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Funds of the Year
11 July 2014
Winners of the Global Investor/ISF Investment Excellence Awards fund launches and fund of funds of the year 2014 titles
Global Investor/ISF Investment Excellence Awards
Fund of Funds of the Year - Aurum Isus
For more than 15 years Aurum Fund Management's flagship Isis
fund has produced consistent risk-adjusted returns, low
correlation to traditional risk assets and low
In 2013 the fund provided an attractive alternative to
investment grade fixed income, finishing the year up more than
9%, during which time the Barclays Global Aggregate Bond Index
delivered its first year of negative returns since 2005.
The fund has delivered solid performance during bond sales.
During the "taper tantrum" of May and June 2013 it returned
1.1%. And, when tapering was announced in December, the
Barclays Global Aggregate Bond Index declined 0.6% whereas the
fund was up 0.9%.
Aurum's core team has been together - managing its own and its
clients' assets - for almost two decades. This has allowed a
consistent investment philosophy, facilitating a focus on
ensuring capital preservation while compounding returns.
Aurum's approach to investment involves identifying managers
that deliver true alpha and a diversified stream of returns. It
believes in a "commonsense" approach to the investment process,
with experience and judgment of the critical elements.
Aurum's disciplined investment process uses proprietary
software. Having a team of in-house programmers that have
worked at the firm for many years enables it to develop
specialist tools, and its universe screening and investment
process leverage both proprietary systems and long-term
Fund Launch of the Year: Global - Neuberger
On September 25 2013 Neuberger Berman launched its
Global Bond Absolute Return fund, addressing increasing demand
for absolute return fixed income that mitigates the effect of
rising interest rates.
The fund was launched with assets of $42m and is managed within
the global fixed income team, which includes seven senior
portfolio managers - two in London and five in the US.
Performance in the year-to-date was 0.69% (USD I Acc) and 2.4%
Neuberger Berman uses sector specialists and analysts to select
securities and has 80 to 100 people generating ideas on a daily
basis that feed into the fund. The fund has an absolute return
objective and aims to generate an annual return 4% above cash
over a medium to long-term investment horizon.
The portfolio managers utilise a proprietary framework called
State-Space Analysis that combines multiple sources of alpha.
This fundamentals-driven approach is designed to avoid
persistent macro or thematic biases in the portfolio, and
targets a low beta to fixed income markets over a full market
This process is currently deployed in the management of both
benchmarked and unconstrained strategies in the US. In the
model, a range of fundamental variables are taken into account,
along with the probability of these scenarios
Neuberger Berman has a tested process for assessing relative
value and has established sector specialists across all the
different opportunity sets within fixed income. The company's
fixed income platform spreads across the globe, including
offices in the Netherlands and Singapore in addition to its
core UK and US presence.
Fund Launch of the Year: Asia - BNP Paribas Investment
In March 2014 BNP Paribas Investment Partners launched
a fund investing in Chinese RMB offshore bonds, its Flexi I RMB
Short Duration Bond Fund.
The fund's features have been developed to limit capacity
constraints and serve a wide range of client needs. Offshore
RMB bonds currently offer 150bp to 200bp yield pick-up relative
to similarly rated bonds in other currencies - both for
corporate and government - and the fund is expected to yield
4.5% in RMB terms gross of fees.
The fund was designed to address concerns relating to investing
in bonds in a rising interest rate environment, so it was set
up as a short duration fund.
Offshore RMB bonds have low duration and high yield-to-duration
ratio - 1.5 - compared with major asset classes. Several
competitors have a duration exposure that is higher - often
between 3 and 4.8 years - or lower if they are positioned as a
currency fund with a duration of less than three months.
The fund leverages a three-year track record from a
previously-established fund, run since February 2011, that
invests approximately 70% in RMB offshore fixed income.
The average credit rating of the fund has been set at
investment grade - BBB - and RMB bonds from the same issuer
have approximately half the volatility of their US dollar
counterparts, leading to smoother returns and diversification
in times of market stress.