The Baring Asia Hedge Select Fund, launched in May 2003, has completed a three-year track record, returning 13.9% (annualised) since launch.
The fund, designed to be a more measured method of accessing and investing in Asian markets, including Japan, has produced 13.9% on an annual basis for investors since launch.
Barings stated that the fund 'was launched in 2003 in response to market demand from investors who were unhappy with long only investment strategies that exposed portfolios to excessive market volatility'.
'Many investors who had chosen the long only route had been disappointed in the 1990s with Asian returns and suffered 'big dipper' swings in performance and market timing frustrations," says Tom Maier, manager of the Baring Asia Hedge Select Fund. "Our fund was designed to provide better capital protection of our clients' portfolios rather than simply tracking a volatile and inappropriate market capitalisation weighted benchmark.'
The Baring Asia Hedge Select Fund has been constructed to protect the portfolio from harsh market corrections or from a bear market. Although Barings' long-term outlook for Asia remains positive, particularly with the emergence of China as the crucible of global manufacturing, the manager does warn against some increased short-term volatility in the markets.
'We are entering a more volatile period where a pure long only strategy in equities may not provide the portfolio protection available in a Fund of Hedge Funds," explains Maier. "This type of fund is able to take advantage of different investment styles, a broader range of asset classes, events, short investment opportunities, arbitrage and volatility.
'Monetary conditions in Asia may not be as favourable over the next three years as they have over the past three as major central banks are starting to draw off excess liquidity from markets which could lead to a higher cost of capital globally and investors demanding higher risk premia.'
Background note: Baring Asset Management is an international investment management firm covering developed and emerging market equity, fixed income and multi-asset portfolio management services offered to institutions, retail investors and private individuals. Worldwide clients include public and corporate pension plans, government agencies, financial institutions, charitable organisations, mutual funds and private individuals.
Baring Asset Management is part of the MassMutual Financial Group, a global, diversified financial services organization. Massachusetts Mutual Life Insurance Company (MassMutual) is one of the largest life insurance businesses in the USA.
The Baring Asia Hedge Select Fund is a share class of the Baring Hedge Select Fund Limited, which is an open-ended, multi-class exempted company incorporated with limited liability in the Cayman Islands. Managed by Baring International Investment Limited (Authorised and regulated by the Financial Services Authority).