Monthly Update: October 2017
Another good month for our long-only global equity fund: an outperformance of +0.8% vs its benchmark MSCI World Index. This takes our outperformance for 2017 to +2.8%. Relative performance was strong in all regions, with only our overweight position in Europe dampening performance.
The Balance fund aims to transform this outperformance into an absolute return and did just that, gaining +1.1% in October. This month we gained a bit more than the registered outperformance thanks to the specifics of our equity market hedge, as explained in last month's update. Also: underlying outperformance was stronger than the headline +0.8% because we were held back by a structurally overweight position in Europe, which lagged other regions in October.
Aphilion SIF had a stellar month, gaining 4.9%, and continuing its recovery after a prolonged drawdown. We are still down 2.8% for the year, but with November also off to a strong start we might just yet end the year in positive territory, something which would be more in line with our long term track record: an average annualised return of +9.8% since the launch of the fund in 2008.
Volatility remained surprisingly subdued given the robust gains and the fact that it was an "earnings month" (Q3 results). Rolling 52 week volatility is at a two year low and near all time lows of 10% annualised. As stated before: we put considerable research effort into lowering SIF's volatility, by matching ever more precisely the long and short (factor) exposures in the fund. We have made good progress here, thanks to effective proprietary risk models, an increased number of positions and more frequent rebalancing of existing positions, with the ultimate aim being a higher Sharpe, and smaller drawdowns to help keep everyone on board!
More numbers and information can be found in the fund factsheets (available by clicking on the buttons above), on our website for the Q² funds, and on www.aphilion.com/SIF for our hedge fund (well informed investors only).
Thank you for your continued interest and consideration,
Jan Holvoet, Nico Goethals, Xavier Boussemaere