Originally published 30 March, 2020 in the Australian Stock Report by Tim Montague-Jones.
Fears surrounding the global economic impact of a widespread COVID-19 “Coronavirus” outbreak have shaken investor confidence and sent markets around the world into meltdown. As recently as February the market was sitting at all-time highs off the back of a decade long bull run. Since then we have seen the market crash significantly coupled with wild swings in both directions.
This type of unprecedented market volatility would make most people want to run and hide, however, there has been one Sydney-based fund manager who has continued to deliver returns for investors where others have failed.
The Atlantic Pacific Australian Equity Fund (APAEF) from APSEC Funds Management has been operating since 2013 with a risk management mantra and a natural instinct to protect investor capital. Given the current market climate this strategy has been particularly effective and throughout this difficult period, the Managed Fund has performed exceptionally well versus the market.
Since 20th February to 27th March the S&P/ASX 200 has fallen dramatically by over 30.1%. The Fund, however, has performed exceptionally well by comparison and as at 27th March the Fund is currently up over 11%.
Note: The estimate for the Fund’s performance up to the end of 27 March 2020, is a preliminary internal estimate only. This has not been validated by the Fund’s administrator. Things can change rapidly in current market conditions. Chart is accurate as of 27 March 2020. Returns have been calculated to include management and performance fees.
Proven Performance in Down Markets
While the Fund’s performance has been nothing short of exceptional in an extremely volatile market, it is the result of careful, meticulous investment strategy coupled with the use of cutting edge investment research technology from fund managers Nicolas Bryon and George Paxton.
Nic and George started Atlantic Pacific Australian Equity Fund (APAEF) back in June of 2013 with the goal of outperforming the market by capturing upside returns while minimising downside risk. The team bring a wealth of experience to the table with a combined experience of over 30 years of successfully navigating financial markets and have demonstrated how this experience can reap rewards. After all, they have been here before. Co-fund manager George Paxton has over 15 years experience in financial markets and has a history of outperforming when the market is down:
Historically we have tended to outperform in falling markets, in fact, since the inception of the fund we have outperformed in every period where the market has fallen except one. Looking forward, once we get past this current volatility we look forward to buying good businesses at bargain basement prices.
Since inception to 27th March 2020, the Fund has returned over 8.1%pa vs the S&P/ASX200 Accumulation Index returning 4.2%pa. The Fund has also exhibited two-thirds of the volatility of the market an important metric to understand the risk profile of the Fund.
Co-fund manager Nicolas Bryon has been managing mutli-billion dollar portfolios for global financial institutions for over 20 years and has seen many crashes, corrections and recessions:
Due to our experience in these market environments, in that we have seen most of it before, we will use all the techniques we know of to protect capital first and foremost.
A Winning Investment Strategy
The Fund itself is a long-bias equity market product, also known as a hedge fund, which typically buys or short sells Australian listed securities and derivatives. The team employs a Quadruple Alpha Investment Strategy which provides investors with strong capital growth and lower than market volatility. This allows the fund to generate solid returns with downside protection in place.
The fund solves a common problem faced by many investors and retirees right now, that is, the dilemma of moving into Cash and getting almost zero real returns or moving into Shares and face the risk of significant capital loss in the event of a market correction or crash.
Fortunately, for those investors who are risk-averse and need decent returns to fund their lifestyle into retirement, the APAEF offers an attractive solution especially in current market conditions.
Competitive Technical Edge
Since the middle of 2017, the team has had the added competitive advantage of a cutting-edge piece of software that has been instrumental in optimising their investment performance. The HALO Investment Research Platform is a proprietary technology created and developed by Fund Manager Nicolas Bryon to help make smarter, more accurate investment decisions.
The platform uses a variety of scans, monitors and indicators combined with predictive consensus data to give users unparalleled insight into the market, companies and their own portfolios.
Without HALO and its multi-strategy focus, we would not have been able to navigate markets as well as we have.
Investing with APSEC Funds Management
As the market continues to fall investors and financial advisers need to be looking at their downside protection. The APAEF’s recent performance and proven track record has seen an influx of new and additional fund applications. The APAEF accepts applications monthly and you can invest in the fund directly or find it on the Netwealth platform.
The Fund will remain open until the $200m cap is reached and will not extend this limit so don’t delay and get in contact with us now.
If you would like to learn more about the fund for yourself and your clients please give us a call on 1300 379 307 or email us at enquiries@apsec.com.au