Close Wealth Management adds Canadian dollar class to All Weather Fund

Date: Tuesday, August 5, 2008
Author: Hedgeweek.com

Close Wealth Management Group has launched a Canadian dollar class to its Close All Weather Fund, providing a fourth currency option alongside the established sterling, euro and US dollar classes, which collectively have more than USD270m in assets.

'We have recognised an opportunity for an investment solution to satisfy institutions and expatriate clients with Canadian dollars who require international exposure to the major asset classes, while hedging the currency risk,' says Rex Cowley, Close Wealth Management Group's head of high net worth and international marketing.

'The launch of the Canadian dollar class demonstrates our agility in responding to investor demand. The Close All Weather methodology follows our multi-asset, multi-style and multi-manager investment approach, which provides diversification while offering access to leading investment specialists globally. We aim to provide investors with positive real returns over the longer term at reduced levels of volatility.'

The new fund follows the All Weather methodology of neutral asset allocation, with 25 per cent of the portfolio allocated to each of equities, bonds, property and alternatives, but the manager is unfettered in geographic and currency allocation. Returns for the Canadian dollar class will be regularly hedged back into local currency.

Back-testing of the All Weather methodology, using global indices as asset class proxies, hedged back into Canadian dollars, supports the All Weather principle of enhanced returns with lower levels of volatility and downside deviation.

Using data from the past 14 years, the Canadian dollar global model would have generated an annualised return of 7.9 per cent net of fees with annualised volatility of 7.5 per cent. Over the testing period the maximum drawdown for the fund would have been 7.7 per cent, compared with 31.7 per cent for equities, 30.9 per cent for property, 7.5 per cent for bonds and 6 per cent for hedge funds.

'We are very excited to be launching this new class within our All Weather range,' says chief investment officer Mark Bray. 'Investing globally broadens the opportunity set for generating returns for our investors.

'In recent market conditions the success of the All Weather principle and the benefits of our style and manager selection have clearly been in evidence, reinforcing the attractions of All Weather within client portfolios. We are confident that this new global All Weather class will attract further significant client interest over the coming months.'

The Canadian dollar share class has a minimum investment level of CAD20,000 and deals weekly. The annual management fee of 1.6 per cent is reduced to 1.1 per cent if the net asset value falls month-on-month. All income and capital gains are rolled up within the fund, offering potential growth and tax benefits to some investors.

Close Wealth Management Group specialises in the enhancement, protection and management of individual and corporate wealth in the UK and internationally. Its services range from individually tailored solutions to generic structures and include investment management, tax services, financial education and planning, private banking, trust and company administration, pensions, custody, insurance, and corporate and fund administration.

The group manages and administers assets totalling GBP11.5bn for clients including private individuals, trusts, charities, corporations, small to medium sized institutions and professional intermediaries and employs more than 500 people offices in the UK, Jersey, Guernsey, the Isle of Man and South Africa. It is part of Close Brothers Group, which was established in 1878 and is the largest independent UK merchant bank listed on the London Stock Exchange.