Monthly commentary BMS April 2018
Brummer Multi-Strategy (BMS) was flat in April, after performance among the underlying funds offset each other. Year-to-date BMS’s return is approximately flat at negative 0.1 percent. Hedge Fund Research’s HFRI Fund-of-Funds Composite Index gained 0.3 percent in April and has returned 0.6 percent year-to-date.
Global equity markets showed signs of stabilisation in April, after two months of elevated volatility. Asian and European markets posted gains, while US indices were relatively flat. Reduced geopolitical tension combined with a strong start to the earnings season helped boost investor confidence. US interest rates continued to rise on strong economic data, and the US dollar strengthened against most currencies. In commodities oil prices continued to lead gains, reaching the highest level since 2014.
Among the funds in which BMS invests, the number of contributors and detractors were equal, with Bodenholm along with Lynx and Florin Court being last month’s top performers. The strong performance by Bodenholm was primarily attributable to well positioned shorts and continued strong performance from several of its long positions in spin-offs. The systematic trend-following funds managed to take advantage of the prolonged bull trend in oil & energy, but saw some of their gains partly offset by the trend reversal of the US dollar. On the detracting side of the portfolio, Manticore and Black-and-White lost on unfavorable quarterly reports, whereas Arete posted losses on positions in Asian equity indices and Nektar continued to struggle with its Swedish theme.
Ahead of May, the portfolio managers slightly decreased the allocation to the relatively market neutral strategies Nektar and Observatory, and slightly increased the allocation to Florin Court.
