FUNDS
24 May 2018 | SHARES | 33T
he return of market
ǀŽůĂƟůŝƚLJĂŶĚƚŚĞĞŶĚŽĨ
ůŽŽƐĞŵŽŶĞƚĂƌLJƉŽůŝĐLJŝŶ
ƉĂƌƚƐŽĨƚŚĞǁŽƌůĚŚĂƐůĞĚƐĞǀĞƌĂů
ŵĂƌŬĞƚĐŽŵŵĞŶƚĂƚŽƌƐƚŽƐƵŐŐĞƐƚ
ƚŚĂƚĂďƐŽůƵƚĞƌĞƚƵƌŶĨƵŶĚƐĐŽƵůĚ
ďĞĐŽŵĞŵŽƌĞŝŶƚĞƌĞƐƟŶŐŝĨ
ŵĂƌŬĞƚƐƐƚĂƌƚƚŽƉƵůůďĂĐŬ͘
ďƐŽůƵƚĞƌĞƚƵƌŶĨƵŶĚƐ
ĂƌĞĚĞƐŝŐŶĞĚƚŽƉƌŽǀŝĚĞĂ
ƉŽƐŝƟǀĞƌĞƚƵƌŶŽǀĞƌƌŽůůŝŶŐ
ϭϮͲŵŽŶƚŚƉĞƌŝŽĚƐŝŶall market
ĐŽŶĚŝƟŽŶƐ͕ĂůƚŚŽƵŐŚƚŚŝƐŝƐ
ŶĞǀĞƌŐƵĂƌĂŶƚĞĞĚ͘
tŝƚŚŝŶƚŚĞŽƉĞŶͲĞŶĚĞĚ
ĨƵŶĚƐ;K /ƐͬƵŶŝƚƚƌƵƐƚƐͿ
ƵŶŝǀĞƌƐĞ͕ĞdžĂŵƉůĞƐŽĨĂďƐŽůƵƚĞ
ƌĞƚƵƌŶĨƵŶĚƐŝŶĐůƵĚĞJPM
'ůŽďĂůDĂĐƌŽKƉƉŽƌƚƵŶŝƟĞƐ
(GB00B4WKYF80)͕^ĐŚƌŽĚĞƌ
h<LJŶĂŵŝĐďƐŽůƵƚĞZĞƚƵƌŶ
(GB00B3N53472)͕ϳ/DZĞĂů
ZĞƚƵƌŶ;'ϬϬϳρD^ςϭεͿ͕
dŚƌĞĂĚŶĞĞĚůĞh<ďƐŽůƵƚĞ
Alpha (GB00B8BX5538)ĂŶĚ
:ƵƉŝƚĞƌďƐŽůƵƚĞZĞƚƵƌŶ
;'ϬϬςYΘκdςϳͿ͘
ůƐŽŝŶƚŚŝƐƉĞĞƌŐƌŽƵƉŝƐ
ůĂĐŬZŽĐŬh<ďƐŽůƵƚĞůƉŚĂ
;'ϬϬρEYεεϬͿǁŚŝĐŚŚĂƐ
ĂĐŚŝĞǀĞĚĂŶŶƵĂůŝƐĞĚƌĞƚƵƌŶƐ
ŽĨϮ͘Ϯςй͕κ͘κϳйĂŶĚϭ͘Θϭй
ŽŶĂϭϬ͕ĮǀĞĂŶĚƚŚƌĞĞͲLJĞĂƌ
ďĂƐŝƐƌĞƐƉĞĐƟǀĞůLJ͕ĂĐĐŽƌĚŝŶŐ
ƚŽDŽƌŶŝŶŐƐƚĂƌ͘
ůƚŚŽƵŐŚƚŚŽƐĞůĞǀĞůƐŽĨ
ƌĞƚƵƌŶƐĂƌĞƐŝŐŶŝĮĐĂŶƚůLJůĞƐƐ
ƚŚĂŶƚŚĞďƌŽĂĚĞƌŵĂƌŬĞƚʹĂŶĚ
ŽƚŚĞƌĂďƐŽůƵƚĞƌĞƚƵƌŶĨƵŶĚƐ
ŚĂǀĞƉƌŽĚƵĐĞĚƐŝŵŝůĂƌůLJůŽǁ
ƌĞƚƵƌŶƐʹƚŚĞLJĐŽƵůĚƐƟůůĂƉƉĞĂůMany have lagged in the recent bull-run but will they shine if markets
start to fall?Will absolute return funds
become fashionable again?
ĂďƐŽůƵƚĞƌĞƚƵƌŶ͕ŵĂŶLJŚĂǀĞ
ĚŝīĞƌĞŶƚƌĞƚƵƌŶĂŵďŝƟŽŶƐĂŶĚ
ƌŝƐŬƚŽůĞƌĂŶĐĞ͛͘
,ĞƐĂLJƐĂŶLJŐŽŽĚĨƵŶĚ
ƐŚŽƵůĚƚĂŬĞĂĚǀĂŶƚĂŐĞŽĨƚŚĞŝƌ
ĚŝīĞƌĞŶƟĂƚĞĚĞdžƉĞƌƟƐĞ͚͘KƵƌƐŝƐ
ĂŐƌĞĂƚŚĞƌŝƚĂŐĞĂŶĚĂǁŽŶĚĞƌĨƵů
ĨƌĂŶĐŚŝƐĞŝŶŝŶǀĞƐƟŶŐŝŶh<
ĞƋƵŝƟĞƐ͕͛ĞŶƚŚƵƐĞƐƚŚĞůĂĐŬZŽĐŬ
ĨƵŶĚŵĂŶĂŐĞƌ͘
,ĞƉƌŝŵĂƌŝůLJƉƵƚƐŵŽŶĞLJƚŽ
ǁŽƌŬŝŶƚŚĞ&d^ ϭϬϬĂŶĚƚŽƉ
ĞŶĚŽĨƚŚĞ&d^ ϮρϬ͘dŽƉϭϬ
͚ůŽŶŐ͛ƉŽƐŝƟŽŶƐ;ĂƐĂƚϯϬƉƌŝůͿ
ŝŶĐůƵĚĞĚŐƌŽĐĞƌLJŐŝĂŶƚdĞƐĐŽ
(TSCO)͕ĐƌƵŝƐĞŽƉĞƌĂƚŽƌCarnival
(CCL)͕ŵĞĚŝĂďƵƐŝŶĞƐƐZ >y
;Z >ͿĂŶĚďĂŶŬŝŶŐďĞŚĞŵŽƚŚ
HSBC (HSBA)͘
zĞƚĂƐKƐďŽƌŶĞĞdžƉůĂŝŶƐ͚͗EŽƚ
ŽŶůLJĐĂŶǁĞƉƌŽĮƚĨƌŽŵƐŚĂƌĞƐ
ƚŚĂƚǁĞƚŚŝŶŬĂƌĞŐŽŝŶŐƚŽƌŝƐĞŝŶ
ǀĂůƵĞ͕ďƵƚǁĞĐĂŶĂůƐŽŐĞŶĞƌĂƚĞƚŽĂŵŽƌĞĐĂƵƟŽƵƐŝŶǀĞƐƚŽƌǁŚŽ
ǁĂŶƚƐƚŽĂǀŽŝĚĂůĂƌŐĞĐĂƉŝƚĂůůŽƐƐ
ŝŶƚŚĞĨƵƚƵƌĞ͘Z/^<s Z^h^Z tZ
ůĂĐŬZŽĐŬh<ďƐŽůƵƚĞůƉŚĂŝƐ
ĐŽͲŵĂŶĂŐĞĚďLJEŝĐŬKƐďŽƌŶĞ
ĂŶĚEŝŐĞůZŝĚŐĞǁŚŽƚĂƉŝŶƚŽ
ƐŝŐŶŝĮĐĂŶƚŝŶͲŚŽƵƐĞƌĞƐĞĂƌĐŚĂŶĚ
ƐƵƉƉŽƌƚĂƚůĂĐŬZŽĐŬ͘
͚tĞ͛ƌĞƚƌLJŝŶŐƚŽĚĞůŝǀĞƌƉŽƐŝƟǀĞ
ĂďƐŽůƵƚĞƌĞƚƵƌŶƐĂƚƐƵďƐƚĂŶƟĂůůLJ
ƌĞĚƵĐĞĚůĞǀĞůƐŽĨƌŝƐŬ͕͛ĞdžƉůĂŝŶƐ
KƐďŽƌŶĞ͚͘/ƚƚĂŬĞƐŽƵƚƚŚĞ
ĐŚĂůůĞŶŐĞƚŚĂƚŵĂŶLJŽĨŽƵƌĐůŝĞŶƚƐ
ĨĞĞůĂƌŽƵŶĚŵĂƌŬĞƚƟŵŝŶŐ͕ǁŚŝĐŚ
ĞǀŝĚĞŶĐĞƐƵŐŐĞƐƚƐŝƐŚĂƌĚ͛͘
KƐďŽƌŶĞƐĂLJƐƚŚĞĂďƐŽůƵƚĞ
ƌĞƚƵƌŶƵŶŝǀĞƌƐĞƐƚƌĂĚĚůĞƐŵĂŶLJ
ĚŝīĞƌĞŶƚĂƐƐĞƚĐůĂƐƐĞƐĂŶĚ
ŝŶƐŽŵĞŝŶƐƚĂŶĐĞƐĚŝīĞƌĞŶƚ
ŐĞŽŐƌĂƉŚŝĞƐ͚͘ůƚŚŽƵŐŚƚŚĞ
ĨƵŶĚƐĂůůĐĂůůƚŚĞŵƐĞůǀĞƐTesco is a key holding in BlackRock UK Absolute Alpha fund