ASHBURTON REPLICA EURO ASSET MANAGEMENT FUND
* Raging Bull Award for the Best Offshore Global Asset Allocation Fund – the top-performing fund on a risk-adjusted basis over five years to December 31, 2010
A global asset allocation fund with a lower-risk equity mandate beat 19 other global asset allocation flexible and prudential funds to win the Raging Bull Award in this sector for the third year in a row.
The Ashburton Replica Euro Asset Management Fund can invest no more than 50 percent of its funds in global equities.
The Jersey-based fund’s cautious stance gave it the highest PlexCrown Fund Rating for risk-adjusted performance over periods up to five years and the Raging Bull Award for best asset allocation among offshore funds that can be marketed in South Africa.
On straight performance, the fund beat its global asset allocation peers over five years, with a return of 5.71 percent a year over the period, according to ProfileData.
At times over the past five years the Ashburton Replica Euro Asset Management Fund has been as high as 70 percent in cash and its equity exposure has been as low as 10 percent – notably after the 2008 credit crisis took its toll on financial markets.
At other times, a lower cash weighting has helped the fund, Tristan Hanson, the fund manager, says.
In 2007, cash weightings were relatively high and equity weightings were fairly low, which provided some offset when the equity bear market began at the end of the year, he says.
From a low equity exposure in April 2009, the fund started to buy more global shares, and the fund’s equity weighting was over 40 percent throughout last year, he says.
Some 46 percent of the fund was in global bonds at the end of last year.
While Hanson is not enthusiastic about global bonds in the benchmark index, he has concentrated the fund’s holdings in pockets of value he perceives. This includes long-term (30-year) US and British government bonds which should do well if fears over global growth resurface. They also offer good diversification to the fund’s other shorter-term bonds, Hanson says. The fund is also exposed to corporate bonds and some government bonds in emerging markets, he says.
The Replica Euro Asset Management Fund manages the fund’s currency exposure through derivatives and has used this to its advantage. Notably, late in 2009 the euro reached highs that Ashburton believed were not sustainable.
As it transpired, the Greek public debt crisis then unfolded and the euro weakened substantially, and the fund benefited from its currency positions.