August 2016 UND January 2018 December 2016 Available to wholesale investors only
Contents Key features Momentum investing- background research Adaptive Asset Allocation Process Investment universe Back test results Actual investment performance Fund details Specialist Investment Management Pty Ltd Global EFT Fund | 2 | 2 ABN 551 489 20138 AFSL 411324
Key Features • US Dollar investment into US listed ETFs • Exposure to US and global equities, bonds, and other major global asset classes • Strong risk management, maximum back test drawdown (peak to trough) of <10% since 2003 • Positive returns in 2008 back-test performance • Significant opportunity for risk adjusted out performance Specialist Investment Management Pty Ltd Global EFT Fund | 3 | 3 ABN 551 489 20138 AFSL 411324
Momentum Research • The momentum effect in asset class performance has been well researched and documented over many years • Momentum has worked both on a relative and absolute basis • Studies go as far back as the turn of the 20 th century where absolute momentum has been shown to be relevant across multiple asset classes • The following chart (1974 to 2015) shows a back test of a Global Equities Momentum (GEM) model (17.73% p.a. )Vs returns on the S&P500 (12.33% p.a.), GEM + 25% Bonds (15.35% p.a.) and S&P500 plus 40% bonds (10.76% p.a.) • Research is available on request Specialist Investment Management Pty Ltd Global EFT Fund | 4 | 4 ABN 551 489 20138 AFSL 411324
Research Gary Antonacci July 21 2015 http://seekingalpha.com/article/3341645-back-to-fundamentals Returns: GEM 17.73% p.a. GEM/25 15.35% p.a. S&P500 12.33% p.a. Balanced 60/40 10.76% p.a. Specialist Investment Management Pty Ltd Global EFT Fund | 5 ABN 551 489 20138 AFSL 411324
Adaptive Asset Allocation Process • The AAA process is a systematic algorithmic process which rotates investment holdings into a selection of global assets based on momentum. • The process of continuous portfolio re-balancing allows the Fund to adapt to changing markets and risk conditions. • Analysis of the strategy has shown significant outperformance against the S&P500 benchmark since 2003 with less volatility and lower equity drawdowns. • Although past performance may not be an indicator of future performance, the AAA process has tended to outperform in most market conditions and is not overly sensitive to the settings used to determine the portfolio. Specialist Investment Management Pty Ltd Global EFT Fund | 6 ABN 551 489 20138 AFSL 411324
Investment Universe • US listed ETFs provide an investment exposure to a wide range of asset classes, countries and regions • The Fund only invests in ETFs with a market capitalisation in excess of USD 400 million • We currently run four separate ETF baskets: – Bond Income – Global Macro – US Industry Sectors – Global Equity Regions Specialist Investment Management Pty Ltd Global EFT Fund | 7 ABN 551 489 20138 AFSL 411324
Global ETF Fund Investment Process • The Fund invests in the top ranking ETF from each basket based on momentum and volatility • The investments are then periodically rebalanced as market conditions change • The portfolio based on the current model will invest in 4 ETFs with equal weighting • Further research may result in changes to the model • All investments including cash are in US Dollars and the Fund is denominated in US Dollars Specialist Investment Management Pty Ltd Global EFT Fund | 8 ABN 551 489 20138 AFSL 411324
Back Test Results TOTAL RETURN 10000 Global ETF Fund back test Value of $1,000 invested 2003 - 2017 Returns exclude all transaction and management fees and costs 1000 Specialist Investment Management Pty Ltd ABN 551 489 20138 Global EFT Fund | 9 AFSL 411324
Back Test Results Investment period 3/2/2003 – 31/12/2017 Total Portfolio return 16.90 % p.a. Maximum Drawdown 11.40% Winning periods 65.60% Losing periods 34.40% Median winning period +1.53% Median losing period -1.04% Maximum monthly gain +11.20% Maximum monthly loss -6.47% Returns exclude all transaction and management fees and costs Specialist Investment Management Pty Ltd ABN 551 489 20138 Global EFT Fund | 10 AFSL 411324
Back Test Results 10000 Bonds Global Macro US Industries Global Equities Total Return Global ETF Fund back test Value of $1,000 invested 2003 - 2017 Bond Income 25% Global Macro 25% US Industries 25% Global Equity Regions 25% 1000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017 Specialist Investment Management Pty Ltd ABN 551 489 20138 Global EFT Fund | 11 AFSL 411324
Actual Investment Performance $1,250 Global ETF Fund Performance Value of $1,000 Invested $1,200 $1,150 $1,100 $1,050 $1,000 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Returns are unaudited and are calculated after costs Specialist Investment Management Pty Ltd Global EFT Fund | 12 ABN 551 489 20138 AFSL 411324
Fund Details • The Fund is an open-ended wholesale unit trust domiciled in Australia • Unit Price is denominated in US Dollars • Redemptions and applications can be made quarterly • Gearing may be used to a maximum of 1.5x but expected to be around 1.3x • Minimum initial investment is USD50,000 • Management fee of * 1.00% p.a. • Performance fee of * 15% of total return calculated quarterly *Fees are quoted before GST Specialist Investment Management Pty Ltd Global EFT Fund | 13 ABN 551 489 20138 AFSL 411324
IMPORTANT Information The information contained in this document is provided to you by Specialist Investment Management Pty Ltd ACN 148 920 138 AFSL 411324 (SIML). This document and the matters discussed with you pursuant to this document are confidential information of SIML (”Confidentia l I nformation”). By receiving this Confidential Information, you are deemed to have agreed (i) that you will treat the information confidentially; (ii) not to disclose any confidential information to any person; and (iii) not to reproduce or distribute this document in whole or in part, without prior written consent. Although all reasonable care has been taken to ensure that the information given in this document is accurate, it has not been independently verified. Accordingly, no representations or warranty, express or implied, is made in relation to the accuracy or completeness of the information and opinions expressed in this document and, to the maximum extent permitted by law, any and all liability in respect of such information and opinions is hereby expressly excluded, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this information or otherwise arising in connection with it. No responsibility is accepted nor any other person, for any of the information or for any action taken by you on the basis of the information or opinions expressed in this document. Specialist Investment Management Pty Ltd Global EFT Fund | 14 ABN 551 489 20138 AFSL 411324
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