Hereford Funds – Firth Asian Value Fund
August 2015
August 2015 Investment Review
In August 2015 the total return of the Fund after deducting all fees and expenses was -7.6%. By comparison the total return of the MSCI AC Asia ex
Japan Small Cap index was -10.1% and the total return of the MSCI AC Asia ex Japan index was -9.8%.
Key Information Hereford Funds – Firth Asian Value Fund
NAV A Shares (31/08/2015):
Total Fund Size:
Strategy Assets:
Fund Launch Date:
$101.2
$ 37 million
$159 million(a) ( as of 1 Sep 2015)
31/05/11
Performance (%) (net of fees and expenses)
Jan
Feb
Mar
HFFAVF1
Small Cap2
Asia ex Japan
3
HFFAVF1
Small Cap2
Asia ex Japan
3
HFFAVF1
Small Cap2
Asia ex Japan
HFFAVF1
2
Small Cap
Asia ex Japan
HFFAVF1
3
3
2
Small Cap
Asia ex Japan3
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2011
-
-1.2
-2.4
-2.3
0.6
2.8
1.1
-8.5
-11.4
-9.9
-12.6
-16.3
-13.2
6.4
10.1
12.0
-5.9
-8.7
-8.3
0.8
-1.2
0.6
-19.7
-26.1
-20.2
-
-
-
-
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2012
6.1
10.0
10.8
12.1
9.0
6.0
-1.4
-3.8
-3.1
-0.9
-1.7
0.0
-5.9
-7.8
-9.6
0.9
1.8
3.0
3.9
0.0
2.6
4.2
2.2
-0.5
3.1
6.7
7.0
2.2
-1.1
-0.3
-0.2
2.9
2.8
3.3
3.5
3.1
29.6
22.4
22.4
Jan
Feb
Mar*
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2013
3.8
3.5
1.7
1.9
1.6
-0.1
2.0
0.5
-2.2
1.0
2.6
1.8
0.4
1.2
-1.3
-4.8
-8.7
-5.7
0.9
0.8
1.8
-1.9
-2.5
-1.5
2.9
6.2
5.4
1.0
2.7
4.4
0.7
-0.9
0.2
0.7
0.2
-1.1
8.7
6.9
3.1
Jan#
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2014
-2.1
-1.7
-4.7
0.9
3.8
3.5
-0.9
1.2
1.0
1.1
0.2
0.7
1.3
3.0
4.0
0.0
1.8
2.3
0.9
1.4
3.8
2.3
1.7
0.7
-3.0
-3.6
-5.9
-1.2
-1.9
2.0
-1.8
-1.4
0.3
-0.9
-1.9
-2.1
-3.4
2.3
4.8
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2015
0.3
2.2
2.5
2.0
1.8
1.9
0.9
1.4
0.4
4.0
9.8
7.2
-1.0
1.3
-2.6
-1.5
-5.2
-3.7
-4.3
-8.5
-6.3
-7.6
-10.1
-9.8
HFFAVF1
Small Cap2
Asia ex Japan3
Source: Bloomberg, Firth Investment Management
1. Hereford Funds – Firth Asian Value Fund 2. MSCI AC Asia ex Japan Small Cap USD Net Index
* Month end date used is March 28, 2013.
# Month end date used is January 29, 2014.
-7.3
-8.5
-10.9
Since Launch
1.2
-9.5
-6.0
3. MSCI AC Asia ex Japan USD Net Index (large and mid cap)
August witnessed the further deflation of the mainland China stock markets bubble – a gathering storm in June/July broke over China and shook
the world’s financial markets. China small cap equities fell 15%, (none of our markets had positive returns in August), the currency was
unexpectedly devalued by 2% on August 11th (which set off the slide in prices everywhere), and short term interest rates were lowered by 0.25%
to provide some respite after government intervention in the equity markets floundered (at a cost of US$100bn). Currencies across the region
declined (led by Malaysia which fell 9% vs the USD, the “best” outturn was the Korean Won, -2%), and remain under pressure. Our fund’s
performance was resilient, although a drop in NAV of 13% over 3 months is never a happy experience.
The handling of the crisis in mainland China’s stock markets and related policy decisions from the Chinese government have highlighted some of
their political shortcomings. The Chinese RMB is vulnerable to further devaluation, probably by a much larger amount than was implemented in
August and how this is handled by the Chinese government will be important for currency and stock markets region-wide in the coming months.
We are confident of the long term opportunity for positive returns in Asia. As we move through the consequences of structural change in China,
we remain alive to the opportunities at the stock level and the interesting prices which are already emerging.
Hereford Funds - MSCI AC Asia ex Japan Small Cap USD Net
HF FAVF
MSCI AC Asia ex Japan Small Cap USD Net (Rebased)*
MSCI AC Asia ex Japan USD Net (Rebased)*
125
120
115
110
105
100
95
90
85
80
75
70
65
Source: Bloomberg, Firth Investment Management
*Both MSCI benchmark indices (Bloomberg: MSLUAAJN and NDUECAXJ) are net total return indices in USD. MSCI calculates net total return by reinvesting any
dividend income after deducting withholding taxes.
Country breakdown
Hong Kong/China
Indonesia
India
Korea
Malaysia
Philippines
Singapore
Taiwan
Thailand
Others
Cash
% of assets
30
4
11
9
1
6
15
9
2
0
12
Sectoral breakdown
Consumer Discretionary
Consumer Staples
Financials
Health Care
Industrials
Information Technology
Materials
Telecommunication Services
Others
Cash
% of assets
35
10
8
0
14
14
2
5
0
12
Investment Objective
Hereford Funds - Firth Asian Value Fund is to generate long term capital growth from a portfolio of listed company securities in Asia (ex-Japan). The Compartment will
follow a value-based investing approach and will have a bias towards smaller capitalisation stocks.
The Compartment will directly invest primarily in shares of companies located in, incorporated in, headquartered in, listed on exchanges in or with significant
operations in or significant income derived from Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, the PRC, Singapore, Taiwan and Thailand. The
Compartment may also directly invest in smaller or developing economies in Asia such as Bangladesh, Cambodia, Laos, Pakistan, Sri Lanka or Vietnam. The
Compartment will not invest in China A Shares when investing in the PRC.
The Compartment will directly invest actively in a diversified portfolio of listed equity securities. The Compartment will generally only invest in securities admitted to
official listing on a recognized stock exchange, or dealt in on another regulated market. Although the Compartment intends to invest in a portfolio of not less than 40
stocks and not more than 100 stocks, it is not restricted in or subject to any material concentration or diversification restrictions, and may hold a more limited number of
investment positions.
The Compartment will typically be near fully invested but may hold liquid assets on an ancillary basis. Under normal market conditions, investment in liquid assets and
debt instruments of any kind will not exceed 15% of the Compartment's net assets. In exceptional market circumstances and on a temporary basis only, this limit may
be increased to 100% with due regard to the principle of risk spreading.
The Investment Manager intends to meet the Fund’s objective primarily through stock selection and country allocation. Typically stocks will be bought and held. This is
not a trading strategy and it is not intended to attempt to time general market movements. While portfolio returns will be measured against the Benchmark Index,
portfolio management will not be constrained by reference to the index.
Fund Codes
Bloomberg
ISIN
Reuters
Sedol
Valoren
WKN
HFIRASA LX *
LU0618975774
NA
B64KS81
12853411
A1H9V4
* Share Class A
Fund Details
Dealing Day
Dividends
Investment Manager
Management Company
Fund Administrator
Custodian
Legal Advisers
Auditor
Annual Management Charge
Share Class A
Share Class D
(b)
1.5%
2.0%
Daily
None - income accumulated within the fund
Firth Investment Management Pte. Ltd. 180 Cecil Street, #13-03 Bangkok Bank Building, Singapore
BSI Fund Management S.A., 44F rue de la Vallée, L-2661 Luxembourg
UBS Fund Services, 33A, Avenue J.F.Kennedy, L-1855 Luxembourg
BSI Europe S.A., 122 rue Adolphe Fischer, L-1521 Luxembourg
Elvinger, Hoss & Prussen, 2 Place Winston Churchill, L-1340 Luxembourg
Deloitte Audit S
60 Rue de Neudorf, L-2220 Luxembourg
Annual Management Charge
Performance fee:
High water mark?:
Hurdle rate:
10%
Yes
MSCI AC Asia ex Japan Small Cap USD Net
Minimum Investment
Share Class A (b)
Share Class D
$100,000 initial / $10,000 subsequent
$10,000 initial / $1,000 subsequent
Order Transmission Information
Original Applications To:
Subsequent Applications Only Via Facsimile:
UBS Fund Services
Attn. Transfer Agent
33A, Avenue J.F. Kennedy
L-1855 Luxembourg
UBS Fund Services
Attn. Transfer Agent
Fax: (+352) 4410106417
Tel: (+352) 4410106404
e-mail: [email protected]
(a) This refers to the total assets to which the Investment Adviser applies the reference strategy.
(b) Share Class A: these shares have UK reporting since launch and are registered with the BaFin for public distribution in Germany from 17/10/12.
Germany – Paying Agent as defined by German Regulation:
Marcard, Stein & Co – Ballindamm 36, 20095 Hamburg; Phone: +49/40.32.099.556, Fax: +49/40.32.099.206
(c) Share Class D: these shares have not yet been launched.
This document is for information purposes and internal use only. It is neither an advice nor a recommendation to enter into any investment.
Investment suitability must be determined individually for each investor, and the financial instruments described above may not be suitable for all investors. This
information does not provide any accounting, legal, regulatory or tax advice. Please consult your own professional advisers in order to evaluate and judge the matters
referred to herein.
An investment should be made only on the basis of the prospectus, the annual and any subsequent semi-annual-reports of HEREFORD FUNDS (the "Fund"), a
société d'investissement à capital variable, established in Luxembourg and registered under Part I of Luxembourg law of 20 December, approved by the Commission
de Surveillance du Secteur Financier (CSSF). These can be obtained from [the Fund, 44F rue de la Vallée L-2661 Luxembourg or from BSI Fund Management S.A.,
44F rue de la Vallée, L-2661 Luxembourg and any distributor or intermediary appointed by the Fund].
No warranty is given, in whole or in part, regarding performance of the Fund. There is no guarantee that its investment objectives will be achieved. Potential investors
shall be aware that the value of investments can fall as well as rise and that they may not get back the full amount invested. Past performance is no guide to future
performance.
The information provided in this document may be subject to change without any warning or prior notice and should be read in conjunction with the most recent
publication of the prospectus of the Fund. Whilst great care is taken to ensure that information contained herein is accurate, no responsibility can be accepted for any
errors, mistakes or omission or for future returns.
This document is intended for the use of the addressee or recipient only and may not be reproduced, redistributed, passed on or published, in whole or in part, for any
purpose, without the prior written consent of HEREFORD FUNDS. Neither the CSSF nor any other regulator has approved this document.