News

02/03/2009 - Liberation VI Trading Note

We have recently carried out the following transaction for Liberation VI:

Sold Gartmore US Opportunities
The manager of the fund has a large overweight position in financials, in particular Banks, and as a result the fund has started to underperform both its peers and benchmark. Our current view is that it is still too early to be overweight the banks and that the underperformance may continue for some time, as a result we have switched the holding into the JO Hambro US Opportunities fund.

Bought JO Hambro US Opportunities
The fund is managed by the highly experienced Gordon Elvey. Having previously managed US equities for British Steel Pension fund he has built an impressive track record in both bull and
bear markets. The fund is unconstrained by benchmark and managed on a multi cap approach.

Gordon uses a well defined stock selection process, which combines both top down and bottom up views. Idea generation his provided by regular and varied stock screening but looks to
concentrates on improving intra-year earnings estimates, he also has the flexibility to raise cash
and use derivatives to protect performance during volatile periods.

Sold Schroder UK Alpha Plus
This is a high conviction fund managed by Richard Buxton, unfortunately the fund has underperformed its benchmark and peer group over the last six months and having spoken to the manager we are unconvinced that it is positioned to weather the current market backdrop. As a
result we have sold the holding.

Bought Newton Income
The fund is managed by Chris Metcalfe who took over management in April 2007, having previously run the Schroder UK Equity Fund. The fund follows Newton’s well established investment process, with a top-down thematic overlay. While the fund is benchmark aware, it will not hold a stock unless there is conviction. The fund may invest up to 20% in overseas companies, with exposure to small caps limited to 5%.

Cazenove UK Target Absolute Return
This is one of the new breed of UCITS III funds which aims to deliver a return of 10% per annum, net of fees (not guaranteed), largely independent of the movement in the UK stock market. It is
able to do this because of its utilisation of the greater investment powers now available to fund
managers and, in particular, the potential to make a return through cash instruments that borrow
shares in companies that they subsequently sell. They do this with the expectation that these share prices are likely to fall and with the intention of buying them back at a lower price thereby
profiting from the difference (this method of investing is known as shorting). So by holding both
long (companies whose share prices are expected to rise) and short (companies whose share prices are expected to fall) positions the Fund aims to significantly reduce exposure to UK equity
market risk when compared to traditional equity funds.
The fund should help reduce volatility in the portfolio whilst at the same time provide extra
diversification during these volatile market conditions.

This document is produced by Close Private Asset Management Limited, for the
exclusive use of current investors in the Liberation ICVC. It is not intended for wider circulation and no assurance of suitability for any purpose is accepted. Close Private Asset Management Limited, 10 Exchange Place, London EC2A 2BY authorised and
regulated by the Financial Services Authority.

<< back