Monthly commentary BMS March 2018
Brummer Multi-Strategy (BMS) posted a decline of 0.6 percent in March and is as a result flat for the year. Hedge Fund Research’s HFRI Fund-of-Funds Composite Index was flat last month. Year-to-date HFRI has gained 0.9 percent.
In March, global financial markets continued to experience high volatility, as tensions in international politics and the risk of a trade war escalated. Equities and interest rates declined across the board in the US, Europe and Asia. In currencies, the Euro strengthened against the British Pound, the US Dollar and the Swedish Krona, while oil and natural gas were among the winners in commodities.
Several of the funds in which BMS invests struggled during March. Nektar continued to post losses on its Swedish theme, while Manticore posted losses primarily due to detracting positions in semiconductors within the North American technology sector. Meanwhile, the macro fund Arete was negatively impacted by growing concerns of increased trade barriers between the US and China. On the contributing side of the portfolio, Black-and-White managed to generate strong gains in a difficult environment for tech stocks. Ahead of April, BMS continued with its more defensive allocation theme from last month.
The portfolio managers decreased the allocation to primarily the systematic trend following strategies, and increased the allocation to more market neutral strategies like Nektar and Observatory, as well as to the macro fund Arete.
