A Super Return Fund?

There was a report on Wednesday’s (13th April) edition of The Straits Times about the staggering returns that a novice fund produced in 2009 (Novice investment fund outperforms big guns). I decided to check out that fund’s website.

According to the article, the fund was named by Thomson Reuters as the “best performing Singapore-registered fund”. The fund returned 155% in 2009 vs the 30% produced by the MSCI Asia index. The article also mentioned about the good individual returns produced by the fund managers from “over the six years to September 2007″. There was no mention of the 2008 returns. The following are the returns listed on the website.

In 2008, the fund was down 62% whereas the ‘benchmark’ was down 42%. Suddenly, the fund does not seem to be that super.

And that MSCI Asia Index. I cannot remember an MSCI index called ‘MSCI Asia’. A fast check on the MSCI website seem to indicate that the MSCI AC Asia index is used. Is is a correct index to be benchmarked against? I do not think so. There was no fund factsheet or prospectus on the website and thus there was no fund mandate to be found. Maybe the fund has a ‘free’ mandate and hence, there is no suitable benchmark. However, from the information found, this fund seem to have a Singapore small to mid cap bias. Thus, I would feel that the FSTE ST Mid-Cap Index would be a better benchmark. This index was down 57.9% in 2008 and up 95.6% in 2009.

Overall, the Straits Times report seem to have reported only the good but not the bad. Do take media reports with a pinch of salt.

Related Posts

Tags: Investment Blunder