SIML Global ETF Fund Wholesale Investors only
Specialist Investment Management Pty Ltd was founded in 2011 to provide wholesale investors access to investments that generate superior risk adjusted returns and would otherwise be difficult to source. In January 2017 the SIML Global ETF Fund was launched. The Fund invests in a broad range of global assets through Exchange Traded Funds listed on US exchanges through a purely quantitative process. SIML Global ETF Fund 2
Partners Peter Kennedy Michael West Evelyn Vertzagias Peter has had more than Michael has in excess of 20 Evelyn has 30 years’ 30 years’ financial markets years’ experience in experience in banking, experience in equities, financial services most private banking and derivatives and investment recently as a Managing wealth management management. After 12 Director, Head of gained in Hong Kong and years at Macquarie Bank Communications Asia Sydney. Her focus is to and six years at Deutsche Pacific for Deutsche Bank provide holistic investment Bank he founded his first where he was also a advice to high net worth, financial services venture. Member of the family office and not for Asia Pacific Executive profit entities with particular In 2011 Peter founded Committee. He was based expertise in offshore and Specialist Investment in Hong Kong with multi-currency investing. Management Pty Ltd Deutsche Bank for 14 years (SIML). SIML provides and in Sydney where he Evelyn has overall services to wholesale started in the Bank’s responsibility for client investors in high yield fixed Equities Division prior to account management at interest instruments, equities that. Kennedy Partners and aims and derivatives. In 2016 the to ensure consistent high company commenced Michael has researched quality outcomes for all operations under the name systematic asset allocation, clients. She holds a LPAB of Kennedy Partners. The investment and trading Diploma in Law in change of name approaches for over two association with the recognised the evolution of decades and over the last University of Sydney the company to include a five years has used his own number of key individuals capital to develop the and their clients. methodology now used by the SIML Global ETF Fund. SIML Global ETF Fund 3
SIML Global ETF Fund Key Features US Dollar investment – strategy implemented through Low correlation to major Equity indexes with lower • • large liquid US listed ETFs volatility Global multi asset class - exposure to US and global Significant opportunity for risk adjusted out performance • • equities, bonds, and other major global asset classes - a against major benchmarks - SP500 or weighted Equity & broad investment universe (of approximately 50) Bond portfolios Strictly quantitative investment strategy (momentum and Diversification for many investor portfolios • • volatility analysis) supported by significant long term Strong performance after fees since inception (January • academic research 2017) Robust risk management process - maximum back test • drawdown (peak to trough) of <11% since 2003 Positive returns in 2008 / GFC in back-test performance • SIML Global ETF Fund 4
SIML Global ETF Fund Systematic diversified global multi asset class investment The SIML Global ETF Fund (Fund) is an open-ended unit trust domiciled in The Fund’s investment universe comprises all ETFs listed on the US Australia that invests in a broad range of global asset classes through exchanges that have a market capitalisation in excess of US400m. Exchange Traded Funds (ETFs) listed on US exchanges. Investment selection for the Fund is made from a universe of over 50 ETFs The Fund is only available to wholesale clients as defined by the which are divided initially into four baskets or categories providing Corporations Act. portfolio diversification. The number and composition of baskets may be changed in the future at the discretion of the Manager. The Fund aims to provide investors with a USD denominated, superior risk adjusted return on an absolute basis and compared with the S&P 500 The four initial ETF baskets, in combination, exhibit a less than 0.50 Index. correlation with the S&P 500 Index in a back-test of the Adaptive Asset Allocation process between February 2003 and July 2016. The Fund price is denominated in USD and uses a strictly systematic algorithmic process centred on momentum and asset volatility called Adaptive Asset Allocation. Back tests of the process from February 2003 (when significant numbers of ETFs became available), to July 2016 showed positive theoretical compound annual growth rates including in stressed markets such as 2008, with a peak to trough drawdown of less than 10% in any year. SIML Global ETF Fund 5
SIML Global ETF Fund Systematic diversified global multi asset class investment The Fund will typically hold four assets – one from each of the following baskets: Bond / Fixed Global Macro US Industry Global Equity income include assets such as total sectors Regions US stock market, gold, long including US Government These include 19 US A total of 9 broad regions - term US Treasury bonds, bonds of varying industry groups (rather US, Asia ex-Japan, Pacific total US bond market, maturities, muni bonds, than major broad equity ex-Japan, Japan, Europe, commodities, convertible and international and sectors). Frontier Markets, Latin bonds, global equities ex- emerging market bonds; America, India and China. US, high yield and reverse US treasuries. emerging markets. SIML Global ETF Fund 6
Global ETF Fund Investment Strategy Adaptive Asset Allocation process The Fund will invest in exchange traded Analysis of this strategy shows outperformance In most market conditions, there are typically funds (ETFs) listed for trading on US exchanges against the benchmark of the S&P 500 index assets that perform well, whether that is a selected by the Manager using a systematic since 2003 with significantly less volatility and strong market rally in the US or an industry algorithmic approach, referred to as the markedly lower equity drawdowns. When segment in that market, a gold rally, interest Adaptive Asset Allocation process. This back-tested throughout the period of the rate trends, alternative assets, emerging approach rotates investment holdings into a global financial crisis 2007 – 2009, the markets, bonds or even cash. The Fund selection of the strongest performing global application of the Adaptive Asset Allocation through its disciplined Adaptive Asset assets or the most defensive assets in any process simulated for the Fund was profitable. Allocation process will typically be invested in given market condition. This process of Of course, back testing and any past a basket of ETFs that are performing the continuous asset performance and performance is no assurance of actual future strongest in the short to mid-term and thus selection allows the Fund’s investment performance of the Fund, since market capturing mid- term momentum effects whilst holdings to adapt to changing markets conditions can change, assumptions may be factoring in asset volatility and absolute asset and risk environments. wrong and there are differences between performance. Momentum is a core element in direct trading and investing via a managed the Fund’s Adaptive Asset Allocation Process. The Adaptive Asset Allocation process also fund (e.g., different costs), but back testing provides a strong framework for risk The weighting of the four invested assets are under those conditions remains valid and management, mainly by requiring regular equally weighted and rebalanced each highly relevant and is a significant indictor that re-assessment of existing holdings as against month. There is significant academic research should be taken into account. other holdings and potential new investments. that points to the outperformance of equal weighting diversified holdings vs volatility weighting multifactor strategies. SIML Global ETF Fund 7
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