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Russell Investments Hedged Global Shares Fund
Report and Update
31 March 2015
Fund Commentary
Investment Performance and Positions
The Russell Investments Hedged Global Shares Fund returned
0.34% for the month of March and 6.69% for the quarter,
outperforming its benchmark by 0.31% and 1.17%, respectively.
The following information provides the investment performance
and exposures within the underlying investment portfolio. Please
note that this information is indicative only and is provided for
general information purposes only.
The market favoured growth strategies relative to value strategies
for the first quarter of 2015. The Fund benefited from an
aggregate tilt away from high dividend yielding stocks. Other
notable contributors included an overweight to Europe and an
underweight to the energy sector. Stock selection was successful
within the materials, consumer discretionary and health care
sectors.
Underlying Manager Allocations (31/03/15)
Manager
Current
Weight
Target
Weight
MFS
19.0%
22.5%
Manager Commentary
Numeric
19.2%
20.0%
Wellington’s aggressive earnings growth strategy comfortably
outperformed the benchmark. Stock selection within the
information technology and consumer discretionary sectors drove
the outperformance. An overweight to, and positive stock
selection in, the health care sector further enhanced relative
returns.
Harris
17.2%
15.0%
Wellington
15.4%
15.0%
Sanders Capital
19.3%
15.0%
Russell Positioning Strategies
5.0%
7.5%
Russell Emerging Markets (CPM)
4.9%
5.0%
Harris underperformed the benchmark for the quarter. Stock
selection in lower valuation securities acted as a headwind in the
prevailing market environment. A significant underweight to the
health care sector and stock selection in the consumer
discretionary sector, detracted.
Sector Allocations (31/03/15)
Sector
Fund
Index
Market Commentary
Financials
21.9%
21.7%
Global equity markets returned 0.03% for the month and 5.52%
for the quarter, as measured by the Russell Global Large Cap Net
Index hedged to the NZ dollar.
Information Technology
17.8%
13.9%
Consumer Discretionary
16.1%
12.6%
Health Care
13.2%
11.9%
Industrials
10.8%
11.2%
Consumer Staples
8.6%
9.3%
Energy
3.7%
7.3%
Materials
4.0%
5.4%
Telecommunication Services
1.8%
3.6%
Utilities
2.1%
3.1%
Global markets finished the quarter in positive territory, taking
encouragement from loose monetary policy in Europe and Japan.
A more dovish stance by the US Federal Reserve also buoyed
sentiment.
After months of deliberation, the European Central Bank launched
a larger-than-expected package of asset buying, prompting a rally
in eurozone markets and a slump in the euro. Over the quarter,
macroeconomic data for the region surprised on the upside.
Japanese equities continued their recent strong run over the
quarter on the back of high levels of central bank liquidity, with
ultra-low returns on bonds pushing investors towards equities.
The market was also buoyed by strong buying from the country’s
massive Government Pension Investment Fund.
US growth remained comfortably ahead of most developed
markets, with labour market data coming in strong. Other
economic reports fell short of expectations which prompted
investors to push back their expected date for an interest-rate
rise. Meanwhile, a stabilising oil price also provided support,
especially to energy stocks and oil-exporting countries.
Emerging markets gained in aggregate over the period. Following
the recent slump, Russian equities were the star performers in the
first quarter. China continued its strong run, as soft economic data
raised the prospect of further monetary stimulus. India gained as
cheaper oil improved the country’s balance of payments, allowing
the central bank to cut interest rates.
Regional Allocations (31/03/15)
Region
Fund
Index
North America
53.1%
56.1%
EMEA ex UK
22.7%
16.0%
Emerging markets
9.5%
10.0%
UK
6.8%
6.9%
Japan
5.3%
6.9%
Asia Pacific ex Japan
2.6%
4.1%
Russell Investments Hedged Global Shares Fund
Growth of $100,000 to 31 March 2015**
** The performance is gross of tax and fees. From July 2012 the performance is for the Russell Investments Hedged Global Shares Fund. For the
period July 2011 to July 2012 the performance is for the Russell Global Opportunities Fund - $NZ Hedged (Class B). This is the Fund that the
Russell Investments Hedged Global Shares Fund invests in, and is available to NZ investors (including retail investors). Prior to July 2011 the
performance is for the Russell Global Opportunities Fund - $NZ Hedged (Class A), which is a fund held by wholesale investors. Prior to April 2010
the Russell Global Opportunities Fund - $NZ Hedged (Class A) was called the “Russell Global Equity Strategies Fund $NZ Hedged”, and included
an enhanced passive exposure. In April 2010 the Fund was re-named the "Russell Global Opportunities Fund - $NZ Hedged", and adopted a
more concentrated investment approach.
The benchmark is the MSCI World Net – $NZ Hedged until 31 December 2010 and the Russell Global Large Cap $NZ Hedged Net Index
thereafter.
Gross Returns to 31 March 2015
Month
Quarter
6 Months
1 Year
2 Years p.a.
Fund
0.34%
6.69%
12.64%
19.46%
19.73%
Index*
0.03%
5.52%
9.56%
16.68%
18.01%
* The benchmark is the MSCI World Net Index - $NZ Hedged until 31 December 2010 and the Russell Global Large Cap Net Index - $NZ Hedged
thereafter.
Past performance is not necessarily indicative of future performance.
Contact Details
For further information please contact Anthony Edmonds:
Phone: 04-499-9654 or 0800-499-466
Email: [email protected] or
[email protected]
Disclaimer
This Report and Update is provided by Implemented Investment Solutions Limited (IIS) in good faith and is designed as a summary to accompany the Investment
Statement for the Russell Investment Funds. The information contained in this Report and Update is not an offer of units in the Fund or a proposal or an invitation to make
an offer to sell, or a recommendation to subscribe for or purchase, any units in the Fund. Any person wishing to apply for units in the Fund must complete the application
form attached to the current Investment Statement. The information and any opinions in this Report and Update are based on sources IIS believes are reliable and
accurate. IIS, its directors, officers and employees make no representations or warranties of any kind as to the accuracy or completeness of the information contained in
this fact sheet and disclaim liability for any loss, damage, cost or expense that may arise from any reliance on the information or any opinions, conclusions or
recommendations contained in it, whether that loss or damage is caused by any fault or negligence on the part of IIS, or otherwise, except for any statutory liability which
cannot be excluded. All opinions reflect IIS' judgment on the date of this Report and Update and are subject to change without notice. This disclaimer extends to any entity
that may distribute this publication and in which IIS or its related companies have an interest. The information in this Report and Update is not intended to be financial
advice for the purposes of the Financial Advisers Act 2008. In particular, in preparing this document, IIS did not take into account the investment objectives, financial
situation and particular needs of any particular person. Professional investment advice from an appropriately qualified adviser should be taken before making any
investment. Past performance is not necessarily indicative of future performance, unit prices may go down as well as up and an investor in the fund may not recover the
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