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OCTIS Asset Management: Octis Asia Pacific Fund
OCTIS Asset Management: Octis Asia Pacific Fund
OCTIS Asset Management: Octis Asia Pacific Fund
Investment Strategy
2014
Performance Data
Since
Inception
2.25
3.78*
Volatility (%)
3.27
4.91*
Return / Volatility
0.69
-3.38
EUR Class
EUR
AUD
USD
0.80
1.28
1.12
1.52
3.72
0.49
30.10
9.14
4.53
3.70m
8.36m
24.26m
Last 12
months
Since
Inception
1.23
4.53*
Volatility (%)
3.72
3.97*
1.35
Return / Volatility
0.33
0.59
-2.17
-3.02
-3.02
Last 12
months
Since
Inception
4.70
4.29*
Volatility (%)
3.22
3.17*
0.77
Return / Volatility
1.46
-7.48
-2.17
AUD Class
USD Class
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
2007
2008
-0.03
-0.59
-0.98
2009
2010
4.02
2.42
-2.29
0.79
-0.19
2.84
2011
-0.12
-0.19
1.56
2012
1.36
0.93
2013
0.95
-0.22
2014
0.66
-0.80
0.08
-0.19
-1.36
-0.46
-1.56
6.88
3.94
-0.72
-0.56
-1.49
2.99
0.51
-0.20
2.06
-0.50
-0.11
1.16
-0.24
-1.61
-0.85
0.73
-0.63
1.15
1.33
-2.24
0.36
-2.11
-0.46
Nov
Dec
0.62
0.37
YTD
1.00
-0.69
-1.25
-0.58
-0.12
-7.48
1.42
2.37
-1.43
0.93
0.94
22.31
0.00
-0.52
0.78
0.67
0.07
3.46
0.42
-1.51
2.01
-0.81
-0.35
3.60
-0.05
0.58
0.63
-0.02
1.02
0.59
3.72
-0.14
-0.08
0.45
0.49
-0.25
0.72
0.86
1.20
0.85
0.22
0.98
-0.16
0.80
Jun
Jul
Aug
Sep
Oct
1.52
Feb
Mar
Apr
May
2012
Nov
Dec
YTD
1.23
0.62
1.86
0.94
3.30
2013
1.17
-0.07
-0.59
0.90
1.49
-2.07
0.52
-0.09
0.51
0.66
-0.07
2014
0.84
-0.65
0.51
-1.81
-0.22
1.38
0.86
0.35
1.15
0.02
1.28
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
YTD
0.74
4.02
3.72
Feb
Mar
Apr
2013
1.01
-0.22
-0.78
0.70
1.35
-2.21
2.73
-0.05
0.53
0.48
-0.24
2014
0.64
-0.83
0.37
-2.13
-0.45
1.19
0.84
0.22
0.96
-1.39
1.12
0.49
Website: www.octis.com.sg E-mail: Octis.marketing@octis.com.sg Telephone: +65 6500 1188 Fax: +65 6500 1189 Address: 80 Raffles Place #24-21 UOB Plaza 2, Singapore 048624
November
2014
Commentary
While the Asian equity benchmark in November is essentially flat year to date (in spite of the sharp rebound in Chinese
equity market), our fund posted a 1.12% return in USD (1.28% and 0.8% resp. in AUD and EUR) with all our processes
posting positive performance. The Asia quantitative long-short (alpha engine) performed well in a context of global low
volatility, the convertible & option book (sigma engine) rebounded nicely from previous month and our Asian macro / liquid
book (beta engine) kept on performing smoothly. The volatility of our fund could seem uncomfortably low for many investors
at 3.7% and could legitimate a much higher leverage at x2-3. However, being too aggressive now faces tough challenges.
Indeed, Asia-Pacific equity markets have entered a treacherous path caught between US rate normalization, a slowing
China, a Japanese experiment with unknown results and deflationary threats in Europe. As US keeps on showing strong
economic momentum, rate normalization is very much on its way though terminal rate and normalization pace remain
unknown. This unknown means that FED starts to become a source of uncertainty, which will increasingly be affecting
equity markets in a context of persistent strong USD. As far as China is concerned, our view was and still remains that the
pain is largely self-inflicted as policy makers are the only ones in the world to have conducted such a tight monetary policy.
The market rebounds strongly in November (which contributed positively to the fund) based on cheap valuation and less
tight monetary policy, but it remains that activity is subdued as evidenced by the Keqiang index (the sectors watched by
Chinas premier Li: railroad transport, power consumption, loan growth).
So far Japan experiment suggests that improvement is only nominal not real as evidenced by weak economic
momentum. This nominal pressure however exerts real competitive pressure on Asian economies (Korea, Taiwan). In
Europe, deflation threat is intensifying while current account surplus is ballooning hurting final demand for Asian exports.
Against this global backdrop, Asian economies face domestic challenges marked by an over-extended credit cycle (ASEAN
for example), steadily falling ROA, margin pressure entailed by global deflationary forces in a context where valuations are
no longer cheap. These domestic challenges are made even more complicated as, compared to the early 2000s, China has
become a major destination for Asian exports and therefore any protracted slowdown in China (markets rumors suggest that
the new normal should set GDP growth at 7%) will hurt Asian exports.
For us the conclusion is simply twofolds: (1) 2015 will be a year where volatility will be rising and markets will exhibits sharp
swings while (2) strong USD and global/domestic Asian challenges will be detrimental to Asian equity performance. In such
an environment we are confident that our three uncorrelated processes can deliver over-performance, which is the reason
why we will not alter our current allocation.
Volatility: Octis vs Major Equity Markets
40.00%
Octis Eur 12m Volat.
35.00%
Asian
Volatility
27%
30.00%
25.00%
Overlay
13%
20.00%
Cash
6%
15.00%
10.00%
Asian
Equity
54%
5.00%
Jul-14
Oct-14
Apr-14
Jan-14
Jul-13
Oct-13
Apr-13
Jan-13
Jul-12
Oct-12
Apr-12
Jan-12
Jul-11
Oct-11
Apr-11
Jan-11
Jul-10
Oct-10
Apr-10
Jan-10
Jul-09
Oct-09
Apr-09
Jan-09
Jul-08
Oct-08
0.00%
Website: www.octis.com.sg E-mail: Octis.marketing@octis.com.sg Telephone: +65 6500 1188 Fax: +65 6500 1189 Address: 80 Raffles Place #24-21 UOB Plaza 2, Singapore 048624
November
2014
Comparison to Benchmarks
EUR
Class
AUD
Class*
USD
Class*
Euribor
3M
Eureka
Hedge
MSCI Asia
Pacific
1 Month
0.80%
1.28%
1.12%
0.01%
2.33%
-0.81%
3 Months
1.63%
2.46%
0.67%
0.03%
1.86%
-4.88%
6 Months
3.96%
5.15%
2.96%
0.09%
5.08%
-0.76%
1 Year
2.25%
4.70%
1.23%
0.23%
5.67%
-0.96%
2 Years p.a
1.49%
0.22%
6.11%
6.24%
3 Years p.a
1.91%
0.40%
5.47%
7.40%
3.78%
4.29%
2.34%
1.43%
1.22%
-2.74%
Since Inception
EUR
Class
AUD
Class*
USD
Class*
Euribor
3M
Eureka
Hedge
MSCI Asia
Pacific
30.10%
9.14%
4.53%
10.58%
8.95%
-17.86%
3.78%
4.29%
2.34%
1.43%
1.22%
-2.74%
Annualized Volatility
4.91%
3.17%
3.97%
0.45%
7.66%
19.50%
Returns / Volatility
0.77
1.35
0.59
3.16
0.16
-0.14
12 Months Return
2.25%
4.70%
1.23%
0.23%
5.67%
-0.96%
12 Months Volatility
3.27%
3.22%
3.72%
0.03%
3.25%
9.25%
1.27%
0.85%
0.92%
0.12%
1.62%
3.93%
-0.70%
-0.70%
-0.92%
-1.82%
-4.36%
4.46
1.88
2.66
0.37
-0.78
0.64%
0.80%
0.81%
1.45%
4.39%
0.42
-0.23
Sortino Ratio**
Standard Dev. of Downside
Correlations to EUR Class
* AUD Class Inception: 01 November 2012; USD Class Inception: 01 January 2013
** Sortino Ratio calculated using the monthly 3 mth Euribor
Funds Information
Fund Strategy
Management Fee
2%
Denomination
Performance Fee
01 October 2007
Redemption Notice
30 Calendar Days
Fund AuM
None
Minimum Subscription
Lock-up Period
None
Octis Asset Management Pte Ltd (OCTIS) is regulated as a Registered Fund Management Company by the Monetary Authority of Singapore (MAS) and is exempt from the requirement to hold a capital markets services license. Octis
Asset Management Pte Ltd is subject to MAS registration requirements which include serving not more than 30 qualified investors and managing assets the aggregate of which does not exceed $S 250M.This presentation and the
information included herein is for general information purposes only and does not constitute an offer to sell or solicitation of an offer to purchase any security, any commodity futures contract or commodity-related product, or any
advisory or trading management service described herein. By viewing this presentation you agree to be bound by the Terms and Conditions of Use. This material is intended as a general outline only and is not a definitive statement on
the subject matter. It is not intended for public use or distribution. This presentation should not be regarded as investment advice or financial product advice and should not be relied upon as such. In making any investment decision,
prospective investors must rely on their own examination of the merits and risks involved. The information contained in this document is subject to change without notice. Any research or analysis used to derive, or in relation to, the
information has been procured from sources deemed reliable by OCTIS for its own use, without taking into account the investment objectives, financial situation or particular needs of any specific investor. The fund mentioned in this
presentation are suitable for professional or institutional investors only. All investment involves risk and past performance is not indicative of future results. Our investment management services relate to a variety of investments, each
of which can fluctuate in value. The value of funds and portfolios we manage may fall as well as rise, and the investor may not get back the full amount originally invested. The loss on realization or cancellation may be very high
including total loss of investment, as the value of such an investment may fall suddenly and substantially. Access to information about the fund is limited to investors who qualify as accredited, expert and institutional investors as
defined under the Securities and Futures Act and Financial Advisers Act of Singapore, and the funds are not intended for the public in Singapore. The information memorandum is not a prospectus as defined in the Securities and Futures
Act. Accordingly statutory liability under that Act in relation to the content of prospectuses would not apply.
Website: www.octis.com.sg E-mail: Octis.marketing@octis.com.sg Telephone: +65 6500 1188 Fax: +65 6500 1189 Address: 80 Raffles Place #24-21 UOB Plaza 2, Singapore 048624