. The base currency is in US dollars and the minimum investment is US$25,000.
Sub funds: The Multi-Strategy Fund launched on 1 January 1998; The Growth Strategy Fund launched on 1 October 1998
Investment Objective: The fund is a multi-manager hedge fund allocating money to a variety of alternative money managers pursuing different alternative investment strategies. It is advised by TriAlpha Asset Management.
The objective is to deliver consistent long-term capital appreciation in US dollar terms, substantially in excess of the chosen benchmark index but with a similar or lower level of volatility. The benchmark index for the Multi-Strategy Fund is the Salomon World Government Bond Index (SBWGBI). The Growth Strategy Fund's benchmark index is the MSCI World Index.
TriAlpha, the manager, adopts a rigorous process in selecting the appropriate underlying investment, including determining the style and volatility framework, asset allocation decisions, onsite manager visits and ongoing review of performance. The manager is assisted by EIM SA in this process. EIM advises on US$6bn of funds allocated to alternative investment managers.
Fund Performance details: January continued to be another good month for both funds in relative terms. The Multi-Strategy Fund was up 21.72% in 1999 compared with a -4.26% fall in the SBWGBI. The Growth Strategy Fund was up 0.63% in January compared with a -5.72% fall recorded by the MSCI.
Outperformance of the two relevant benchmark indices was similar or higher than in November and December, which produced high absolute returns. This underlined the ability of the funds to de-correlate from traditional markets when these markets perform poorly.
The Multi Strategy Fund has recorded a positive month in every case when the SBWGBI recorded a negative month. The Growth Strategy Fund recorded a positive month in over 65% of cases when the MSCI recorded a negative month.
Investment Strategy: The good performance in January can be mainly attributed to the arbitrage managers. They profited from the volatile environment in equity and fixed income markets. Returns were more than twice the monthly level that is expected from them in the long term.
The long/short equity managers produced a flat month on average, with the European managers performing better than the US managers. The macro-managers were negatively influenced by the turnaround in world equities and bonds.Taking into account the current weakness of equity and bond markets, the fund is performing extremely well and continues to prove itself as a means of diversification with an exceptional risk/return profile.
The largest asset allocation in the Growth Strategy Fund is to US long/short equity managers that account for 28% of the fund, 25% is allocated to global macro managers and 21% is allocated to European long/short equity funds. In the Multi-Strategy Fund, arbitrage managers account for the largest asset allocation accounting for 45% of the fund. Global macro managers account for 18% and 24% is split between European and US long/short equity managers.
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