March 2011

Performance update

The Man OM-IP funds retraced by an average of -4.9%^ for the March quarter.

A series of unexpected events, such as the earthquake/tsunami in Japan, the political unrest in the Middle East and North Africa, and the floods in Queensland and Victoria, disrupted many trends and affected performance during the quarter.

Sam Yates discusses some of the key themes of the March quarter.

 

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

January 2011 to March 2011

Currencies
  • Short EUR, GBP and USD positions detracted from performance
  • The sell off in emerging market and commodity-linked currencies (eg. AUD) in March caused losses
Interest rates
  • A small, negative contribution this quarter
Bonds
  • The quarter’s macro-economic events impacted positions in bonds
  • Short positions in Australian bonds suffered following the floods in Queensland and Victoria
  • The demand for "safe haven" bonds following the events in the Middle East affected short positions in Australian, Japanese, US and UK bonds
Energies
  • Short positions in natural gas produced profits in February, but these were offset by losses in March following a surge in the price of natural gas
  • In March, long crude oil positions gained following the Middle East unrest
Metals
  • Long positions in gold, nickel and copper all generated gains
  • Long positions in silver also generated gains, as the price of silver rose 20.8% in February
Stocks
  • Losses were incurred by the sharp sell-off in global equities following the events in Japan
Agriculturals
  • Increases in the price of cotton and coffee benefited long position in these commodities
  • Long positions in other agricultural commodities produced gains in February but fell back in March due to generic risk reduction and liquidity themes
Credit
  • A small, positive contribution this quarter
Source Man Investments.
Note Past performance is not a reliable indicator of future performance. Performance figures are calculated net of all fees as at 31 March 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 31 March 2011

Source Man Investments Australia Limited.
Note Performance figures are calculated net of all fees as at 31 March 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 31 Mar 11 $4.5987 $5.6101
Man Series 2 OM-IP 220
  AUD Jan 98 31 Mar 11 $4.3027 $4.8670
Man Series 3 OM-IP 220
  AUD Jul 98 31 Mar 11 $3.6965 $4.0399
Man Series 4 OM-IP 220
  AUD Jun 00 31 Mar 11 $3.1606 $3.0274
Man Series 6 OM-IP 220
  AUD Jun 01 31 Mar 11 $2.4016 $2.2483
Man Series 7 OM-IP 220
  AUD Jun 02 31 Mar 11 $1.3901 $2.0757
Man Series 8 OM-IP 220
  AUD Nov 02 31 Mar 11 $1.4330 $1.8968
Man Series 9 OM-IP 220
  AUD Oct 03 31 Mar 11 $1.1810 $1.5367
Man Series 10 OM-IP 220
  AUD May 05 31 Mar 11 $1.2155 $1.5537
Man Series 11 OM-IP 220
  AUD Apr 06 31 Mar 11 $1.0105 $1.1690
Man Series 12 OM-IP 220
  AUD Dec 07 31 Mar 11 $1.0000 $0.9996
Man OM-IP 220 2008
  AUD Dec 08 31 Mar 11 $1.0000 $0.9452
Man OM-IP 320 Diversified
  AUD Dec 98 31 Mar 11 $2.0824 $1.6518
Man OM-IP Strategic
  AUD Aug 99 31 Mar 11 $2.6834 $2.1567
Man OM-IP Strategic Series 2
  AUD Dec 99 31 Mar 11 $2.1429 $2.0295
Man OM-IP Hedge Plus
  AUD Jan 02 31 Mar 11 $1.2221 $1.3688
Man OM-IP 130 Plus
  AUD Jul 03 31 Mar 11 $1.5028 $1.4870
Man OM-IP 140 Plus
  NZD Aug 03 31 Mar 11 $1.6060 $1.6075
Man OM-IP 140 Plus (AUD)
  AUD Jun 04 31 Mar 11 $1.5879 $1.5182
Man OM-IP 150 Plus (NZD)
  NZD Jun 04 31 Mar 11 $1.7016 $1.6641
Man Series 2 OM-IP 150 Plus (NZD)
  NZD Aug 05 31 Mar 11 $1.5000 $1.3533
Man Series 2 OM-IP 140 Plus (AUD)
  AUD Aug 05 31 Mar 11 $1.4000 $1.1813
Man OM-IP MultiStrategy
  AUD Jan 04 31 Mar 11 $1.0661 $1.0243
Man OM-IP 15seven
  AUD Oct 04 31 Mar 11 $1.1347 $1.7099
Man Series 2 OM-IP 15seven
  AUD Dec 06 31 Mar 11 $1.0181 $1.2271
Man OM-IP Stratum
  AUD Dec 04 31 Mar 11 $1.0358 $1.2470
Man OM-IP 16eight
  AUD Dec 05 31 Mar 11 $1.0449 $1.3782
Man OM-IP Eclipse
  AUD Aug 06 31 Mar 11 $1.1210 $1.4065
Man OM-IP 2Eclipse
  AUD Apr 07 31 Mar 11 $1.0771 $1.2646
Man OM-IP 3Eclipse
  AUD Apr 08 31 Mar 11 $1.0554 $0.9905
Man OM-IP Eclipse 2010
  AUD Apr 10 31 Mar 11 $1.0000 $1.0431
Man OM-IP Vision
  AUD Aug 07 31 Mar 11 $1.0000 $0.9906
Man OM-IP Essential
  AUD Aug 08 31 Mar 11 $1.0290 $1.0957
Man OM-IP AHL
  AUD Apr 09 31 Mar 11 $1.0000 $1.0183
Man OM-IP 2AHL
  AUD Jul 09 31 Mar 11 $1.0000 $1.0142
Man OM-IP 3AHL
  AUD Dec 09 31 Mar 11 $1.0000 $1.0609
Man OM-IP AHL 2010
  AUD Aug 10 31 Mar 11 $1.0000 $0.9587
* 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.
Note: Man Series 5 OM-IP 220 matured on 30 June 2009.

The emergence of emerging markets

Until recently, investing in emerging markets was the preserve of adventurous investors who could afford to stomach the volatility historically associated with these markets.

Investors today, however, have the option of investing in balanced emerging market funds. In these funds, the diversification of geography, asset classes and financial instruments seek to insulate investors from the highs and lows of investing in a single emerging market.

Transition of power

Leading authorities, such as the World Bank and the International Monetary Fund, have suggested that we will see a huge transition in global power over the next 50 years or so. For example, the largest European economies are unlikely to feature among the world's top six superpowers by 2050, having been replaced by nations that are currently considered to be 'emerging'.

emerging markets

 

This shift in global prosperity should generate many opportunities for specialised, emerging market funds to capture.

Becoming more investor friendly

As countries such as Brazil, Russia, India and China (the BRIC economies) continue to make the transition to global powerhouses, their historical shortcomings – such as the lack of economic, political, regulatory and currency stability – are receding. Consequently, the leading emerging nations should continue to become more 'investor friendly' in the years ahead.

Importance of diversification

Diversification in emerging market funds is vital, as these markets are prone to swings in sentiment. This is especially true during times of market turmoil. A balanced, emerging markets portfolio usually includes emerging equities as well as emerging market bonds and currencies to help smooth the volatility traditionally associated with emerging equities.

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. A fund with an allocation to all four BRICs may therefore have better protection against energy shocks than a fund with an allocation to Brazil and Russia only.

Enhancing portfolios with emerging markets

An allocation to emerging markets has the ability to improve the risk/reward balance of traditional investment portfolios. This is because an emerging markets fund may add a broader range of geographies, industries and return drivers to a portfolio focusing exclusively on developed countries.

A multi-asset emerging markets fund that employs long and short positioning is likely to generate consistent investment returns. Ideally, the fund should provide dynamic investment coverage across asset classes and geographies, with an appropriate balance of long and short exposures.

Emerging market funds at GLG

Bart Turtelboom and Karim Abdel-Motaal are responsible for the range of emerging market funds at GLG. Watch an interview with Karim Abdel-Motaal below.

Karim Abdel-Motaal, portfolio manager at GLG, talks about the GLG Emerging Markets Fund.

 

Global macro delivered 13.4% p.a. since 1990, but what is it?

The global macro strategy, as represented by the HFRI Macro Index, has demonstrated a consistent and persistent return stream since 1990. From January 1990 to March 2011, the HFRI Macro Index had a compound annual return of 13.4% p.a.#. It outperformed Asian and global stock market indices and had a lower volatility during this period.

HFRI Macro Index vs Asian and global stock market indices

January 1990 to March 2011

Since inception HFRI Macro Index MSCI World (Total Reutrn) Index MSCI Asia Pacific (Total Return) Index
Compound annual return 13.4% p.a. 6.4% p.a. 1.6% p.a.
Volatility 7.7% 15.6% 20.9%
Source Bloomberg.
Note Past performance is not a reliable indicator of future performance. Please note that the HFRI data over the past 4 months might change.

Global macro: a flexible strategy for investing in world markets

Global macro traders base investment decisions on their understanding of the economic, social and political situations in a particular jurisdiction, country or region. They invest and trade in equities, indices, currencies, commodities and interest rates based on their view of the world.

Because of the unpredictable nature of world events, global macro traders usually focus on risk. They often hedge their positions to help protect their investments.

For a more in depth look at the global macro strategy, read our report: The case for global macro.

Why global macro funds need liquidity

Risk management is one major factor global macro traders have to consider. Another is liquidity. The global macro approach is opportunistic and nimble. It uses highly liquid instruments to rapidly change positions as new opportunities are identified.

Because the world can change so quickly, traders need to be able to exit positions judiciously. And, as such, global macro funds generally aim to have a portfolio of liquid investments.

Global macro funds at GLG

Driss Ben-Brahim and Jamil Baz are responsible for the global macro funds at GLG. An article written by Jamil, Gambling for resurrection?, is available here.

For more information on GLG, please click here.

# Past performance is not a reliable indicator of future performance.

If you are having difficulty viewing these Terms and conditions of use, please click here.

Terms and conditions of use

Please read this page before proceeding. It is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction.

  1. Legal disclaimer

    The information on the Man Investments Australia Limited ("MIAL") website:

    • should not be distributed to any third party in whole or in part without the prior written consent of MIAL; and
    • has been obtained from sources believed to be accurate and MIAL does not give any representation or warranty as its reliability, accuracy or completeness.
  2. General advice

    The web site contains general information and does not purport to take into account any investor's particular financial circumstances. Man Investments Australia recommends that all potential investors seek independent financial, taxation and legal advice. To the maximum extent permitted by law, Man Investments Australia disclaims liability for any errors or omissions whether caused by the negligence of Man Investments Australia or otherwise. Man Investments Australia does not accept any legal responsibility for material published on third party linked sites. Past performance is not a reliable indicator of future performance.

  3. Description of website

    Access to and use of the maninvestments.com.au website (the "Site") and the materials found on it (the "Content"), including the investment products referred to on it (the "Investment Products") are subject to the following terms and conditions (these "Terms"). By clicking the confirmation at the bottom of these Terms, you signify that you have read, understood and accepted these Terms. MIAL may update, revise, delete or modify information on this Site without notice. Information should only be considered current as of the time of initial publication on this Site or as otherwise stated on this Site without regard to the date on which you may access the information.

  4. Restricted access

    This Site, the Content and the Investment Products are not directed at or intended for distribution to any person (or entity) who is a citizen or resident of (or located or established in) any jurisdiction where the use of the Site (or the purchase or sale of the Investment Products) would be contrary to applicable law or regulation or would subject Man to any additional registration or licensing requirement in such jurisdiction.

  5. No offer

    The Content is provided for information purposes only and does not constitute a solicitation or offer, or advice or recommendation, to buy or sell interests in any Investment Products, to effect any transactions, or to conclude any transaction of any kind whatsoever. Potential investors should read the terms and conditions in the relevant offering materials carefully before any investment decision is made.

  6. Monitoring by MIAL

    Your use of the services on this Site may be monitored by MIAL, and the resultant information may be used by MIAL or its affiliates for its internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory organisation.

  7. No warranties and exclusion of liability

    Whilst MIAL shall use reasonable efforts to obtain information from sources which we believe to be reliable, MIAL gives no warranty as to the accuracy, completeness or reliability of any information, opinions or forecasts contained on the Site, nor does it undertake to ensure that this Site will be available or accessible at all times. MIAL shall have no liability (whether in contract, tort or otherwise) for any direct, indirect, consequential or special losses or damages of any kind whatsoever arising from or in connection with the access to, use of or linking to other websites ("Linked Websites") from this Site or any reliance on any of the Content. MIAL is not responsible for the content of any Linked Websites and accordingly accepts no liability with respect thereto or for any reliance placed upon such Linked Websites. MIAL is not liable for persons or matters beyond its reasonable control (such as telephone and other communications networks, the internet or your internet service provider). These exclusions of liability do not apply to the extent that such exclusions are invalid or ineffective under any law or regulation applicable to MIAL.

  8. Investment Performance

    Potential investors should note that investments can involve significant risks and the value of an investment may go down as well as up. The Investment Products on this Site typically use alternative investment strategies and may invest in derivatives of any kind. The prices of futures, options and other instruments in which the products may invest may fall in value as rapidly as they may rise and it may not be possible to liquidate the positions in the relevant markets before a loss is sustained. Price fluctuations may be substantial because of leverage. No assurance can be given that the investment objective of any Investment Product will be achieved or that substantial losses will not be suffered. There is no guarantee of trading performance and past or projected performance is not necessarily a guide to future results. Movements in exchange rates between currencies may affect the value of an investment.

  9. No Reliance

    Nothing contained on this Site constitutes investment, legal, tax or other advice or a recommendation to purchase or sell any investment. You should not rely on any of the Content in making an investment or other decision but should obtain relevant and specific professional advice and read the terms and conditions contained in the relevant offering prospectus carefully before any investment decision is made.

  10. Material Interests

    Any one of MIAL or its affiliates or their directors, officers, employees, agents or representatives may have or have had an interest or holding, relationship or other arrangement with the Investment Products which may be material. Potential investors should refer to the applicable offering documents for any Investment Product and in particular, the potential conflicts of interest discussed therein.

  11. Financial Services Guide

    Click here to access a copy of MIAL's Financial Services Guide.

By clicking "I ACCEPT" below, you confirm that you have read and understood the Terms above and agree to be bound by them.

I AcceptI Do Not Accept