A trio of European equity holdings have boosted the performance of Apollo Multi-Asset Management’s funds during the start of the year as the continent’s recovery began to gain traction.
Three of the group’s four multi-manager funds benefited from the strong performance of the FP Argonaut European Alpha, F&C European Small Cap and Odey European Absolute Return funds, all of which have exposure to economically sensitive firms, including many domiciled in peripheral Europe.
In the FP Apollo Multi-Asset Cautious fund’s February commentary, manager Steve Brann said: “It is clear that the market remains buoyant as we continue to see dips almost immediately bought, pushing equities higher.
“This suggests to us that there is still a great deal of cash sitting on the sidelines or being moved out of fixed interest markets.”
In the first quarter of 2014, the FP Argonaut European Alpha fund – managed by Barry Norris – has performed particularly strongly, gaining 10.2 per cent according to FE Analytics. The F&C European Small Cap fund, managed by Sam Cosh, posted a 6.8 per cent gain for its euro share class in the same period, while Odey Asset Management’s European Absolute Return fund, launched in December, returned 2.3 per cent in the first three months of the year.
Mr Brann said the team had now turned its attention to the potential longer-term effects of Russia’s annexation of Ukraine’s Crimean peninsula.
The manager said: “Throughout [February] markets paid little attention to the violent unrest in Ukraine, although right at the end of February events moved up the global political agenda as pro-Russian forces took control of the capital of Crimea, causing concern about the possibility of either a civil war or direct Russian involvement.
“The main concern for us now is that Russian president Vladimir Putin’s direct involvement has sparked a prolonged and more serious international incident in Ukraine.”
Elsewhere in the portfolio, Mr Brann also hailed the continued strong performance of the Macau Property Opportunities investment trust, the top position in Multi-Asset Cautious, Balanced and Adventurous funds. The Apollo managers initiated the holding in July last year, since when the trust’s share price has risen by roughly 60 per cent.
In the five years to April 2, including the bull market in equities since the financial crisis, Apollo’s Multi-Asset Balanced and Multi-Asset Cautious funds have gained 32 per cent and 31.9 per cent respectively, according to FE Analytics.
The Multi-Asset Defensive and Multi-Asset Adventurous funds, launched in June 2011, have performed rather less strongly: the Defensive fund rose 3.6 per cent in the period while the Adventurous fund was flat.
Niche property play pays off
The Apollo managers’ position in the £303.6m Macau Property Opportunities trust was established in July as part of a ‘risk on’ trade and has proved to be particularly lucrative. Since the team bought in, the trust’s shares have gained 60 per cent, including a 13.6 per cent gain in February alone.
The Guernsey-based trust, run by Hong Kong investment boutique Sniper Capital, invests solely in real estate in Macau, a special administrative region of China. In spite of its niche area – or perhaps because of it – the trust’s share price has climbed 332 per cent in five years.
