Macro Currency Group
Principal Global Investors Funds
Global Time Diversified Absolute Return Fund
Fund Focus
Potential for an uncorrelated return stream using currency as a global macro view
Blending two complementary, yet distinct, fundamental strategies with the goal of generating a
stable, positive, return stream, regardless of the prevailing investment environment.
The Global Time Diversified Absolute Return Fund is part of the Principal Global Investors Funds range of Dublin-based UCITS, and
is registered in most major European countries and in Singapore, where it is registered as a restricted scheme. The Fund aims to
provide a consistent stream of positive returns in excess of USD three-month LIBOR (London Inter-Bank Offer Rate), as calculated
by the BBA (British Bankers Association), over a three- to five-year horizon, by solely investing in developed market currencies.
Why Global Time Diversified Absolute Return?
Why Invest Now?
• Attractive risk-adjusted returns. The Fund is designed
for absolute return investors looking for a source of lowly
correlated alpha. It aims to provide diversification across
a range of factors to produce stable, attractive, riskadjusted returns over the medium to long term.
Given inflation, political uncertainty, changing monetary
policy, and fragmented global growth, global macro
currency investing is likely to be a key investment style
in the coming months and years.
• Traditional asset classes face headwinds from these
factors as well as high valuations and rising interest
rates. Adding an active liquid alternative manager can
provide needed diversification to reduce portfolio risk
in these challenging times.
• Low correlation with other asset classes. The strategy
has exhibited low correlations with fixed-income, equity,
and commodity markets, as well as many hedge funds.
• A single vehicle providing high liquidity, transparency,
• Changing global macro factors can create alpha
and diversification across multiple factors. The Fund
opportunities for an experienced, active, liquid
adopts a highly transparent, highly liquid, fundamentally
alternative manager. High liquidity in currencies allow
driven investment process managed within a strict and
managers the flexibility to pursue these opportunities
rigorous risk management framework. It also offers
while improving overall portfolio risk-adjusted return.
strong diversification benefits as it combines a multiple,
macro-themed approach with
the broad systematic allocation,
Global Time Diversified Absolute Return Fund compared to traditional
with differing style, trading focus,
and alternative indices
and time horizons.
• Investor-friendly profile.
The Fund features include a
transparent investment process,
a liquid investment universe,
daily dealing, and no entry/exit
fees, gates, or side-pockets.
Risk-adjusted return and correlation to global equities. One-year numbers as of 12/31/16.
Risk-Adjusted Return
• Medium volatility profile. The
Fund is designed to provide a
medium level of risk.
1.00
Global Time Diversified
Absolute Return Fund
0.50
U.S. Fixed Income
Global Equities
Commodities
Global Macro
0.00
-0.50
Currency
-1.00
-1.50
-1.00
-0.80
-0.60
-0.40
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
Correlation with Global Equities
Global equities are represented by the MSCI World (TR) Index, U.S. fixed income is
represented by the CITI US Broad Investment Grade Index, Currency is represented by the
Parker FX Index, and Commodities are represented by the S&P/GS Commodities (TR) Index.
Past performance is not indicative of future results.
Macro Currency Group | Principal Global Investors Funds - Global Time Diversified Absolute Return Fund
Portfolio management team
Mark Farrington
29 years of industry
experience
19 years of
firm experience
Ivan Petej, Ph.D
14 years of industry
experience
10 years of
firm experience
Why Invest in this Fund?
• Highly experienced investment team: With an average of 20 years of experience
in financial markets, the Fund’s portfolio managers have invested in and navigated
numerous market cycles, significant economic shifts, and a wide range of geopolitical
developments. This experience is enhanced by the skills and knowledge of our
strategists and traders, all of whom are focused on supporting the Fund’s portfolio
managers.
• A Fund that embraces the original thesis of alternative investing: The Fund’s
design returns to the original thesis of alternative investments: to provide a
consistent return stream, regardless of prevailing market conditions, that is lowly
correlated with market beta. The Fund aims to achieve that goal by blending the
implementation of two complementary, yet distinct, fundamental strategies. This
diversification of return drivers creates multimanager-like characteristics in a single
manager fund without overdiluting.
• An innovative investment process embedded within a rigorous risk management
framework: The two underlying strategies within the Fund offer diversification across
multiple factors: investment style (discretionary vs. systematic), investment focus
(disconnects between macro fundamentals and price vs. global growth capture) and,
importantly, timeframe (one month to six months vs. greater than one year). We
believe this approach helps generate a return that is not only powerful on its own but
also has the potential to offer diversification characteristics when held within a wider
portfolio. The Fund’s investment process is embedded within, and supported by, a
sophisticated risk management framework including a bespoke suite of analysis and
portfolio construction tools, liquidity filters, and stop-loss signaling.
• A true liquid alternative: Due to the relative nature of currency investments and the
unique style of investing, the Fund offers a truly uncorrelated and diversifying source
of alpha, hard to match in other asset classes or alternative vehicles. The Fund invests
solely in the most liquid instruments globally, thereby offering daily liquidity in any
prevailing market environment.
Important Information
This document is for investment and business professionals only which include
Professional Clients and Eligible Counterparties as defined by the FCA. The
Principal may not forward this document themselves to retail clients.
Principal Global Investors, LLC has been appointed as Investment Advisor to
the Fund and has appointed Principal Global Investors (Europe), Ltd as the
Sub-Investment Advisor.
The information in this document has been derived from sources believed to
be accurate as of March 2017. Information derived from sources other than
Principal Global Investors or its affiliates is believed to be reliable; however,
we do not independently verify or guarantee its accuracy or validity.
The information in this document contains general information only on
investment matters and should not be considered as a comprehensive
statement on any matter and should not be relied upon as such nor should it
be construed as specific investment advice, an opinion or recommendation.
The general information it contains does not take account of any investor’s
investment objectives, particular needs or financial situation, nor should it be
relied upon in any way as a forecast or guarantee of future events regarding
a particular investment or the markets in general. All expression of opinion
and predictions in this document are subject to change without notice.
Any reference to a specific investment or security does not constitute a
recommendation to buy, sell, or hold such investment or security. The value of
units may fall as well as rise as a result of market movements as well as currency
fluctuations. Past performance is not a reliable indicator of future performance
and should not be relied upon as a significant basis for an investment decision.
You should consider whether an investment fits your investment objectives,
particular needs and financial situation before making any investment decision.
For European readers only: Before investing, investors should obtain and read
a copy of the prospectus and the KIID, which provide full details of the risks of
investing in the Fund. These are available at principalglobalfunds.com.
This document is issued in: The United Kingdom by Principal Global Investors
(Europe) Limited, Level 1, 1 Wood Street, London, EC2V 7JB, registered
in England, No. 03819986, which has approved its contents, and which is
authorized and regulated by the Financial Conduct Authority; Singapore by
Principal Global Investors (Singapore) Limited (ACRA Reg. No. 199603735H),
which is regulated by the Monetary Authority of Singapore and is directed
exclusively at institutional investors as defined by the Securities and Futures Act
(Chapter 289); Hong Kong by Principal Global Investors (Hong Kong) Limited,
which is regulated by the Securities and Futures Commission and is directed
exclusively at professional investors as defined by the Securities and Futures
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registered in the Dubai International Financial Centre and authorized by the
Dubai Financial Services Authority (“DFSA”) as a representative office and is
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This document is intended for sophisticated institutional and professional
investors only. Principal Global Investors: Representative Office. Mandatory
Disclosure: DFSA Representative Office, Module 4.6.5.(d). This document
relates to a financial product which is not subject to any form of regulation
or approval by the DFSA. The DFSA has no responsibility for reviewing or
verifying any prospectus or other documents in connection with this financial
product. Accordingly, the DFSA has not approved this document or any other
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Prospective purchases should conduct their own due diligence on the financial
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is intended for sophisticated institutional and professional investors only.
Principal Global Investors is the asset management arm of the Principal Financial
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© 2017 Principal Financial Services, Inc. | MM9168 | 03/2017