2014 August Website: www.octis.com.sg E-mail: Octis.marketing@octis.com.sg Telephone: +65 6500 1188 Fax: +65 6500 1189 Address: 80 Raffles Place #24-21 UOB Plaza 2, Singapore 048624 Monthly Net Returns (%) AUD Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2012 1.23 0.62 1.86 2013 1.17 -0.07 -0.59 0.90 1.49 -2.07 0.52 -0.09 0.51 0.66 -0.07 0.94 3.30 2014 0.84 -0.65 0.51 -1.81 -0.22 1.38 0.86 0.35 1.23 Monthly Net Returns (%) USD Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2013 1.01 -0.22 -0.78 0.70 1.35 -2.21 2.73 -0.05 0.53 0.48 -0.24 0.74 4.02 2014 0.64 -0.83 0.37 -2.13 -0.45 1.19 0.84 0.22 -0.18 Monthly Net Returns (%) EUR Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2007 0.62 0.37 1.00 2008 -0.03 -0.59 -0.98 0.08 -0.19 -1.36 -0.46 -1.56 -0.69 -1.25 -0.58 -0.12 -7.48 2009 4.02 2.42 -2.29 6.88 3.94 -1.49 2.99 1.42 2.37 -1.43 0.93 0.94 22.31 2010 0.79 -0.19 2.84 -0.72 -0.56 0.51 -0.20 0.00 -0.52 0.78 0.67 0.07 3.46 2011 -0.12 -0.19 1.56 2.06 -0.50 -0.11 1.16 0.42 -1.51 2.01 -0.81 -0.35 3.60 2012 1.36 0.93 -0.24 -1.61 -0.63 1.15 -0.05 0.58 0.63 -0.02 1.02 0.59 3.72 2013 0.95 -0.22 -0.85 0.73 1.33 -2.24 -0.14 -0.08 0.45 0.49 -0.25 0.72 0.86 2014 0.66 -0.80 0.36 -2.11 -0.46 1.20 0.85 0.22 -0.11 EUR Class Last 12 months Since Inception Net Returns (%) 1.31 3.68* Volatility (%) 3.13 4.98* Return / Volatility 0.42 0.74 Max Drawdown (%) -3.38 -7.48 AUD Class Last 12 months Since Inception Net Returns (%) 3.30 3.50* Volatility (%) 2.99 3.24* Return / Volatility 1.11 1.08 Max Drawdown (%) -2.17 -2.17 USD Class Last 12 months Since Inception Net Returns (%) 1.33 3.83* Volatility (%) 3.16 3.96* Return / Volatility 0.42 0.58 Max Drawdown (%) -3.02 -3.02 EUR AUD USD 1 Month Return (%) 0.22 0.35 0.22 YTD Return (%) -0.11 1.23 -0.18 Returns since Inception (%) 28.01 6.51 3.83 Average YTD AuM (USD) 1.43m 10.83m 28.24m Performance Data *Annualized, including 2008 Investment Strategy The funds principal objective is to generate stable long term capital gains above the money market returns with a low level of volatility. This objective will be achieved by running a multi- strategy portfolio that employs a selection of non-correlated strategies to invest and trade opportunistically in the Asia Pacific markets. Despite markets turmoil, Octis succeeded in posting a positive performance whilst dramatically reducing the Volatility of the P&L (5.3% since October 2007). The components of the multi strategy consist of (1) Asian Equity, (2) Asian Volatility and (3) Discretionary Overlay to help master global risks. The fund has exposure to the FX and Equity markets through Spots, Stocks, Futures, Convertible Bonds and Options. OCTIS Asset Management Octis Asia Pacific Fund 2014 Asian equity markets, along with global markets, have been toppish for the last few months exhibiting swings around a major resistance. The MSCI Asian-ex Japan benchmark fall 3.5% at the beginning of the month before recouping its losses. In this context, our fund posted a positive return of 0.22% (0.35%) in EUR (AUD). Our long-short equity strategy (the alpha engine of our fund) worked very well, our convertible book delivered mild positive returns too but our quantitative beta suffered from these quick swings with a loss giving back some of the last months performance. All in all, the objective remains the same: being able to deliver combined stable returns irrespective of the market regime thanks to the management of three orthogonal strategies.
So why do we attend such a market behavior in Asia? From a top-down perspective, re-acceleration in global growth and in capex should lend support to Asian equity markets. However, the issue remains that this better growth picture holds true for the US mainly while pro-growth policies implemented elsewhere face structural challenges. Indeed, Europe is on the verge of deflation with sub-par growth, high and persistent unemployment which dents on its external demand and thus on Asian exports. Japan is experiencing the limits of Abenomics with an ageing population and large unbalances in its budget and trade balances. Last, China is trying to engineer a repositioning of its growth model and to digest historical misallocation of capital even though we observe a bottoming out as evidenced in industrial production or exports recent performance.
The second risk looming on global markets is the normalization in US monetary policy with the strengthening of the US dollar. Historically, this has proven to be bad omen for Asian equities. Now, since the Jackson Holes speech, ECB governor M. Draghi made clear that the ECB will implement bold measures to boost Europe growth while its seems that policy-makers in Japan will do whatever it takes to achieve the inflation target they set. Hence, global liquidity should remain abundant and provide a relay when the US tapering off is fully completed.
For these reasons, and in order to prevent from any Volatility accident, we stay cautious. Being aggressively short is exposed to the risk of sustained high global liquidity (the money stock argument), being aggressively long is exposed to the risk of a swift and violent global equity deleveraging due to the normalization in US monetary policy (the money flow argument).
Consequently, in such a market, we are forced to walk on tip toes and to wait for clear signals before we can adjust our portfolios. Therefore, we continue to deploy most of our Capital on the Long Short Market Neutral strategy.
Commentary Website: www.octis.com.sg E-mail: Octis.marketing@octis.com.sg Telephone: +65 6500 1188 Fax: +65 6500 1189 Address: 80 Raffles Place #24-21 UOB Plaza 2, Singapore 048624 Asian Equity 54% Asian Volatility 27% Overlay 13% Cash 6% Strategic Allocation (in %AuM) @ Aug 2014 August 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% J u l - 0 8
O c t - 0 8
J a n - 0 9
A p r - 0 9
J u l - 0 9
O c t - 0 9
J a n - 1 0
A p r - 1 0
J u l - 1 0
O c t - 1 0
J a n - 1 1
A p r - 1 1
J u l - 1 1
O c t - 1 1
J a n - 1 2
A p r - 1 2
J u l - 1 2
O c t - 1 2
J a n - 1 3
A p r - 1 3
J u l - 1 3
O c t - 1 3
J a n - 1 4
A p r - 1 4
J u l - 1 4
Volatility: Octis vs Major Equity Markets Octis Eur 12m Volat. MSCI World Index ASX 200 Index MSCI Asia Pacific Index OCTIS Asset Management Octis Asia Pacific Fund 2014 Comparison to Benchmarks * AUD Class Inception: 01 November 2012; USD Class Inception: 01 January 2013 EUR Class AUD Class* USD Class* Euribor 3M Eureka Hedge MSCI Asia Pacific 1 Month 0.22% 0.35% 0.22% 0.02% 0.60% -0.63% 3 Months 2.29% 2.62% 2.27% 0.06% 3.22% 4.33% 6 Months 0.03% 1.04% 0.01% 0.14% 4.54% 7.31% 1 Year 1.31% 3.30% 1.33% 0.26% 7.35% 13.62% 2 Years p.a 1.49% - - 0.24% 6.42% 12.08% 3 Years p.a 1.24% - - 0.52% 2.93% 5.78% Since Inception p.a 3.68% 3.50% 2.28% 1.48% 1.00% -2.12% Since Inception EUR Class AUD Class* USD Class* Euribor 3M Eureka Hedge MSCI Asia Pacific Net of Fees Returns 28.01% 6.51% 3.83% 10.55% 7.01% -13.65% Annualized Average Return 3.68% 3.50% 2.28% 1.48% 1.00% -2.12% Annualized Volatility 4.98% 3.24% 3.96% 0.45% 7.75% 19.76% Returns / Volatility 0.74 1.08 0.58 3.25 0.13 -0.11 12 Months Return 1.31% 3.30% 1.33% 0.26% 7.35% 13.62% 12 Months Volatility 3.13% 2.99% 3.16% 0.01% 4.24% 9.59% Average Positive Month 1.29% 0.86% 0.90% 0.12% 1.64% 4.00% Average Negative Month -0.71% -0.70% -0.87% - -1.85% -4.43% Sortino Ratio** 4.23 0.89 2.48 - 0.21 -0.63 Standard Dev. of Downside 0.64% 0.80% 0.85% - 1.46% 4.47% Correlations to EUR Class 0.42 0.08 ** Sortino Ratio calculated using the monthly 3 mth Euribor Octis Asset Management Pte Ltd (OCTIS) is regulated as a Registered Fund Management Company by the Monetary Authority of Singapore (MAS) and is exempt from the requirement to hold a capital markets services license. Octis Asset Management Pte Ltd is subject to MAS registration requirements which include serving not more than 30 qualified investors and managing assets the aggregate of which does not exceed $S 250M.This presentation and the information included herein is for general information purposes only and does not constitute an offer to sell or solicitation of an offer to purchase any security, any commodity futures contract or commodity-related product, or any advisory or trading management service described herein. By viewing this presentation you agree to be bound by the Terms and Conditions of Use. This material is intended as a general outline only and is not a definitive statement on the subject matter. It is not intended for public use or distribution. This presentation should not be regarded as investment advice or financial product advice and should not be relied upon as such. In making any investment decision, prospective investors must rely on their own examination of the merits and risks involved. The information contained in this document is subject to change without notice. Any research or analysis used to derive, or in relation to, the information has been procured from sources deemed reliable by OCTIS for its own use, without taking into account the investment objectives, financial situation or particular needs of any specific investor. The fund mentioned in this presentation are suitable for professional or institutional investors only. All investment involves risk and past performance is not indicative of future results. Our investment management services relate to a variety of investments, each of which can fluctuate in value. The value of funds and portfolios we manage may fall as well as rise, and the investor may not get back the full amount originally invested. The loss on realization or cancellation may be very high including total loss of investment, as the value of such an investment may fall suddenly and substantially. Access to information about the fund is limited to investors who qualify as accredited, expert and institutional investors as defined under the Securities and Futures Act and Financial Advisers Act of Singapore, and the funds are not intended for the public in Singapore. The information memorandum is not a prospectus as defined in the Securities and Futures Act. Accordingly statutory liability under that Act in relation to the content of prospectuses would not apply.
Funds Information Website: www.octis.com.sg E-mail: Octis.marketing@octis.com.sg Telephone: +65 6500 1188 Fax: +65 6500 1189 Address: 80 Raffles Place #24-21 UOB Plaza 2, Singapore 048624 Fund Strategy Multi-Strategy, Asian Equity, Low Volatility Management Fee 2% Denomination EUR, with USD and AUD classes Performance Fee 20% with Historical High Water Mark EUR Class Inception 01 October 2007 Redemption Notice 30 Calendar Days Fund AuM USD 41m (EUR 31.2m) Initial / Redemption Fees None Minimum Subscription 500,000 either EUR, USD, AUD Lock-up Period None August