Hereford Funds - Firth Asian Value Fund
July 2012
July 2012 Investment Review
In July 2012 the Fund’s net asset value rose by 3.9% (after deducting all fees and expenses). By comparison the MSCI AC Asia ex Japan Small Cap index was
flat and the MSCI AC Asia ex Japan index rose by 2.6%.
Strong performance from the Fund’s holdings in Pepsi-Cola Philippines, Ramayana (an Indonesian retailer) and Lerado (Hong Kong, manufacturer of babystrollers) assisted returns during the month. Lerado, in a reversal of its profits warning twelve months ago, issued a positive profit alert.
Stock price movements coupled with our review of a number of the Fund’s holdings led to an increase in exposure to eight companies and a reduction in
exposure to five companies. The net impact of these changes, all made for stock-specific reasons, has been to increase the Fund’s exposure to consumer
stocks at the expense of IT stocks and a lower cash position. The impact on country exposure has been less material.
While the economic health of the Eurozone continued to dominate news and comment, in Asia the ongoing end-June results announcement season heralded a
noticeable number of negative surprises and profit warnings. Companies continue to blame higher labour and material costs and weakening demand. Indeed a
lower rate of economic growth across the region is now evident in the data releases and economic authorities have been taking further action to mitigate the
slowdown. Policy interest rates were reduced in China, Korea, the Philippines and Vietnam during July.
Key Information Hereford Funds - Firth Asian Value Fund
NAV A Shares (29/6/12): $91.99
Total Fund Size: $8.5 million
Strategy Assets: $51.0 million (a)
Fund Launch Date: 31/05/11
Performance (%) (net of fees and expenses)
Hereford Funds - Firth Asian Value Fund
MSCI AC Asia ex Japan Small Cap USD Net
MSCI AC Asia ex Japan USD Net
Hereford Funds - Firth Asian Value Fund
MSCI AC Asia ex Japan Small Cap USD Net
MSCI AC Asia ex Japan USD Net
Jan 12
6.1
10.0
10.8
Feb 12
12.1
9.0
6.0
2012
YTD
Mar 12 Apr 12 May 12 Jun 12 Jul 12
-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
14.6
6.6
8.7
Since
Launch
2011*
-8.0
-21.3
-13.2
-19.7
-26.1
-20.2
*June-December
105
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)*
100
95
90
85
80
75
70
65
*Both MSCI benchmark indices (Bloomberg: MSLUAAJN and NDUECAXJ) are net total return indices in USD. MSCI calculates net total return by reinvesting any dividend outcome after
deducting withholding taxes
Country breakdown
Hong Kong/China
Indonesia
Korea
Malaysia
Philippines
Singapore
Thailand
Taiwan
Cash
% of assets
37
6
13
12
4
12
1
11
6
Sectoral breakdown
Consumer Discretionary
Consumer Staples
Financials
Health Care
Industrials
Information Technology
Materials
Cash
% of assets
55
9
6
1
13
8
2
6
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 based upon the investment advice of the
Investment Adviser. 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
Investment Advisor
Promoter
Fund Administrator
Custodian
Legal Advisers
Auditor
Daily
None - income accumulated within the fund
Swiss-Asia Financial Services Pte. Ltd. 8 Temasek Blvd, #43-01 Suntec City Tower 3, Singapore
Firth Investment Management Pte. Ltd. 180 Cecil Street, #13-03 Bangkok Bank Building, Singapore
VP Bank (Luxembourg) S.A., 26 Avenue de la Liberté, L-1930 Luxembourg
VPB Finance S.A., 26 Avenue de la Liberté, L-1930 Luxembourg
VP Bank (Luxembourg) S.A., 26 Avenue de la Liberté, L-1930 Luxembourg
Elvinger, Hoss & Prussen, 2 Place Winston Churchill, L-1340 Luxembourg
Deloitte,560 Rue de Neudorf, L-2220 Luxembourg
Annual Management Charge
Share Class A (b)
Share Class D
Annual Management Charge
1.5%
2.0%
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
Order Transmission Information
Original Applications To:
VPB Finance S.A.
attn. Fund Operations / TA-HFF
P.O. Box 923
L-2019 Luxembourg
or, for transmissions via courier service,
26, avenue de la Liberté, L-1930 Luxembourg
$100,000 initial / $10,000 subsequent
$10,000 initial / $1,000 subsequent
Subsequent Applications Only Via Facsimile:
VPB Finance S.A.
attn. Fund Operations / TA-HFF
Fax:
(+352) 404 770 283
Tel:
(+352) 404 770 260
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 both have UK reporting status and are German tax registered from launch.
(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, 26, avenue de la Liberté, L-1930 Luxembourg or from VPB Finance S.A., 26, avenue de la Liberté, L-1930 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.