Monthly commentary BMS May 2018
Brummer Multi-Strategy (BMS) gained 2.1 percent in May, resulting in year-to-date performance of 2.0 percent. Hedge Fund Research’s HFRI Fund-of-Funds Composite Index gained 0.7 percent in May and has returned 1.2 percent year-to-date.
Global financial markets diverged in May following political instability in parts of Europe and an escalation in negotiations over international trade tariffs. US equity markets reported gains while European and Asian markets posted mixed performance, with large downturns in Italy and Spain. US interest rates rose as the Dollar continued to strengthen against European currencies. In commodities, oil prices continued to climb.
BMS’s performance in May was primarily attributable to positive contributions from the three long/short equity strategies in the portfolio. Both Black-and-White and Bodenholm reported strong gains, while the most significant contribution came from Manticore, which had a stellar month, gaining 8.4 percent. Macro- and relative value fund Nektar also reported positive returns, mainly as a result of gains on its FX themes. The systematic trend-following funds Lynx and Florin Court, macro fund Arete, and credit fund Observatory, all reported slightly negative returns.
Ahead of June, the portfolio managers reduced the allocation to Manticore and the relatively more market neutral strategies Nektar and Observatory.
