Monthly commentary BMS August 2017
Brummer Multi-Strategy (BMS) returned 2.4 percent in August which brings year-to-date performance to 5.9 percent. Hedge Fund Research’s Fund-of-Funds Composite Index gained 1.2 percent during the same month, bringing its performance in 2017 to 5.5 percent.
The month of August was characterised by geopolitical tension as the situation with North Korea escalated, negatively impacting global financial markets. Multiple Western equity markets experienced declines on the back of weaker economic indicators, increased concerns from investors, and high valuations. In commodities, gold and base metals gained, while energy prices were impacted by the hurricane season in the US.
All the hedge funds which BMS invests in were positive contributors in August, which was one of the fund’s strongest months since its inception in 2002. The long/short equity and systematic/trend-following strategies all delivered stellar returns, despite being net long equities and the fact that several regional markets were down during the month. Manticore continued its positive trend and was once again the top fund in terms of return and BMS contribution. Fellow long/short equity fund Bodenholm also had a strong month and in both cases performance was a result of select long and short positions. Florin Court and Lynx reported strong returns for the second month in a row, primarily supported by gains in rates and commodities.
BMS net exposure to equities and commodities were stable at approximately 35 percent during most of August, before being taken down to 25 percent towards the end of the month. No significant changes were made to the portfolio allocation.
