Insync Global Titans Fund deploys downside protection in the form of buying out-of- the-money index puts (with 60% net asset value covered using index puts for January)
The Insync Global Titans Fund is focused on delivering consistent returns with active management of downside risk.
“The Global Titans fund’s objectives are to provide equity type returns over the long term and to provide some downside protection for investors in the event of a significant correction in the markets.
“We try to avoid a major catastrophe which can be devastating to investors as was seen in 2008/9,” said Monik Kotecha, CIO, Insync Funds Management.
The main risk management tool Insync utilises to manage the downside protection is the use of a dynamic put protection strategy. The Fund deploys downside protection in the form of buying out-of-the-money index puts. The purpose is to cushion the fund from significant losses in the market as witnessed by our significant outperformance in 2011 and 2012.*
In fact, when most of our peers fell during those periods the fund achieved positive returns. The Fund had around 60% of the net asset value covered on a notional basis using index puts as at the end of January.
January proved to be a very volatile month and whilst we did not see a catastrophic fall in the markets the fund performed in line with our expectations when significant downside volatility occurred. The fund generated a return of a +0.2% whilst the broad MSCI index was down -3.3%.
* Table shows Insync outperformance during 2011 and 2012 with the use of index puts to protect against downside movements in portfolio value
Mr Monik Kotecha
CIO
Insync Funds Management
t: (02) 9216 2977
m: 0413 768 480
e: mkotecha@insyncfm.com.au
www.insyncfm.com.au