Sturdza Family Fund – Benchmarks

Sturdza Family Fund

The Sturdza Family Fund launched on the 14th December 2018 with the aim of providing our investors with a solution within the multi asset space in light of increasing volatility, offering dynamic exposure to global markets. 
 
The Fund seeks to deliver long term capital appreciation, based on active and flexible management of a mixed asset investment portfolio, predominantly comprised of equities and fixed income investments. As such, the Fund may adopt a more defensive or aggressive strategy in terms of overall allocation when the Investment Adviser considers it to be in the best interest of the Fund and our investors to do so. 
 
Fund Benchmark
 
In light of the Fund’s long term investment objective, within a framework of dynamic asset allocation, the decision has been made to adopt a dual benchmark approach as summarised below: 
 
Reporting Benchmark
 
The reporting benchmark is utilised to track the Fund’s performance and seeks to illustrate the applicable investment universe. The reporting benchmark is a composite of the MSCI World Net dividends Index (NDDUWI), the Bloomberg-Barclays US Aggregate Gov/Credit Total Return Value Unhedged USD (LUGCTRUU) and the SOFR (SOFFRATE), weighted 60%, 20% and 20% respectively and is deemed appropriate for short term comparisons, capturing the volatility of daily mark-to-market valuations. 
 
Performance Fee Benchmark
 
The performance fee benchmark, also called “performance fee Hurdle Rate”, serves as the basis for the calculation of performance fees (charged to the professional and institutional share classes only). 
 
Given the Fund’s long-term investment objective of realising compounded returns above the long-term expected returns of the market on a balanced portfolio and the tendency of balanced portfolios to be overweight U.S. equities, the following structure has been adopted with regards to the hurdle rate for performance fee calculations: 
 
Equity Allocation       Fixed-income allocation
50% * (3m Tbill + 5.0%)  + 50% * (3m TBill)
Resulting in  3m Tbill yield + 2.5%, together the Hurdle Rate
 
The equity premium has been set at 5% to reflect the long-term realised returns of equities above the risk free rate in the United States. It was an active decision to apply the US risk free rate, given it is currently significantly higher than those prevailing in most other developed markets. By applying a high water mark on performance fees, we believe this structure and calculation to be reflective of the Investment Adviser’s long term investment philosophy and facilitates an alignment of interests with our clients. 
 
As at the launch of the Fund, the supplement within the prospectus only references the Performance Fee Benchmark; however E.I. Sturdza Funds plc will be updating this in early 2019 to capture both indices. 
 
Should you require any additional information in this regard, please do not hesitate to contact the Investment Manager utilising the below details.
 
Adam Turberville
Head of Marketing & Client Relations
+44 1481 742380
a.turberville@eisturdza.com
 
Brenda Petsche
Managing Director
+44 1481 722322
b.petsche@eisturdza.com
 
E.I. Sturdza Strategic Management Limited
3rd Floor, Frances House, Sir William Place, St. Peter Port, Guernsey GY1 1GX.

 


 

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Further insights

December 2018

Strategic European Smaller Companies Fund - 2018 Performance Review

Mid December, the Fund’s year to date performance stands at approximately -25% (as at 14/12/2018) while the Fund’s benchmark has lost ~8.5%. Since inception in May 2015, the Fund has returned +4% while the benchmark is down by -2%. Most of the outperformance created in 2015, 2016 and 2017 evaporated this year. 
December 2018

Ready for a Bond Rally by the end of the year?

During November, the main financial markets were driven by Brexit, the trade war between the US and China, the mid-term elections, the FOMC, the defeat of Ms Merkel’s party in local elections and the beginning of social troubles in France. The month began with positive employment data from the US, with a surprising rise in average hourly earnings. In Europe, the fears of slowdown increased after the release of the German growth figures and as a result, government bonds rallied.