Andrew Swan

The next five-year plan from the Chinese government is likely to move the country from deflation to reflation, according to portfolio manager of Man GLG Asia Opportunities Fund, Andrew Swan. He says the focus will be on domestic demand to lift consumption levels in the economy.

“The Chinese government has described its next five-year plan as aiming to vigorously improve consumption as a share of GDP. This reflects the government’s desire to achieve balanced growth by providing greater economic incentives to increase household disposable income and boost consumer confidence to spend more in the local economy.

“If all the goals set out in the five year plan are delivered, it will positively impact investment markets as increased consumption will drive up corporate profits of Chinese companies,” says Mr Swan.

As with China’s previous five year plan there will be winners and losers, he says.

“The previous plan resulted in a fairly narrow set of winners, but it may be different this time around.

“The structural reforms that will encourage higher consumption will in turn drive prices higher. Higher prices have a positive impact on GDP, which bodes well for corporate profitability and for the broader equity market,” says Mr Swan.

In terms of trade negotiations with the US, Mr Swan says that China is in a stronger position than many assumed, as highlighted by with the recent trade tensions around rare earths.

“In recent weeks there has been a back down from the US on some of its trade threats. While this is good news, there still isn’t a permanent long-term solution that’s been agreed, instead, we have seen a delay in addressing the trade issues at hand.

“As it stands, while the tariffs are still there, they are certainly lower than what was anticipated. Importantly, they are in line with some of the tariffs that have been placed on other countries in the region.

“This is not a bad outcome for China compared to what the market feared earlier in the year,” says Mr Swan.

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Andrew Swan

Asia will continue to show resilience in the face of evolving global trade dynamics, given several tailwinds supporting the region’s growth prospects, according to Andrew Swan, portfolio manager at Man Group.

While the US tariffs remain a key concern, China’s economic shift, a weakening US dollar, growth of the tech sector and monetary policy changes are supporting this regions’ growth outlook, Swan said.

“China’s transition of its economic model from an investment-driven growth model to a more consumption-driven economy is a critical factor in its growth outlook.

“The Chinese government is focusing on improving social safety nets, which is expected to unlock significant household savings and stimulate domestic consumption. This is not just short-term stimulus measure by the Chinese government, rather a long-term shift in how China wants to grow,” Swan said.

Beyond China, other markets in Asia, such as Indonesia and the Philippines are also presenting promising opportunities, which Swan said is being supported by the rate cutting cycle by the Federal Reserve (Fed) and a weakening US dollar.

“A strong US dollar historically correlates with Asian market underperformance. But with a weaker US dollar emerging, the outlook for the region is improving.

“In addition, many Asian economies have aligned their monetary policies with the US to avoid currency depreciation and capital flight. With the expectation of further rate cuts by the Fed, this will allow Asian central banks to ease monetary policy, stimulating economic growth and corporate profitability.

“Although Indonesia is having a tough time due to political concerns, as the Fed cuts rates further, the economy should reflate, which makes this market look very attractive,” he said.

According to Swan, the next phase of Asia’s tech growth will be supported by AI innovation and implementation which will be another key growth driver for the region.

“AI will play an important role in the region’s next phase of growth, particularly in consumer devices. As AI continues to be integrated into products like smartphones, tablets, and PCs, there will be a significant upgrade cycle underway.

“I believe that this is the year where consumers will be motivated to upgrade their devices, as AI integration is executed into these devices and users with be provided with greater efficiencies and functionalities than ever before,” he said.

Swan said the investment landscape in Asia looks very favourable for investors.

“We are at a very important inflection point here, which the region hasn’t been in for some time.

“China’s economic pivot, Fed rate cuts, and growth in the tech sector are all tailwinds that are driving growth in Asia. In our view investors should be looking to this region for their next leg of growth and now is a better time than ever.” said Swan.

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Andrew Swan

China’s about-turn on its COVID restrictions late last year has had profound impacts on its economy and those of the Asian countries that trade closely with it.

Federal Treasurer Jim Chalmers went so far to say that China’s slowing growth was one of the major economic challenges facing Australia at the start of 2023.

The impacts of COVID in China have been real and terrible for many; however we are optimistic that an open China will ultimately be good for economic growth and we believe the Chinese economy will recover this year. It will be in the coming weeks and months that we will get a much better feel for what that recovery will look like.

Chinese economy

With regard to a Chinese economic recovery, we see the potential for two main options playing out. It will be either a strong, broad recovery or a narrow, shallow recovery.

We at Man GLG are in the slower recovery camp. The argument that the general public has been saving during the pandemic, and therefore has much pent-up demand, is true but most of that household savings has gone into long-term deposits which cannot be immediately spent.

Of those two recovery options, a broad, strong recovery will have global implications through its impact on commodity prices. But even a narrow, shallow recovery will have an impact on global tourism as more people travel.

There is a surge in demand for travel coming. As people have been stranded at home for the past two years, many are now desperate to travel, both domestically and internationally, and forward indictors for all travel are now very strong.

I suspect we’re going to start to see what a post COVID world looks like for China in the second half of February. And it will be a period of time when economic activity picks up for China as economic activity in the West is slowing down.

South Asia

At the same time South Asia is continuing to recover and will benefit from the borders opening up with China as tourism into countries like Singapore, Thailand, Indonesia, and the Philippines, picks up.

Last year many Asian countries, especially in Southeast Asia, acted very independently of what was going on in China and independently of what was going on in developed markets. Many Asian countries actually had a good year when it came to economic growth and returns to equities, which is very unusual in a global downturn.

While there were pockets of strength in South Asia –especially in the smaller economies — now we’re moving into an environment where you have the biggest economy improving, along with smaller economies doing well.

We believe the majority of Asian countries will experience a better economic environment and improving corporate profitability in 2023, which will be good for equities.

Sectors to watch

Given our expectations for a slower recovery, we are looking at companies in the travel, entertainment and restaurant sectors in China, but are very targeted in our investments across all sectors as we do not believe all companies will benefit.

Gaming and tourism

Hong Kong and Macau are likely to be beneficiaries in the first wave of travel, so we like the Macau gaming space. The Macau casinos should do exceptionally well over the next couple of years.

In fact, in December one of the Man GLG Asia Opportunities Fund’s top contributors was Macau casino operator Sands China, which was buoyed by easing restrictions on both the mainland and in Macau. The stock has more than doubled in price since early October when it was granted the renewal of its casino licence.

Countries like Thailand should also benefit from an increase in Chinese tourism, so we have consumption and financials investments in those markets.

Healthcare

We like certain areas of healthcare in China post COVID, as many parts of the sector were deadlocked during COVID and are now in a much better position to grow.

Medical device production and general healthcare should start to improve. In terms of companies to look at, pharmaceutical stock Pharmaron was in the fund’s top five contributors in December as it rallied on growing demand for antipyretics and other anti-viral medication following the steep rise in COVID infections since the start of December.

Automation

Another area of focus in China is automation, which is an industry that has historically been growing above GDP but was heavily impacted by lockdowns. Not only did demand drop, but production capacity during COVID was impacted as well. A return to normal production in 2023 for automation should see corporate profitability improve across the sector.

Insurance

The other area we like is insurance, which has been through some extremely tough times. It should benefit from the restructuring in the sector over the last couple of years as well as the overall economic recovery which will improve the potential to sell insurance products to households.

In December, insurance groups AIA and Ping An were two of the top five contributors to the fund’s outperformance as they also continued their strong run on the back of improving financial conditions and support for the earnings outlook due to China’s reopening.

Looking forward

The next month will be crucial in understanding the economic fate of China, along with that of the rest of Asia, which leans so heavily on it. As the weather warms up in the weeks following Chinese New Year, we should start to get a good sense of whether this is the developed market post COVID model that we should be looking at – i.e. one where consumption booms as consumers use up COVID savings – or whether it’s a China-nuanced recovery.

If it is a broad recovery, then tourism dollars will be flowing around the world, investment will pick up, and that will in turn drive demand for commodities. If supply remains restricted, then it could also be inflationary for the rest of the world. That could cause problems as developed market central banks are still grappling with trying to use monetary policy to bring inflation under control.

Whatever the outcome, there are still good equity opportunities in China, and Asian countries that trade with China, for the astute investor.

By Andrew Swan, portfolio manager

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GSFM Responsible Entity Services Limited 48 129 256 104 AFSL 321517 (GRES) is the responsible entity of the Man GLG Asia Opportunities Fund ARSN 658 645 026 (the Fund). The Fund is registered as a managed investment scheme under the Corporations Act 2001 (Cth). GRES has appointed GLG Partners LP (GLG LP) as the investment manager of the Fund. Class A Units in each Fund are available for issue by GRES, as responsible entity of the Fund. The information included in this update is provided for informational purposes only. The information contained in this update reflects, as of the date of publication, the current opinion of GLG LP and is subject to change without notice. Before making an investment decision in relation to the Fund, investors should consider the appropriateness of this information, having regard to their own objectives, financial situation and needs. Prospective investors should read and consider the product disclosure statement for the Fund dated 2 September 2022 which can be obtained from www.gsfm.com.au or by calling 1300 133 451. GSFM Responsible Entity Services has produced a Target Market Determination (TMD) in relation to the Fund. The TMD sets out the class of persons who comprise the target market for the Fund and is available at www.gsfm.com.auPast performance information given in this document is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. None of GRES, its related bodies or associates nor any other person guarantees the repayment of capital or the performance of the Fund or any particular returns from the Funds. No representation or warranty is made concerning the accuracy of any data contained in this document.

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Damien McIntyre

Man GLG, the discretionary investment management engine of Man Group, has launched the Man GLG Asia Opportunities Fund in response to increasing adviser demand for, and opportunities in, Asian equities.

The fund has been awarded a ‘RECOMMENDED’ rating from Zenith.

The fund applies a concentrated long-only strategy that is style agnostic. It will invest in equities either listed on exchanges in the Asian region, or which derive a majority of their revenues from the Asian region.

It aims to achieve a gross return of 3-5 per cent greater than its benchmark – the MSCI All Country Asia ex Japan Net Index (A$) – over rolling three-to-five-year periods.

Andrew Swan, portfolio manager, Man GLG, says: “The fund’s philosophy is to maximise long-term capital appreciation.

“We take a flexible, fundamentals-driven approach to investing to create a concentrated high conviction portfolio of 35-45 stocks from a universe of 1200 stocks.

“This provides exposure to a broad universe of Asia ex-Japan equities that can be difficult for individual investors to access,” Swan says.

He adds that there are a number of reasons to be optimistic on the outlook for markets in the Asian region.

“Relative to developed markets, there are minimal inflation pressures in the Asian region generally.

“Compared to the situation in developed markets, there is a lower level of speculation in Asian asset prices to be unwound. This presents good opportunities for astute investors,” he says. 

GSFM is the responsible entity and distributor of the Man GLG Asia Opportunities Fund in the Australian and New Zealand markets.

GSFM chief executive officer, Damien McIntyre said GSFM has been looking for a partner to build out an Asian equity strategy for some time, to meet market demand for the asset class.

“The fund provides the opportunity to invest in a strategy managed by a dedicated and experienced investment team.

“Andrew Swan is an experienced portfolio manager with a great track record in managing Asian equities.

“The investment team’s core focus is to capture turning points in companies that have high earnings per share revision potential over a forecast period of up to 12-18 months. I am confident that this proven, fundamentals driven approach to investing, will produce good results for investors,” he says.

In its research report, Zenith notes that the fund provides investors with a relatively concentrated, style agnostic Asian (ex-Japan) equities exposure. It says: “GLG invests across the market capitalisation spectrum through an investment process that is driven by macroeconomic and fundamental research.

“The team has the required experience and expertise to successfully manage the fund.

“Zenith has high regard for the portfolio manager, Andrew Swan, and believes that the fund is well positioned to deliver upon its investment objectives,” Zenith says.

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Rohit Shroff

Man Group, the global, technology-empowered active investment management firm, has announced that Rohit Shroff has joined its Sales team in Australia, reporting to Hersh Gandhi, Managing Director, Asia ex-Japan, at Man Group.

In his new role, Rohit will focus primarily on relationships with institutional clients and prospects of Man Group, as well as broader business and brand development.  He will work closely with the Australian and wider APAC regional team.

Rohit joins Man Group from PIMCO, where he spent 10 years and worked in both the UK and Australia. At PIMCO, Rohit focused on fixed income, hedge fund, private credit and other alternative investments. Rohit holds certifications as a Chartered Financial Analyst (CFA), and a Chartered Alternative Investment Analyst (CAIA). He also has an Executive MBA from London Business School and an undergraduate degree from Monash University, Australia.

Hersh Gandhi, Managing Director for Man Group in Asia Pacific ex-Japan, said: “Rohit’s significant experience and knowledge of the Australian financial services landscape are fantastic assets for our team, and we are really pleased to have someone of his calibre on board. Australia is a growing area of focus for us as we continue to see opportunities to create innovative solutions that address complex investment needs. Rohit’s appointment reflects our desire to continue building out both our investment and distribution teams here and follows portfolio manager Andrew Swan joining us in 2020.”

Rohit Shroff, Director of Sales for Man Group in Australia, added: “Man Group is a firm I have admired from afar, with an increasingly strong and diversified range of strategies. This feels like a great time to be joining the firm’s expanding Australia office. I am really looking forward to working with my new colleagues across Asia Pacific and beyond, making use of the firm’s world-class infrastructure, technology and investment teams to deliver new solutions to clients.”

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Luke Ellis

Man Group announces that it has joined the Net Zero Asset Managers initiative and is thereby committed to reducing greenhouse gas emissions to net zero in investment portfolios by 2050. This is an industry-led effort to help limit warming to 1.5C, consistent with the Paris Accord. The firm has a significant focus on Responsible Investment (RI) and ESG, and this commitment complements the progress already made on climate objectives across RI investing, stewardship and industry advocacy.

In line with the initiative’s objectives, Man Group pledges to:

• Work in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management (‘AUM’);
• Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by 2050 or sooner; and
• Review its interim target at least every five years, with a view to increasing the proportion of AUM covered until 100% of assets are included

The Net Zero Asset Managers initiative, an international group of asset managers with 128 signatories and $43 trillion in assets under management, provides a powerful tool for investors to raise collective climate expectations, articulate the decarbonisation curve of portfolios and engage with companies. Under this guidance, Man Group expects to outline a path to an interim 2030 target across its corporate issuer-specific holdings through both decarbonisation and increasing investment in climate solutions. As a diversified asset manager, Man Group recognises the lack of standardised approaches in the non-corporate issuer domain and will work within the Institutional Investors Group on Climate Changes (IIGCC) framework and in partnership with other forums to align its total asset exposure to net zero.

Luke Ellis, CEO of Man Group, says: “Climate change is an urgent challenge. It represents an existential risk not only for how we will manage our clients’ money, but also for how we will move forward as a society. In that light, asset managers can and must act as powerful drivers for much-needed climate action. The gravity of this is reflected in how we as a firm evaluate climate risk, engage with companies and continue to decarbonise our portfolios. We join the Net Zero Asset Managers initiative in order to build on our existing progress, raise our own standards of accountability for portfolio-born emissions and send an unequivocal message that we recognise the importance of managing climate risk for our clients, employees, stakeholders and the environment.”

Man Group integrates ESG into the investment decision-making process across a wide range of quantitative and discretionary investment styles and continues to develop RI strategies and solutions that align with the values of the firm’s clients. Today, $43 billion^[1] of the firm’s funds under management incorporate ESG factors into the investment process. Man Group actively coordinates its stewardship activities, including engaging investee companies on key ESG issues, co-filing shareholder resolutions and playing a leading role in the Say on Climate initiative. The firm voted in support of 97% of environment-focused shareholder proposals in 2020.

Man Group is also dedicated to promoting responsible investment in the asset management industry though advocacy, education and thought leadership. The firm is an active member of industry groups including the IIGCC, Climate Action 100+, Carbon Pricing Leadership Coalition and is a signatory for the UN-supported Principles for Responsible Investment, among others.

As a listed FTSE-250 company, Man Group plc has already committed to achieve net zero carbon in its global workplaces by 2030; the firm has recently been recognised as a FT Europe Climate Leader 2021 for its work reducing its scope 1, 2 and 3 carbon emissions.

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[1] Man Group calculation, based on Global Sustainable Investment Alliance definitions, where ESG integration is defined as the systematic and explicit inclusion by investment managers of environmental, social and governance factors into financial analysis. The RI AUM figure aggregates all relevant portions of portfolios (funds or mandates) which routinely and explicitly include ESG factors into the investment decision making process. This includes combined AUM of all affiliated Man Group investment managers. All investment management services are offered through Man Group affiliated investment managers.

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Andrew Swan

Man GLG, the discretionary investment management engine of Man Group, has launched a high conviction Asia (ex-Japan) equities strategy led by Andrew Swan, Head of Asia Equities (ex-Japan).

The long-only, style agnostic and fundamentally-driven strategy will have an active share of at least 70% and is composed of positions across all market caps, with a preference for mid-cap companies over time. The strategy will typically run sector or country weights to +/-20% versus the MSCI Asia Ex-Japan Index, with the majority of returns achieved through investing in companies the team believes are likely to see positive revisions to their earnings over a period of up to 12-18 months.

In addition to bottom-up analysis, the team will overlay various top-down macro views to determine how the strategy can be tilted to help generate alpha. The investment process will analyse the current macro environment and potential future developments, in order to understand how countries, industries or investment styles (such as growth, value, quality, volatility and momentum) will perform. The strategy will be adapted to ensure the most favourable factors are over-weighted relative to the benchmark.

Andrew joined Man GLG in August 2020 and has more than 25 years’ experience investing in Asian equities. He was previously Head of Asia & Global Emerging Market Fundamental Equities at BlackRock where he managed assets of over USD$25 billion across multiple Asian and emerging markets equity strategies. Andrew is supported by newly appointed Analysts Anand Agarwal, Sally Chan, Andrew Hill and Alethea Leung.

Andrew Swan, Head of Asia (ex-Japan) Equities at Man GLG, said: “Equity markets in the Asia region represent significant opportunities for stock picking and alpha generation. Many of the largest emerging market economies in Asia have undergone significant structural improvements over the last two decades and these, coupled with high levels of GDP growth, have provided fertile ground for companies to prosper. Despite this, they remain relatively under-researched and less efficient than developed markets, so we believe they offer ample opportunities for investors over the economic cycle.”

Teun Johnston, CEO of Man GLG, said: “As a region, Asia is attractive because it’s a market where fundamentals dictate returns, and one with high dispersion at the stock level, making it a rich environment for proven managers like Andrew. Both he and the team of analysts leading the development of this strategy at Man GLG have an established track record in the region and with clients. We believe this is a particularly exciting time to launch this strategy and are pleased to add it to Man GLG’s increasingly diverse range of global equity offerings to clients.”

Hersh Gandhi, Managing Director for Asia Pacific ex-Japan, Man Group said: “I’m really pleased to have Andrew join us in the Sydney office. He is well-known to a number of investors already across Australia, as well as in the Asia-Pacific region more broadly. At Man Group we are always looking for high-calibre portfolio managers to join the platform in order to develop and expand our range of strategies. The addition of Andrew and this high conviction Asia-focused strategy brings our clients another investment option and point of entry to the market.”

As at 30 September 2020, Man GLG had USD$27.3 billion in funds under management.

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Damien McIntyre

Man Group’s flagship fund,  Man AHL Alpha (AUD), has been upgraded to a ‘Highly Recommended’ rating from research house Lonsec, recognising the fund’s strong performance over the past three years of operation in the region.

The ‘Highly Recommended’ rating indicates that Lonsec has very strong conviction the financial product can generate risk adjusted returns in line with relevant objectives and that it is considered a preferred entry point to this asset class or strategy.

Man AHL Alpha is a trend following oriented hedge fund which invests across a range of asset types and markets globally, through exchange traded futures and OTC contracts, with continuous 24 hour trading. The investment team uses a quantitative-based, computer-driven trading program to exploit price movements in over 500 international markets.

GSFM has been responsible for retail distribution of the London-headquartered fund in Australia and New Zealand since 2017.

Commenting on the ‘Highly Recommended’ rating GSFM chief executive, Damien McIntyre, pointed to Man AHL Alpha’s long heritage and track record.

“Underpinning the rating upgrade is Man’s strong pedigree in trend following, a strategy it pioneered and has successfully deployed for more than 30 years.

“Lonsec highlighted Man’s commitment to research and innovation which has differentiated the offering from peers over time. These comments underscore more broadly Man’s ongoing dedication and commitment to CTA or trend following strategies.

“Staying true to label was particularly beneficial during March 2020, the month that COVID-19’s pandemic status was officially declared,” Mr McIntyre said.

“During this time Man AHL Alpha offered low correlation to equities and delivered positive returns when equity markets were in crisis.

“A key competitive advantage of Man AHL Alpha is its allocation of up to 25 per cent to the AHL Evolution program. This program is offered to institutional investors only with the only available access point for retail investors being via Man AHL Alpha. It provides exposure to a set of markets generally not traded by others offering further diversification to an equity biased portfolio”

In assessing the fund, Lonsec’s product review report noted Man AHL Alpha’s large and high-quality investment team, with execution considered a particular area of strength.

The research house stated a key competitive advantage of the Fund is its diversification of traded markets, experienced research team, execution infrastructure and platform, along with the model’s overall responsiveness. Lonsec said it considers these aspects to be particularly valuable from a diversification perspective to an equity biased portfolio.

“Compared to most peers, the Fund’s generally shorter horizon, more dynamic models are potentially better suited to provide greater convexity to an equity biased portfolio in V-shaped markets,” Lonsec said.

“As a moderate-to-high volatility single strategy hedge fund, Lonsec considers this product should sit within the growth component of a diversified investment portfolio. The Fund is aimed at high risk profile investors with five-year plus investment time.

“It trades a highly diverse and differentiated set of markets compared to peers which may provide greater diversification benefits”.

Mr McIntyre added that Man AHL Alpha has delivered strong performance in a variety of market environments because of the strategy’s ability to profit from trends, either up or down, in hundreds of liquid markets across a variety of asset classes.

“This gives rise to a return stream which is generally uncorrelated to equity markets in the long term, but has the potential ability to perform strongly in times of stress.”

Man Group is one of seven partnerships that GSFM has undertaken with specialist funds managers in the Australian market. These span Australian equities, global equities, fixed income, volatility and absolute return through global equities.

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With more than 25 years’ experience investing in Asian and emerging markets equities, Andrew will initially be responsible for managing a concentrated Long Only Asia (ex-Japan) equity strategy. He will join the firm in mid-Q3 and will be based in Sydney, Australia. Andrew will report directly to Man GLG CEO Teun Johnston.

Andrew joins Man GLG from BlackRock, where he most recently served as Head of Asia & Global Emerging Market Fundamental Equities, managing significant client assets across multiple Asian and emerging markets equity strategies and helping to develop the firm’s investment platform in Asia. Andrew joined BlackRock in Hong Kong in 2011, before which he spent 17 years at JPMorgan in various Asia Pacific equity portfolio management and research roles. He earned a Bachelor of Commerce in Accounting and Finance from the University of New South Wales, Australia.

Teun Johnston, CEO of Man GLG, said: “We are very excited to welcome Andrew to the Man GLG team. We have been looking to expand our Asia offering for a number of years, but have been patient as we want to ensure that whenever we build out strategies in new areas, we do so with individuals we believe to be exceptional Portfolio Managers. Andrew is very experienced and has demonstrated real skill in managing portfolios for his clients over a number of years. We feel that he will be a good fit both within Man GLG and the broader Man Group business.”

Andrew Swan said: “I am keen to return to focusing on investing for clients and Man GLG’s dual focus on autonomy and collaboration, coupled with Man Group’s reputation for having a culture of innovation and an exceptional technology platform, made this role a really compelling opportunity for me. I look forward to working with Teun and the team to develop the new strategy and build out a new team.”

Hersh Gandhi, Managing Director, Asia Pacific, at Man Group, added: “We are delighted to be building our footprint in Australia, which is a strategically important market for the firm. Andrew already has a strong reputation throughout Asia Pacific and we look forward to introducing him to our clients across the whole region.”

As at 31 December 2019, Man GLG had $31.6 billion in funds under management.

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Damien McIntyre

Man Group’s flagship Man AHL Alpha fund has received a ‘Recommended’ rating from research house Lonsec, recognising the fund’s strong performance over the past two years of operation in the region.

A ‘Recommended’ rating indicates that Lonsec has strong conviction the financial product can generate risk adjusted returns in line with relevant objectives and that it considers the financial product an appropriate entry point to this asset class.

Man AHL Alpha is a trend following oriented hedge fund which invests across a range of asset types and markets globally, via exchange traded futures and OTC contracts. The investment team utilises a quantitative-based, computer-driven trading program to exploit price movements in some 450 international markets, with the program underpinned by sophisticated risk management techniques.

GSFM has been responsible for retail distribution of the London-headquartered fund in Australia and New Zealand since 2017.

Commenting on the rating upgrade – from ‘Investment grade’ to ‘Recommended’ – GSFM chief executive, Damien McIntyre, said the Lonsec assessment gives further credence to the decision to act as the fund’s local distributor, and why it continues to attract such strong interest from Australian investors.

“Man AHL Alpha has a long heritage and track record and is managed by highly-qualified, long-standing investment professionals.

“At GSFM, we’ve been well aware of the potential of this fund for some time, so it’s pleasing to see that the robust and quality-driven approach to the underlying investment strategy has been recognised and rewarded by an independent third-party,” he said.

In assessing the fund, Lonsec’s product review report noted Man AHL Alpha’s large and high-quality investment team, with execution considered a particular area of strength.

“Compared to most peers, the fund’s generally shorter horizon models are potentially better suited to provide greater convexity to an equity biased portfolio in v-shaped markets.

“It trades a highly diverse and differentiated set of markets compared to peers which may provide greater diversification benefits,” the report said.

The ratings upgrade follows the move by GSFM earlier this year to further strengthen its partnership with Man Group and distribute a second Man retail fund offering in Australia and New Zealand – the Man Diversified Alternatives Fund.

In all, GSFM’s range of specialist funds management partnerships in the Australian market totals seven. These span Australian equities, global equities, global fixed income, alternative investment strategies, absolute return through global equities and global smaller companies.

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