Global Equities (Long Short): Platinum shorts when it counts

A minimum exposure to financials and commodities, resource stocks in particular, helped Platinum Asset Management take out the Global Equities (Long Short) category for its International Fund.

The fund returned -0.4 per cent for the 12 months to March 2009, compared with a return of -25.2 per cent for the MSCI All Country World Index.

Platinum’s Investor Services Supervisor Justin Cameron said the collapse in share prices of financial entities was a major contributor to the fall in global share markets, and the fund benefited by maintaining a minimal exposure to this large sector.

“Furthermore, commodity stocks performed poorly as commodity prices collapsed, after being a favourite at the start of the year, and again the fund benefited by having a minimal exposure to this sector.”

He attributed the fund’s performance to holding short positions against a range of market indices and individual stocks throughout the year, as well as holding substantial cash reserves.

Scaling back its commodities exposure, particularly resource stocks, and avoiding financial stocks, was also the key to the performance of finalist, Five Oceans Asset Management.

This strategy enabled Five Oceans to produce a return of -10.31 per cent out of their World Fund, compared to a market performance of between -25 and -40 per cent.

Other finalist Colonial First State used shorting strategies opportunistically to drive returns of -10.30 per cent for its Global Resources Long/Short Fund over the one-year period.