Since its inception on 6 May 2016, the RWC Asia Absolute Alpha Fund generated a return of 0.7 per cent for the month. The fund spent most of May with low net exposure while its manager, Garret Mallal assessed the macro outlook.
The fund was borne out of a conversion of the RWC Global Innovation Absolute Alpha Fund, as a new fund within the RWC UCITS umbrella and follows a similar strategy to the team’s existing Cayman-domiciled Asia long/short fund, also managed by Mallal. Mallal and his team employ a long/short pan-Asia approach using equities, as well as currencies and options in order to hedge and further enhance returns.
Mallal joined RWC in April 2015 as a portfolio manager within James Johnstone and John Malloy’s Emerging and Frontier Markets team, Johnstone and Malloy having previously been at Schroders and Barings respectively. The team currently manages over USD1.7bn in long-only and long/short emerging, frontier and Asia equity funds. Mallal has 10 years’ experience in investment management and research in the Asia Pacific region and was formerly a Managing Director at Everest Capital where he was responsible for an Asia long/short equity strategy.
Since launching at RWC on 30 April 2015 Mallal’s RWC Asia Opportunity Fund has produced cumulative performance of +15.2 per cent, versus the MSCI AC Asia Pacific Index’s return of -13.5 per cent. Year to date this fund has returned +9.7 per cent, compared to the Index’s performance of -1.2 per cent.2
Dan Mannix (pictured), CEO of RWC Partners, says: “It’s been an extraordinary period for our Emerging and Frontier Markets Team. Having launched half way through last year in the teeth of a period of extreme divestment from emerging markets the team have quickly established themselves, raising over USD1.7 billion since they launched.
“The team are all absolute return investors, although the core strategies in emerging markets and frontier are unconstrained long-only. Garret’s new UCITS fund takes advantage of the breadth and depth of the team’s primary stock research and he combines this with a dynamic long/short strategy that also uses currencies and options to offer investors a unique approach to investing in Asia.
“There continues to be significant demand for long/short funds in UCITS but there is a lack of available funds in Asia. We believe that the next wave of funds will start to incorporate strategies that take on the more complex regions where one is dealing with a number of currencies, central banks and local economies. These are clearly essential components of managing an absolute return approach in Asia.
“Since Garret launched the sister fund to Asia Absolute Alpha (the RWC Asia Opportunity Fund) it has made an absolute return of over 15 per cent. The nature of the approach is that the market won’t always offer the opportunities it has over the last 12 months but the flexibility allows it to make returns in a variety of market conditions.”