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HEDGE
FOF NEWS – 22 NOVEMBER 2017 |
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It
is true that the returns of Kanaan Hedge Fof (YTD) year to date is
disappointing. The return for October 2017, nett of fees, only 0.78%. However,
investors must remember the original reason why they had invested in a Hedge
Fund of funds. It is of course to prevent that you have all your eggs in one
basket with the main asset class equities, namely unit trust funds of funds,
shares, pension funds… |
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You
may recall that Kanaan Hedge FoF does not correlate with the main asset class,
equities. |
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When
you look at the graphic analyses of the fund below, over the past 12 years, you
will see that the dark blue graph, which represents the hedge fund of funds, did
not crash during 2008 Credit crunch Crash, when equities crashed with more than
51% for that year. We were not in time to switch to cash in the case of our
Kanaan Balanced FoF, which crashed with more than 8%.
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Here you will notice that Hedge FoF crashed during 2013 when
equities moved up. However, even taking the bad performance of the past two
years into account, above you will see that nett of all fees, the annualised
return since inception is still 11.21%, far above the purple line, which
represents inflations and almost three times better that an investment in ABSA’s
Money Market, which is represented by the green
line. |
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Please
also remember that Unit Trust Fund of Funds price daily, because of which the
reaction to good news is very quick there, where Hedge funds price only once per
month and some of the underlying funds, in fact, has quarterly strategies and
longer. The slow turn around have been discussed with the various underlying
funds of Kanaan Hedge FoF and all of them have convinced us that they are
already at the turning point. |
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See
below four of the underlying funds of Kanaan Hedge FoF, which clearly shows how
they
have been turning around since 1 October 2017.
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Here you will notice that 36One has already turned around with 5.16% for October 2017
and the estimate for the first two weeks of November 2017 is already at
1.2%. |
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Steyn
Capital did 1.17% during October 2017 and where Polar Star fund had a very bad
-5.31% for September 2017 and -1.2% for October 2017, it’s estimate for the
first two weeks in November 2017 is already at 3.25%. We see a similar situation
with the other funds as well. |
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Friendly
greetings |
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Andre
Delport |
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