Apollo ups risk in multi-manager funds

Apollo Multi Asset Management’s multi-managers increased exposure to riskier assets during July including a new holding in a Guernsey-based Asian property investment trust.

Steve Brann, Apollo founder and co-manager of its four multi-manager funds, said he had increased equity holdings and reduced a futures hedge aimed at protecting against market falls, changes which he described as “timely”.

Mr Brann added a holding in the £270.7m Macau Property Opportunities investment trust during July, which he cited as the top performer across Apollo’s four multi-manager funds during the month, following an agreement to sell a property at a 92 per cent premium.

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The trust’s share price has gained 106.1 per cent in the five years to August 13 but it is still trading at a discount of nearly 30 per cent to its net asset value.

Mr Brann also highlighted strong performance from recently-added holdings including the $179.7m (£116.3m) Guinness Global Energy fund, the $497m Polar Capital Global Technology fund and the $613m Pictet Timber fund.

The multi-manager said July had broadly proven to be a “good month” for markets after US Federal Reserve chairman Ben Bernanke attempted to calm investors’ fears of an imminent reduction in the pace of its quantitative easing programme.

“This was appreciated by markets, as was the easing of the woes that had been dogging Europe and, more specifically, Portugal, where 10-year [government] bond yields have been pushing out over 7 per cent,” Mr Brann added.

“Unfortunately markets are still driven more by politicians and central bankers rather than fundamentals. It is particularly difficult as fund managers to predict the next statement from a central banker so we continue with a prudent approach and flexibility in the portfolio to react in either direction.”

The IFDS Apollo Multi Asset Cautious and IFDS Apollo Multi Asset Balanced funds are approaching their fifth annivarsary having been launched in November 2008. The £62.1m Balanced fund has gained 39.9 per cent since launch while the £31.9m Cautious fund gained 34.6 per cent, according to FE Analytics.

The Adventurous and Defensive funds, launched in June 2011, have fared less well since inception. The Adventurous fund lost 4.6 per cent and the Defensive fund gained 0.9 per cent.

The four Apollo funds - which have roughly £100m in assets between them - are run by Mr Brann along with Ian Willings and Craig Wetton. The fourth member of the fund management team, Tom McGrath, quit the company in June. Co-founder of Apollo in 2008 with Mr Brann, Mr McGrath left to “pursue other opportunities”.