May 2015 Global Absolute Return Strategies Fund 31 May 2015 The fund aims to provide positive investment returns in all market conditions over the medium to long term. The fund is actively managed, with a wide investment remit to target a level of return over rolling three-year periods equivalent to cash plus five per-cent a year, gross of fees. It exploits market inefficiencies through active allocation to a diverse range of market positions. The fund uses a combination of traditional assets (such as equities and bonds) and investment strategies based on advanced derivative techniques, resulting in a highly diversified portfolio. The fund can take long and short positions in markets, securities and groups of securities through derivative contracts. The value of investments within the fund can fall as well as rise and is not guaranteed - you may get back less than you pay in. The fund may use derivatives for the purpose of efficient portfolio management and to meet its investment objective. The value of overseas assets held in the fund may rise and fall as a result of exchange rate fluctuations. Fund Manager Shareclass Launch Date Current Fund Size* Shareclass Base Currency Multi Asset Investing Team 14 Jun 2011 Benchmark** SICAV Fund Absolute Return Fund Monthly 6 Month EURIBOR £9,134.0m GBP (hedged) EUR * Fund size calculated using the base currency in Euros converted into Sterling using the FX rate of 1:0.72 on 31/05/2015. ** This is the Fund benchmark. Where shareclasses are available in a different currency to the Fund's base currency, an alternative benchmark will be referenced for performance comparison purposes. For example, for a USD-hedged shareclass, performance will be referenced against a USD-hedged version of the Fund benchmark or a local currency (equivalent) index. This document is intended for use by individuals who are familiar with investment terminology. Please contact your financial adviser if you need an explanation of the terms used. Please note that the Portfolio Risk and Return Analysis table is only updated on a quarterly basis. For a full explanation of specific risks and the overall risk profile of this fund and the shareclasses within it, please refer to the Key Investor Information Documents and Prospectus which are available on our website – www.standardlifeinvestments.com Fund Information * Quarterly Portfolio Risk and Return Analysis Strategy Market Returns European equity Strategies Global equity miners Global equity High yield credit Chinese equity US equity EU corporate bonds UK corporate bonds FX hedging UK equity Global equity oil majors Directional Short US duration Strategies Long USD v EUR Long MXN v AUD Long INR v EUR Long USD v CAD Mexican rates v EUR Australian forward-start interest rates Brazilian government bonds Long European payer swaptions Long USD v JPY Long equity variance Short UK real yields Relative Value US equity tech v small cap Strategies US butterfly European equity banks Japanese v Korean equity German v French equity European v US and Japanese duration Asian v S&P variance HSCEI v FTSE variance Global miners v Swiss equity Cash Cash Residual Stock selection Total Diversification Expected Volatility Stand-alone Risk Exposure % 1.0 0.6 0.3 0.3 0.2 0.2 0.1 0.1 0.1 0.0 Closed 0.9 0.7 0.6 0.6 0.5 0.5 0.4 0.3 0.3 0.2 Closed Closed Weighting (risk based %) 7.9 4.9 2.5 2.5 1.8 1.2 1.0 0.9 0.7 0.1 7.3 5.7 5.1 4.4 4.1 3.7 3.1 2.6 2.2 1.7 1.0 0.7 0.6 0.6 0.5 0.4 0.2 0.2 Closed 8.0 5.5 5.1 4.4 3.9 3.2 1.7 1.7 0.0 0.4 12.5 8.8 3.7 0.0 3.1 Contribution to Returns % Q1 1.1 -0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.6 1.2 0.3 0.7 1.3 0.3 0.3 0.2 0.0 0.1 -0.1 -0.1 -0.2 -0.1 -0.1 0.1 0.2 0.0 -0.1 -0.1 0.2 0.1 0.0 0.0 4.9 1 Yr 1.1 -0.1 0.7 0.3 0.1 0.3 0.3 0.0 -0.1 0.1 -0.1 -1.6 2.5 0.3 1.1 1.9 0.7 1.5 0.2 0.0 0.9 -0.4 -0.9 1.1 -0.1 -0.4 0.9 0.3 0.6 -0.2 -0.1 -0.6 0.2 -0.3 -0.1 Individual strategy contributions are based on gross returns. The attribution of returns to individual strategies is performed on a best endeavours basis and uses market data at the close of business at the end of each period. This data is typically unavailable at the time unit prices are struck resulting in minor differences between unit price performance and this attribution. Such differences do not accumulate so cancel out over time. Fund Performance * Price Indexed 135 Performance has been calculated over the stated period on the share price performance basis, based on the institutional shareclass and net of fees. For your relevant charges please contact your Standard Life Investments Sales Representative. 130 125 120 Source: Standard Life Investments (Fund) and Thomson Datastream (Benchmark) 115 110 105 100 Global Absolute Return Strategies May-15 Nov-14 May-14 Nov-13 May-13 Nov-12 May-12 Nov-11 95 6 Month GBP LIBOR Cumulative Performance Source: Standard Life Investments (Fund) and Thomson Datastream (Benchmark) YTD (%) 1 month (%) 3 months (%) 6 months (%) 1 year (%) Retail Fund Performance 4.6 0.8 0.5 4.3 8.6 Institutional Fund Performance 4.9 0.9 0.7 4.7 9.5 6 Month GBP LIBOR 0.3 0.1 0.2 0.3 0.7 3 years (%) Since launch (%) Retail Fund Performance 20.7 28.5 Institutional Fund Performance 23.4 32.5 2.2 3.5 6 Month GBP LIBOR Note: Past Performance is not a guide to future performance. The price of shares and the income from them may go down as well as up and cannot be guaranteed; an investor may receive back less than their original investment. For full details of the fund's objective, policy, investment and borrowing powers and details of the risks investors need to be aware of, please refer to the prospectus. Monthly Investment Review and Outlook Market review Activity Global equities moved modestly higher in May. However, markets were fairly volatile and performance was mixed at a regional level, with developed markets outperforming emerging markets. In May, we closed our European versus US and Japanese duration strategy. Back in February, when German bund yields crossed Japanese JGB yields, we reviewed the position and decided to retain it, a move which proved rewarding. However, we now believe it is prudent to close the strategy, given the valuation and scale of performance it has delivered. The US S&P 500 Index reached a new record high, buoyed by favourable corporate results and receding expectations of an imminent rate hike. Elsewhere, UK stocks benefited from the Conservative Party’s surprise election win, while Japan made solid gains on better-than-expected growth figures. Progress in Europe was hampered by lingering uncertainty over Greece, as agreement between Athens and its creditors remained elusive. Government bonds again underperformed equities and yields rose. Credit also posted negative returns, with high yield issues faring better than investment grade. Spreads were little changed over the month. Global economic data were mixed. In Europe, for instance, Spain and Italy reported solid first-quarter growth, while German business confidence registered a sharp month-on-month decline in May. Eurozone consumer confidence also worsened for the second consecutive month in May. In Japan, meanwhile, the economy grew between January and March for the second straight quarter, exceeding market expectations. In currency markets, the US dollar rallied from its mid-May low. Commodity prices again weakened. Performance The Global Absolute Return Strategies Fund returned 0.79% during the month (net of retail fees), compared to the benchmark 6-month GBP LIBOR return of 0.06%. After a month of relative weakness in April, the US dollar regained positive momentum in May, bolstered by firmer economic data. This was positive for our long US dollar currency pairs, particularly the US dollar versus Canadian dollar position. Also among the top performers was our long Mexican peso versus Australian dollar strategy. This was due largely to weakness in the Australian dollar which, after reaching its highest point since January, eventually responded to a cut in interest rates and started to fall. Exacerbated by poor economic data and weakness in commodityrelated currencies, this trend persisted into month-end. Quantitative easing by the European Central Bank has driven down European sovereign yields in recent months. However, yields in both the US and Europe moved sharply higher in May, as investors reassessed the inflation and growth outlooks for these regions, amid signs their respective economies were improving. This was supportive of our short US duration strategy, which benefits from higher rates in the US. Also positive was our exposure to Brazilian government bonds. The market is moving on from the Petrobras scandal, focusing instead on the sound fiscal policies being pursued by the government and the anchoring of inflation expectations. Elsewhere, the notable strength of Japanese equities benefited our exposure here, and this position ranked among the best contributors. The main performance detractors included our global equity miners position. These stocks struggled as commodity prices such as copper slipped lower in May. Outlook Our central expectation is still for modest global growth, albeit with regional variations. A growing divergence in central bank monetary policy will remain an important driver of asset returns. On the one hand, the US appears to be nearing a tighter monetary regime, whereas economies like Europe and Japan continue on a looser monetary path. Geopolitical tensions remain high and on many metrics asset prices appear expensive. We seek to exploit the opportunities that these conditions present by implementing a diversified range of strategies using multiple asset classes. Other Fund Information Retail Acc SLGLHAG LX LU0621233898 A1H99Y Bloomberg ISIN WKN Domicile Custodian Name Auditor Name Retail Dist - Institutional Acc SLGLHDG LX LU0621233971 A1H99Z Institutional Dist - Luxembourg The Bank of New York Mellon (Luxembourg) S.A., 2-4 Rue Eugene Ruppert, L-2453 Luxembourg, Grand Duchy of Luxembourg PricewaterhouseCoopers S.à r.l., Reviseur d'entreprises 400, route d'Esch, L-1014 Luxembourg, Grand Duchy of Luxembourg Reporting Dates Interim 30 Jun Annual 31 Dec Settlement Time Email Telephone Share Price Calculation Time Dealing Cut Off Time T+4 [email protected] +352 24 525 716 15:00 (Luxembourg time) 13:00 (Luxembourg time) Currency GBP GBP GBP *Any data contained herein which is attributed to a third party ("Third Party Data") is the property of (a) third party supplier(s) (the “Owner”) and is licensed for use by Standard Life**. Third Party Data may not be copied or distributed. Third Party Data is provided “as is” and is not warranted to be accurate, complete or timely. To the extent permitted by applicable law, none of the Owner, Standard Life** or any other third party (including any third party involved in providing and/or compiling Third Party Data) shall have any liability for Third Party Data or for any use made of Third Party Data. Past performance is no guarantee of future results. Neither the Owner nor any other third party sponsors, endorses or promotes the fund or product to which Third Party Data relates. **Standard Life means the relevant member of the Standard Life group, being Standard Life plc together with its subsidiaries, subsidiary undertakings and associated companies (whether direct or indirect) from time to time. “FTSE®”, "FT-SE®", "Footsie®", [“FTSE4Good®” and “techMARK] are trade marks jointly owned by the London Stock Exchange Plc and The Financial Times Limited and are used by FTSE International Limited (“FTSE”) under licence. [“All-World®”, “All- Share®” and “All-Small®” are trade marks of FTSE.] The Fund is not in any way sponsored, endorsed, sold or promoted by FTSE International Limited (“FTSE”), by the London Stock Exchange Plc (the “Exchange”), Euronext N.V. (“Euronext”), The Financial Times Limited (“FT”), European Public Real Estate Association (“EPRA”) or the National Association of Real Estate Investment Trusts (“NAREIT”) (together the “Licensor Parties”) and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE EPRA NAREIT Developed Index (the “Index”) and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTSE. However, none of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “FTSE®” is a trade mark of the Exchange and the FT, “NAREIT®” is a trade mark of the National Association of Real Estate Investment Trusts and “EPRA®” is a trade mark of EPRA and all are used by FTSE under licence.” Additional Information for Switzerland : The prospectus, the key investor information documents, the articles of incorporation, the annual and semiannual report in German, and further information can be obtained free of charge from the representative in Switzerland: Carnegie Fund Services S.A., 11, rue du Général-Dufour, CH-1204 Geneva, Switzerland, web: www.carnegie-fund-services.ch. The Swiss paying agent is: Banque Cantonale de Genève, 17, quai de l’Ile, CH-1204 Geneva. The last share prices can be found on www.fundinfo.com. To find out more about our fund range, visit our website or alternatively speak to your usual contact at Standard Life Investments. www.standardlifeinvestments.com Standard Life Investments Limited is registered in Scotland (SC123321) at 1 George Street, Edinburgh EH2 2LL. Standard Life Investments Limited is authorised and regulated by the Financial Conduct Authority. Standard Life Investments Global SICAV is an umbrella type investment company with variable capital registered in Luxembourg (no. B78797) at 2-4, rue Eugéne Ruppert, L-2453 Luxembourg, Grand Duchy of Luxembourg. Calls may be monitored and/or recorded to protect both you and us and help with our training. www.standardlifeinvestments.com © 2015 Standard Life 201506101002 INVRT661 0515 SZVZ_GBP
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