Aitken Investment Management's (AIM) Global High Conviction Fund is managed by Charlie Aitken who has 25 years of experience in financial markets. In December 2018, AIM Global High Conviction fund generated a negative return of 6.25 percent in its long-short strategy. Further, the global equity market witnessed a substantial fall in December with the MSCI World Equity Index down by 7.7 percent, primarily driven by the US S&P500 Index which lost 9%. The S&P500 experienced worst December since 1931 with the biggest monthly loss in nearly a decade. In the calendar year 2018, the company suffered a loss of 23.8 percent with an FY19 YTD loss of 17.6%.
In its announcement, the company informed that it is appearing that the outperformance of US equities in US Dollars is coming to an end as the company is looking at the start of a “re-coupling” of US assets to the rest of the world.
The company also informed that there is a growing likelihood that both US equities and the US Dollar have peaked for the cycle. On this basis, currently, the fund is effectively hedged to the Australian Dollar due to which the fund suffered a loss in December; although, it is now supporting the performance of the company. The company has lowered its US equity exposure and utilized the January bounce in US equities to re-initiate some short index positions. The company believes that the pending US earnings season will hold very few big positive surprises, while conversely, revenue and margins could disappoint.
In the November month, the fund had generated a negative return of 0.23%. During November, the company added Ping An, Tencent, Hong Kong Exchanges & Clearing, Alibaba, Autohome, and Travelsky to the Fund. The company also increased its investment in Boeing in the wake of the 737 MAX crash off Indonesia. Further, the company added Woodside Petroleum to the Fund’s portfolio on the view that energy prices are bottoming, while the company took profits in Qantas Airways on that same view.
With the recent speculation of additional stimulus measures by the Chinese policymakers, AIM is optimistic about its returns in CY 2019. Further, the company is expecting that the US Stocks will struggle in 2019 as the company quoted the example of Apple, whose revenues declined in 2018.
Aitken Investment Management is 100 percent owned by the principals and staff, and its Chief Investment Officer, Charlie Aitken is considered one of Australia’s leading macroeconomic forecasters and stock pickers. Aitken Investment Management does not intend to replicate the returns of the MSCI World Index; instead, they make their own stock decisions based on where they see the opportunity set. AIM views itself as a global long/short absolute return fund with an objective to compound capital and implements trading strategies aimed at minimizing capital losses.
AIM’s Fund follows a medium-term “top-down meets bottom-up” strategy, and it employs stop-loss parameters that limit the capital drawdown of any losing investment.
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