Global Macro managers are the ultimate top-down investors but with the geopolitical and macroeconomic picture shifting sharply over the past 12 months, how have these specialists fared?
In the short term, performance has been strong.
While volatility at the start of the year – driven by Swiss and European Central Bank action, as well as Greek elections – caught many sector-specific investors off guard, a GAM Insight report indicated global macro managers were up on average 2% over this period.
But does this good fortune extend back to the same period in 2014? There are currently 47 managers with at least one year under their belt in the Citywire Alternative Ucits – Global Macro sector.
This diverse array of investors achieved an average return of 2.9% in euro terms over the 12 months to the end of January. While 28 managers achieved a better return than this, only five achieved double-digit outperformance in this analysis period.
M&G’s David Fishwick and Eric Lonergan returned 10.7% on the M&G Episode Macro fund, while Vincent Chailley returned 12.38% across three global macro funds at London-based boutique H2O Asset Management.
Taking third place was Mats Ohlson, who returned 19.2% on the Alandsbanken Global Products Defined Risk fund, which was just short of Hugh Hendry, who returned 24.3% on the CF Eclectica Absolute Macro fund.
While these figures are impressive, they pale in comparison to the sector leader. Let’s take a closer look at the Global Macro master posting the biggest returns in the year to the end of January 2015.
Kenneth G Tropin, Graham Capital
Total return (January 2014-January 2015): 49.68%
Going well above and beyond his closest rival is Graham Capital Management chairman and founder Kenneth G Tropin. Tropin formed the investment company in 1994 and has managed macro-focused funds since this date.
His MLIS Graham Capital Systematic Macro fund was launched as a Ucits-compliant alternative fund on Merrill Lynch’s liquid funds platform in 2010. It has accrued $89 million from international investors since its launch.
According to the fund factsheet, recent outperformance stems from Tropin’s fixed income allocations. He has been investing in the long end of the yield curve in the US, while also experiencing smaller gains in both the European and Canadian markets.
Elsewhere, Tropin has the bulk of his short book focused on the commodities sector and experienced strong gains in January as the oil, copper and wheat prices declined over the month. Conversely, Tropin said recent equity allocations had hurt the fund.