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Performance update
The Man OM-IP funds retraced by an average of -2.0%^ for the June quarter.
Performance over the second quarter saw risk appetite gather momentum during April due to positive US corporate earning figures. However, over May and June the continuing European sovereign debt concerns and fears of a global economic slowdown resulted in challenging trading conditions.
This chart shows the contribution of each sector that AHL trades (as represented by the AHL Diversified Program).
Sector attribution of the AHL Diversified Program
March 2011 to June 2011
| Currencies |
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| Interest rates |
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| Bonds |
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| Energies |
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| Metals |
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| Stocks |
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| Agriculturals |
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| Credit |
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Source Man Investments.
Note Past performance is not a reliable indicator of future performance. Performance figures are calculated net of all fees as at 30 June 2011.
^ Past performance is not a reliable indicator of future performance. The average performance figure for the Man OM-IP funds is an average quarterly return figure for all the Man OM-IP funds.
Performance over the long term
The Man OM-IP funds aim for medium to long term capital growth. The chart below shows the performance of the first Man OM-IP fund, Man OM-IP 220, since its inception. The performance, net of fees, is compared to Australian and global stock market indices.
Man OM-IP 220 vs stock market indices
1 August 1997 to 30 June 2011
Source Man Investments Australia Limited.
Note Performance figures are calculated net of all fees as at 30 June 2011. Past performance is not a reliable indicator of future performance.
Fund prices for the Man OM-IP funds
The Man OM-IP funds below are closed to new investments. Please check products & prices for open funds. For more information on each fund, click on the fund name.
| Fund | Ccy | Inception | Valuation date | Rising Guarantee+ | Net Asset Value* |
|---|---|---|---|---|---|
| Man OM-IP 220 | |||||
| AUD | Aug 97 | 30 Jun 11 | $4.5987 | $5.4662 | |
| Man Series 2 OM-IP 220 | |||||
| AUD | Jan 98 | 30 Jun 11 | $4.3027 | $4.7416 | |
| Man Series 3 OM-IP 220 | |||||
| AUD | Jul 98 | 30 Jun 11 | $3.6965 | $3.9367 | |
| Man Series 4 OM-IP 220 | |||||
| AUD | Jun 00 | 30 Jun 11 | $3.1606 | $2.9659 | |
| Man Series 6 OM-IP 220 | |||||
| AUD | Jun 01 | 30 Jun 11 | $2.4016 | $2.1777 | |
| Man Series 7 OM-IP 220 | |||||
| AUD | Jun 02 | 30 Jun 11 | $1.3901 | $2.0042 | |
| Man Series 8 OM-IP 220 | |||||
| AUD | Nov 02 | 30 Jun 11 | $1.4330 | $1.8339 | |
| Man Series 9 OM-IP 220 | |||||
| AUD | Oct 03 | 30 Jun 11 | $1.1810 | $1.4932 | |
| Man Series 10 OM-IP 220 | |||||
| AUD | May 05 | 30 Jun 11 | $1.2155 | $1.5111 | |
| Man Series 11 OM-IP 220 | |||||
| AUD | Apr 06 | 30 Jun 11 | $1.0105 | $1.1370 | |
| Man Series 12 OM-IP 220 | |||||
| AUD | Dec 07 | 30 Jun 11 | $1.0000 | $0.9726 | |
| Man OM-IP 220 2008 | |||||
| AUD | Dec 08 | 30 Jun 11 | $1.0000 | $0.9161 | |
| Man OM-IP 320 Diversified | |||||
| AUD | Dec 98 | 30 Jun 11 | $2.0824 | $1.6923 | |
| Man OM-IP Strategic | |||||
| AUD | Aug 99 | 30 Jun 11 | $2.6834 | $2.1623 | |
| Man OM-IP Strategic Series 2 | |||||
| AUD | Dec 99 | 30 Jun 11 | $2.1429 | $2.0009 | |
| Man OM-IP Hedge Plus | |||||
| AUD | Jan 02 | 30 Jun 11 | $1.2221 | $1.3499 | |
| Man OM-IP 130 Plus | |||||
| AUD | Jul 03 | 30 Jun 11 | $1.5028 | $1.4699 | |
| Man OM-IP 140 Plus | |||||
| NZD | Aug 03 | 30 Jun 11 | $1.6060 | $1.5929 | |
| Man OM-IP 140 Plus (AUD) | |||||
| AUD | Jun 04 | 30 Jun 11 | $1.5879 | $1.4938 | |
| Man OM-IP 150 Plus (NZD) | |||||
| NZD | Jun 04 | 30 Jun 11 | $1.7016 | $1.6307 | |
| Man Series 2 OM-IP 150 Plus (NZD) | |||||
| NZD | Aug 05 | 30 Jun 11 | $1.5000 | $1.3874 | |
| Man Series 2 OM-IP 140 Plus (AUD) | |||||
| AUD | Aug 05 | 30 Jun 11 | $1.4000 | $1.1768 | |
| Man OM-IP MultiStrategy | |||||
| AUD | Jan 04 | 30 Jun 11 | $1.0661 | $1.0227 | |
| Man OM-IP 15seven** | |||||
| AUD | Oct 04 | 30 Jun 11 | $1.1347 | $1.6502 | |
| Man Series 2 OM-IP 15seven | |||||
| AUD | Dec 06 | 30 Jun 11 | $1.0181 | $1.1892 | |
| Man OM-IP Stratum | |||||
| AUD | Dec 04 | 30 Jun 11 | $1.0358 | $1.2263 | |
| Man OM-IP 16eight | |||||
| AUD | Dec 05 | 30 Jun 11 | $1.0449 | $1.3355 | |
| Man OM-IP Eclipse | |||||
| AUD | Aug 06 | 30 Jun 11 | $1.1210 | $1.3637 | |
| Man OM-IP 2Eclipse | |||||
| AUD | Apr 07 | 30 Jun 11 | $1.0771 | $1.2252 | |
| Man OM-IP 3Eclipse | |||||
| AUD | Apr 08 | 30 Jun 11 | $1.0554 | $0.9762 | |
| Man OM-IP Eclipse 2010 | |||||
| AUD | Apr 10 | 30 Jun 11 | $1.0000 | $1.0075 | |
| Man OM-IP Vision | |||||
| AUD | Aug 07 | 30 Jun 11 | $1.0000 | $0.9654 | |
| Man OM-IP Essential | |||||
| AUD | Aug 08 | 30 Jun 11 | $1.0290 | $1.0641 | |
| Man OM-IP AHL | |||||
| AUD | Apr 09 | 30 Jun 11 | $1.0000 | $0.9993 | |
| Man OM-IP 2AHL | |||||
| AUD | Jul 09 | 30 Jun 11 | $1.0000 | $0.9950 | |
| Man OM-IP 3AHL | |||||
| AUD | Dec 09 | 30 Jun 11 | $1.0000 | $1.0409 | |
| Man OM-IP AHL 2010 | |||||
| AUD | Aug 10 | 30 Jun 11 | $1.0000 | $0.9383 | |
| Man OM-IP Global | |||||
| AUD | May 11 | 30 Jun 11 | $1.0000 | $0.9557 | |
* Past performance is not a reliable indicator of future performance. Performance figures are calculated net of all fees as at the valuation dates shown for each fund.
+ The Capital Guarantee and Rising Guarantee applies to shares held on the maturity date and are subject to the terms of the guarantee for each fund.
** Subject to availability and applicable regulatory jurisdictions, including selling restrictions, there is an opportunity to purchase existing Shares.
Note: Man Series 5 OM-IP 220 matured on 30 June 2009.
Man OM-IP 15seven - Opportunity to continue an investment
Shares in Man OM-IP 15seven are due to mature on 30 September 2011 and Shareholders are provided with an opportunity to continue their investment.
Grant Beasley discusses the opportunity
available to Shareholders.
An investment in the fund will not automatically continue. Shareholders have been sent Election Notices. Completed Election Notices should be returned to Man Investments Australia by Wednesday, 17 August 2011.
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PO Box 3218 North Parramatta NSW 2151 Australia |
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PO Box 91997 Victoria Street West Auckland 1142 New Zealand |
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Level 21, Grosvenor Place 225 George Street Sydney NSW 2000 Australia |
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| Fax |
Australia and international fax (61-2) 9252 4453 New Zealand fax 0800 787 220 |
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scan and email signed Election Notice to 15seven@maninvestments.com.au |
For more information on continuing an investment in Man OM-IP 15seven, please contact us.
There is also an opportunity to purchase existing Shares**. For more information, please contact us.
** Subject to availability and applicable regulatory restrictions, including selling restrictions.
The information in this report has been prepared without taking into account anyone’s objectives, financial situation or needs so before acting on it, consider its appropriateness to your circumstances and seek advice from a licensed financial advisor.
Terms capitalised and used in this report have the same meaning as in the Explanatory Memorandum. No money is currently being sought and no applications for continuing investments will be accepted or money received unless the Shareholder has received the Explanatory Memorandum. It is intended that the offer to Shareholders in New Zealand will be made under the Securities (Mutual Recognition of Securities Offerings Regime – Australia) Regulations 2008, subject to meeting the requirements of those regulations.
Man Series 7 OM-IP 220 - Opportunity to continue an investment
Shares in Man Series 7 OM-IP 220 are due to mature on 31 December 2011. For a limited time only, an investment in Man Series 7 OM-IP 220 can be extended.
Shareholders who elect to continue their investment will:
- Continue to access an investment that aims to generate medium to long term capital growth*;
- Receive the security of the New Westpac Guarantee†; and
- Maintain access to monthly liquidity**.
An Election Notice Pack outlining the options available to Shareholders and what Shareholders need to do will be sent out in early September 2011.
For further information, please contact your licensed financial advisor or Man Investments Australia.
* The aim to generate medium to long term capital growth is based on the past performance of Man Series 7 OM-IP 220. Past performance is not a reliable indicator of future performance.
† Subject to the terms of the New Westpac Guarantee set out in the Explanatory Memorandum.
** Subject to the terms and conditions set out in the Explanatory Memorandum.
The information in this report has been prepared without taking into account anyone’s objectives, financial situation or needs so before acting on it, consider its appropriateness to your circumstances and seek advice from a licensed financial advisor.
No money is currently being sought and no applications for continuing investments will be accepted or money received unless the Shareholder has received the Explanatory Memorandum. It is intended that the offer to Shareholders in New Zealand will be made under the Securities (Mutual Recognition of Securities Offerings Regime – Australia) Regulations 2008, subject to meeting the requirements of those regulations.
Man OM-IP Stratum - Maturity approaching
Man OM-IP Stratum is due to mature on the Maturity Date, 31 December 2011. Shareholders have the following options available:
- Allow for all their Shares to mature on 31 December 2011.
- Sell some or all of their Shares to Man Investments Australia before the Maturity Date. If Shareholders choose this option, Shareholders may be able to reinvest sale proceeds in another fund sponsored by Man Investments Australia*.
You should talk to your licensed financial advisor before making an investment decision.
Man Investments Australia will be approaching Shareholders in the coming weeks with further details about each of these options.
For further information, please contact your licensed financial advisor or Man Investments Australia.
* If you choose to sell some or all of your Shares before 31 December 2011, you must notify Man Investments Australia of your intention to do so by no later than 15 November 2011.
Three points to consider before investing in an emerging markets fund
Diversifying with emerging markets
An allocation to emerging markets has the potential to improve the risk/reward balance of an investment portfolio. This is because investing in emerging markets is likely to add a broader range of geographies, industries and return drivers to a portfolio that has previously focused exclusively on developed countries.
With around 40 funds focusing on emerging markets available in Australia, the market has recognised the potential of emerging markets. But given the number of different emerging markets funds, how can they be distinguished from one another? Some factors to consider include:
- What is the asset allocation of the emerging markets fund?
- What is the investment strategy?
- How experienced is the team?
1. What is the asset allocation of the emerging markets fund?
The term 'emerging markets' is a broad one. Therefore, it is important to ascertain what the fund actually has exposure to. For example, if the fund focuses largely on China, an investor may already have exposure to these markets through other investments such as Australian mining stocks. If this is the case, then the benefits of diversifying into emerging markets are diminished. It would also mean that the investor is missing out on other emerging market opportunities available in South America or Eastern Europe.
Geographical diversification is also important because of the structural and macro-economic differences at a regional and country level. For example, Brazil and Russia are much more dependent on the energy cycle than India and China. Therefore a fund with an allocation to Brazil, Russia, India and China (the BRIC economies) may offer better protection against energy shocks than a fund with an allocation to Brazil and Russia only.
2. What is the investment strategy?
There are many different approaches to investing in emerging markets. Some funds have a passive approach and merely aim to replicate an index. These tend to be low cost; however, generate an index-like return. These funds tend to be fairly volatile as they follow the ups and downs of emerging markets. In the four years leading up to 2008, the MSCI Emerging Markets (Total Return) Index produced 34.6%, 34.0%, 32.2% and 39.4%. However, these strong returns were followed by a large fall of -53.3% in 2008. This return profile gives an indication of the volatility inherent in emerging markets.
Another approach is an actively managed long only fund. These funds have reference to an index, but also use the fund manager's skill in selecting assets that are believed to be undervalued. If successful, such a fund will outperform the relevant index.
A third option is a long/short emerging markets fund. These funds aim to generate absolute returns, generating profits regardless of market direction - they are 'market neutral'. Given they are actively managed and take both long and short positions, these funds aim to produce emerging market returns while managing the volatility associated with emerging markets.
Finally, when assessing the investment strategy, consider the asset classes the fund participates in. For example, an index-tracking fund will generally only invest in equities. By only investing in equities the investor misses out on the opportunities also available in emerging market currencies, credit, fixed income and their derivatives.
3. How experienced is the team?
Emerging markets tend to have less analyst coverage than developed markets. This kind of market inefficiency means traders have an opportunity to generate greater returns than in mature markets. The fact that emerging markets tend to be opaque and idiosyncratic means traders need to have experience in the relevant emerging market. They also need strong local contacts to successfully explore the opportunities.
When assessing an emerging markets fund, it is therefore important to find out about the portfolio managers and trading team. How big is the team? How long have they been together? Have they traded through crisis periods? Do they travel to the countries relevant to the markets they trade in? Do they have good local contacts/presence?
Participation through emerging markets funds
Investing in emerging market funds offer investors the chance to participate in the opportunities available in emerging markets. Such funds may have different approaches in asset allocation and investment strategy and varying degrees of experience in the investment management team. A savvy investor will consider these factors before investing in emerging markets.
The long and long/short of it: Long only vs absolute return investment strategies
Long only approach – riding the waves
The traditional approach to investing is to purchase assets such as stocks, bonds and property in the hope that they will rise in value. This investment strategy is commonly referred to as a 'long only' approach to investing.
This is a popular way to invest money but it is particularly sensitive to market movements. When the market goes up, investors make money. Conversely when the market goes down, investors may lose money. As long as the investor stays in the market, such profits and losses may only be on paper and not realised.
Alternative investment strategies – helping to diversify
Alternative investments can offer investors the opportunity to reduce their sensitivity to market ups and downs, and to better diversify their investment portfolios. In doing so, they can help reduce portfolio risk and stabilise returns.
This is largely because alternative investment managers:
- invest in a broad range of asset classes,
- use dynamic and flexible investment techniques (not just 'long only'), and
- seek absolute returns - returns that are not relative to a market index.
Demonstrating the benefits of adding an allocation to alternative investments using a hypothetical investment portfolio
A long only approach is familiar, intuitive, usually liquid and may secure good returns, especially when markets are moving strongly upwards. The chart below shows how such an investment approach can be balanced and enhanced with an allocation to alternative investments to help provide portfolio diversification.
