News and Announcements
Series 1 units of the Warburton Global Fund returned -1.3% in July 2018
- Published August 29, 2018 12:00AM UTC
- Publisher Wholesale Investor
- Categories Company Updates
Series 1 units of the Warburton Global Fund returned -1.3% in July 2018. The value of $1 invested since inception is $1.88.
July was a varied month for the global financial markets. Most major equity indices rose, while bond prices fell. The US yield curve continued to flatten, as US Treasury bond yields rose more at shorter maturities than they did at longer maturities. Commodity prices were lower across the board. Precious metal, industrial metal and oil prices all fell considerably. The AUD rose while the JPY fell versus the USD.
The Warburton Global Fund registered a small loss for the month. Our portfolio benefited from higher growth expectations with our long equity and short 2-year US Treasury bond trades both being profitable. Our long 20+ year US Treasury bond trade generated a loss offsetting the profit from our short 2-year US Treasury bond trade. While commodity prices capitulated during the month, losses were mitigated as we had significantly reduced our position sizes in advance. The rally in the USD stalled in July, resulting in small losses across our currency positions.
The value of $1 invested in Series 1 units in the five months since February has been flat, going from $1.89 to $1.88. The variation of monthly returns has been -2.6% to +3.3%. The annualised volatility of returns over this period has been 9%. After the rise in market volatility since February, the quantitative model has lowered the amount of gearing in the Fund in response to the riskier market conditions.
We remind investors that a period of 9% annualised volatility in returns is unusually low for the Fund, as the Fund targets an annualised volatility of 30% over the medium term. It has recorded an annualised volatility of 34% since inception. As the amount of gearing in the Fund is now increasing back to historical levels, investors should expect monthly returns to reflect this change in the second half of 2018.
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About Warburton Global Fund
Warburton Investment Management manages client capital via the Warburton Global Fund, a global macro hedge fund that deals in international investments. The fund invests in public equity, fixed income, currency and commodity markets worldwide.
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