Global Opportunities Fund Managers Guergana Anguelova Moritz Broelz
Global Opportunities Fund Managers: Guergana Anguelova & Moritz Broelz
Agenda ü Fund Objective ü Fund Guidelines ü Fund Bandwidths ü Asset Allocation Rationale ü Current Asset Allocation ü Current Holdings ü Markowitz Portfolio Optimization ü Benchmarks ü Fund Performance ü Q&A 2
Fund Objective • Global Opportunities Fund, Inc. (“the Fund”) is a non-diversified, closed-end management investment company. • The Fund’s investment objective is long-term capital appreciation and income generation, which it seeks to achieve by investing in equity, debt and derivative securities of all types from issuers around the world. • The fund consists of three security portfolios - equity, debt and derivative, with equal capital base. • The Fund allocates and reallocates capital based upon management selection, and is not limited to specific industries or sectors. • The Fund aims to limit downside risk potential by investing in strategic derivative positions. • The Fund will invest near all, but no less than 90% of its total available capital. • There is no guarantee that the Fund will meet its objectives. 3
Fund Guidelines • General Fund Guidelines – Allocations subject to management selection • Equity Portfolio Guidelines – Focus on capital gains – Flexible time horizons • Bond Portfolio Guidelines – Long Term Income Generation – Long Term Capital Preservation • Derivative Portfolio Guidelines – – Hedge Currency Exposures Limit Equity Downside Risk Generate Steady Income Speculation 4
Fund Bandwidths • General Fund – No more than 10% cash holdings • Equity Portfolio – No more than 10% in a single title issue – No more than 40% in a single fund title • Bond Portfolio – No more than 80% European debt – No more than 80% U. S. debt • Derivative Portfolio – No limitations 5
Asset Allocation Rationale FED ↑ Balance Sheet through Q. E. 2 (…) Buys U. S. Treasuries & MBS U. S. Primary Government Dealers Earnings ↑ U. S. Financials ↑ Positioning Long U. S. Financials, particularly Primary Dealers FED Reserves ↑ Cashflows to Emerging Markets ↑ (Yields) Long Emerging Markets U. S. Monetary Base ↑ U. S. Equity ↑ (LT) Long U. S. Blue Chips U. S. Treasuries ↑ U. S. Dollar ↓ Hedge Currency Exposure Long U. S. Treasuries 6
Current Asset Allocations 7
Current Holdings 8
Markowitz Portfolio Optimization Return & Standard deviation for 2010 Data for current portfolio Data for optimized portfolio 9
Markowitz Portfolio Optimization Allocation of Original Portfolio Allocation of Optimized Portfolio 10
Original vs. Optimized Equity Portfolio Performance of Original Portfolio Performance of Optimized Portfolio 11
Benchmarks 12
Benchmarks 13
Equity Portfolio Performance vs. MSCI World Country Index 14
Fund Performance (excl. Bonds) Large Spreads @ Close has EUR/USD Performance QE 2 starts kicking in: debt Equity European sovereign +large Spread Positions impact on(UST’s Fund up) up, USD down, worries weaken Euro - halts =Performance! exaggerates volatility U. S. Equity advance (in $ terms) – Equity Portfolio appreciates solely due to EUR/USD impact 15
Fund Performance • Derivative Positions maximize returns towards Expiration • Bond Positions held to maturity 16
Questions & Answers 17
Appendix 1 • Fund Spreadsheets Link 18
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