FondsAnbieter- GAM: Weekly Manager Views.

25. Juni 2014 von um 10:30 Uhr
Anbieter. Berichten.Wie beurteilen FondsAnbieter ihre Anlagerreigionen ? Wie fällt die Analyse der Kapitalanlagegesellschaften (KAG) über Fundamentaldaten, Währungen und Kapitalflüsse aus? Informationen direkt aus dem Research Centern der FondsBranche finden SJB FondsBlogger in der Kategorie "Anbieter. Berichten."

unabhaengigkeitFondsAnbieter-GAM: Every year for the past four, we have seen the same ritual. European equity analysts start each year forecasting strong corporate earnings growth of typically 10-15%. These expectations are then gradually downgraded as the year progresses, with growth eventually turning out to be non-existent. This year has been no exception. In January, average earnings SJB Fonds Echo. Analysiert.growth was forecast to be around 13%, but has now dropped to 7%. We expect these forecasts to drop further as we go through the remainder of the year, unless we see unexpected large movements in the euro exchange rate, for example. This environment of little to no average earnings growth is well-suited to our investment style as it increases the differentiation between winners and losers.

Looking at our long book, we invest in two types of companies. First, those that are able to take advantage of growth opportunities thanks to their superior business models and strategies, despite the overall lacklustre economic backdrop. Long-held examples are Babcock and Capita in the UK, which benefit from government orders, and the Swiss watchmaker Swatch. Second, we favour stocks where management has radically changed the direction of an ailing company, and where we are seeing clear signs of improvements. Examples are banks in peripheral European countries or wind turbine manufacturers, such as Vestas. Overall, our long book

trades at 14x earnings, which is in line with the market. However, the market consists of companies that will on average not be able to grow their earnings, while we expect our companies to beat their average analyst earnings growth forecasts of around 15%.

Our short book comprises names that are structurally challenged in their business models. Some trade within the media sector, which is suffering from the disruptive nature of the internet. It also includes commodity names, where the slowdown in China has led to oversupply. More recently, we have added names where expectations have become too inflated, and which are prone to disappointment. It may also be the case that competition is heating up and margins are suffering as a result. On average, our shorts trade at 17x earnings, ie at a premium to the market, and growth expectations are substantial at around 40%. Our view is that these expectations are far too ambitious.

GAM Star (Lux) – European Alpha suffered some performance weakness in April and early May, due to some sharp sector and stock rotations in the market. One factor was a substantial reduction in gross exposures by hedge funds de-risking their portfolios. This meant that they were taking profits both on the short and long side on trades that had done well. Our portfolio got hit by this deleveraging. Investors then moved their proceeds into very defensive stocks, where we do not see much upside potential once the risk-off sentiment subsides.

The decline in sovereign bond yields, such as German Bunds, underscores the risk-off attitude. Coming into 2014, no one had expected bond yields to fall. Many think that investors were potentially positioning their portfolios for bad news, although this has so far not been mirrored on the corporate bond side, where spreads have remained tight. However, our theory is that this has at least in some parts to do with new regulation in the banking sector. For example, European banks are preparing for the ECB’s stress tests, hence loading up on government bonds to show their solid balance sheets to regulators. If that was indeed the case, then this weakness in winning stocks should provide a good buying opportunity. And indeed, we have seen numerous stocks bounce back already in the final days of May and early June to levels that are more in line with their fundamentals.

Our view is that following the correction, momentum stocks are oversold by two to three standard deviations compared to their history. At the same time the price to book ratio of momentum stocks is close to its all-time lows when compared with the price momentum of low momentum stocks. We are therefore confident that a momentum-related strategy like ours should re-rate as these stocks revert back to their mean.

Recent portfolio activity, especially during this period of rotation, has included adding to peripheral European banks. Their cost of funding is falling and the latest monetary easing by the ECB has added to the positive backdrop. Furthermore, we increased the exposure to telecoms, where we expect the merger between O2 and E-Plus in Germany to be approved in due course. This should lead to further consolidation in the German market, and we are also likely to see a similar scenario in Italy. Examples in our portfolio of beneficiaries of this development are Drillisch and Freenet.

We have also added to the short book, reflecting the slowdown in economic activity in China and elsewhere. We have identified various cyclical companies where the slowdown is not yet reflected in valuations. This includes some industrials, chemicals and media businesses. We remain short oil services companies, which are being impacted by oil companies’ reduction of capex.

To fund the additions to the long book, we took profits in some UK housing stocks. These had performed very well, but have lately stopped responding to further positive newsflow. With the UK being the first European country where monetary tightening is increasingly likely over the coming months and quarters, we feel that these names could begin to underperform.

We have allowed the gross exposure in GAM Star (Lux) – European Alpha to drift lower during the April / May correction period, but have lifted it back up recently to 200%. Our net exposure is around zero, while the fund’s beta is approximately 0.15. This set-up reflects our non-directional investment approach. Our view is that market participants have become somewhat complacent, expecting the ECB to continue to support markets with further easing, while Fed tapering is supposed to continue without hick-ups. Such complacency may lead to volatility in the market and we are therefore confident in our non-directional approach.

Equity long / short has traditionally been a strongly performing sub-strategy within GAM Diversity, but so far this year it has struggled. The violent rotation between growth and value stocks during March and April is evident in the performance of the sector, and while this negatively impacted returns for our book, the main detractor year-to-date has been a manager-specific issue resulting from the adjustment in the technology market. We have maintained our exposure to this manager, taking the view that the downturn is an inevitable risk of running a concentrated portfolio, but have sold one other constituent. This manager has been a steady performer historically, but is now struggling to find viable opportunities and has been building cash as a result. We have reinvested this allocation into a more aggressive European manager.

Commenting specifically on the US market, a number of our equity long / short managers have noted that following the above-mentioned rotations, the return to growth stocks has now begun. As such, their outlook for these stocks is very bullish for the remainder of the year, which notably contrasts with their long-only peers who remain much more cautious.

Our trading book currently only comprises two positions; we sold our CTA, managed future and trend exposures last year. In relative value, performance has been strong year-to-date, and we would anticipate this positive theme continuing over the remainder of 2014.

Our event driven strategy has also been a strong performer this year. We favour having our equity beta exposure in this book, as opposed to the long / short space, and are looking to add ideas as they arise, although we are limited to a certain extent by liquidity constraints.

The performance of GAM Trading II has strengthened over the past few weeks, largely due to activity in emerging market currency exposures and rates trades, particularly in the Brazilian fixed income market. Our short-term trading book, which largely comprises statistical arbitrage and systematic strategies, has also contributed to performance, as managers take advantage of range-bound markets. We are looking to increase some of our allocations here, particularly among our statistical arbitrage names.

We have one trend manager in the fund at present. While the trend market is down on the year, our exposure is up around 5%, as the manager continues to trade heavily in equities as well as holding a long fixed income position.

Detractors for GAM Trading II this year have included the very traditional macro managers that we hold, who have found current market conditions very difficult to trade. Our position in an agricultural fund has also detracted, due to its short corn exposure. The corn market has been affected by oversupply, as well as the erratic US weather conditions and geopolitical price shocks resulting from events in Crimea.

We currently see opportunities within the systematic space, particularly non-trend and non-price sensitive strategies. In the macro space, we see potential outside of the traditional multi-strategy area.

On a macro level, we are increasingly hearing predications of the Fed having to take some action to cause a shock in the US fixed income markets in order to disrupt the price compression that has been caused by the ‘reach for yield’ phenomenon. If this happens, either organically or as a result of loaded public comments, the results could be quite interesting.









Über GAM

GAM wurde 1983 als FondsTochter der UBS gegründet. Von 1999 bis 2005 gehörte die Gesellschaft zum Bankhaus Julius Bär. Seit September 2009 ist GAM selbständig. Fonds: 450. Verwaltetes Vermögen: 36,9 Mrd. Euro. Anzahl der Mitarbeiter: 760. Geschäftsführer: David M. Solo.


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