Malaysia-based asset manager Affin Hwang Asset Management Berhad has launched an Asian equity-focused UCITS fund reported Citywire Global Asia this week. The Affin Hwang Capital Asian Series is domiciled in Luxembourg and initially consists of two sub-funds: Select Asia Opportunity Fund and Select Asia Quantum Fund.
According to Esther Thye, the firm’s chief strategy officer, Affin Hwang Asset Management becomes the first Malaysian asset management firm to establish a Lux-domiciled UCITS fund. BNP Paribas Securities Services has been appointed as administrator, transfer agent and domiciliary agent as well as custodian to the fund structure.
Invesco PowerShares this week announced the launch of the European PowerShares Global Buyback Achievers UCITS ETF and its listing on the London Stock Exchange.
The new ETF invests in companies that have bought back at least 5 per cent of their own shares in the previous twelve months, reducing the number of shares outstanding. The PowerShares Global Buyback Achievers UCITS ETF is the first and only ETF which will be available in Europe.
The ETF tracks via full physical replication the NASDAQ Global Buyback Achievers Net Total Return Index, which is comprised of securities from the NASDAQ US Buyback Achievers™ Index and the NASDAQ International BuyBack Achievers™ Index.
Initiating a buyback program, one of two options for returning value to shareholders, often results in higher price/sales, price/earnings and price/cash flow ratios for the stock. A buyback program can trigger higher share prices and as a consequence increase the stock’s performance. In 2013, S&P 500 constituent companies spent USD476bn on buybacks.
Currently, Invesco PowerShares manages USD2.9bn globally in ETFs tracking buyback strategies.
Bryon Lake, Head of Invesco PowerShares, EMEA, commented: “This new product offers an innovative yet simple factor-based way to invest in global equities. Through the underlying index, the PowerShares Global Buyback Achievers UCITS ETF provides access to a “smart beta” approach to investing in companies that return value by buying back shares. Buybacks can be more tax efficient than dividends, and this new ETF offers a low-cost, transparent and liquid vehicle through which to access this strategy.”
October proved a challenging month for alternative UCITS funds. According to Alix Capital, the UAI Global Index ended the month down -0.39 per cent. Only two strategies delivered positive returns for the period: Emerging Markets and Equity Market Neutral, up 0.49 per cent and 0.24 per cent respectively. On the negative side the two worst performing strategies were Event-Driven and Commodities, down -1.94 per cent and -1.63 per cent.
CTA and Fixed Income are the best performing funds on average since the beginning of the year with gains of 4.40 per cent and 1.30 per cent while Commodities and Even-Driven have recorded the lowest returns with -2.83 per cent and -2.71 per cent. With -1.25 per cent, October was particularly difficult for funds of funds. Taking into account the October drawdown their performance since the beginning of the year now stands at -0.92 per cent.
London-based Newsmith LLP is preparing to launch a UCITS version of its European long/short fund in November to open the strategy up to UK and European investors reported Portfolio Adviser this week. The Newsmith European Fund will be managed Jean Maigrot, who will focus on large-cap European stocks in the strategy. According to Matthew Wright, head of UK and European distribution at Newsmith, the fund already has USD35mn in seed capital for the Dublin-based vehicle.
The UCITS fund will follow the same strategy that Maigrot runs in the existing Cayman fund, which has returned 29 per cent since its inception in 2007 with an annualized volatility of 4.3 per cent. Maigrot says that he does not look to use excess leverage to generate absolute positive returns, noting that since running the strategy he has never had more than 140 per cent gross exposure. “I would much rather, in periods of volatility, reduce my gross with a view to increasing it when the market is less volatile,” Maigrot was quoted as saying
