Introduction to HAHN. march 2013
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Transcript of Introduction to HAHN. march 2013
HAHN ETF Managed Portfolios
A tactical, global macro approach to ETF investing
HAHN Investment Stewards: Overview
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Performance
Process
Portfolio Construction
People and Philosophy
Global Macro Experience
Wilfred J. Hahn, Chairman and Co-Chief Investment Officer
Over three decades of international investment industry experience as global strategist, portfolio
manager, business head. Former Head of Royal Bank Global Investment Group, managing
pension, mutual and private client portfolios with global assets > $13 Billion (CAD).
Mark Arthur, CFA, Chief Executive Officer and Director
Up until 2002, Mark was President, CIO and Director of RBC Global Investment Management
Inc., Vice President Investments and Director of Royal Mutual Funds and Chairman of RBC
Investments Global Investment Strategy Committee.
Tyler Mordy, CFA, Director of Research and Co-Chief Investment Officer
Recognized innovator in the design and application of ETF managed portfolios, and widely
interviewed by the financial media for his global strategy views as well as ETF trends. Recently,
IndexUniverse profiled Tyler as one of the “best and brightest” working in the ETF industry.
Formerly with Deutsche Asset Management in London, UK.
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HAHN Global Investment Strategy Committee
Our Investment Philosophy: A Solid Foundation
5 Pillars of Tactical Asset Allocation
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Outline
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Performance
Process
Portfolio Construction
People and Philosophy
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Global Asset Class Universe
ETFs have colonized virtually every asset class across the globe
Cash Fixed Income Equity Opportunity
Short Term T-Bills
Credit
Foreign
Duration
Credit
Sector
Specialty
Sector
Size
Style
Specialty
Commodity
Real Estate
Thematic
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HAHN Global Asset Mix Decisions =
Country Country
www.hahninvest.com
Intelligent Portfolio Construction and Risk Parameters
Globalized, diversified and adaptive*
* The composite benchmark for this portfolio is comprised of the following indices and weights: CAD 90-day Treasury Bill index (5%), MSCI EAFE Index in $Cdn (14%), S&P 500 Index in $CDN (11%), S&P/TSX 60 Index (25%), Citigroup World
BIG Non-USD Bonds in $Cdn (13%), Barclays Capital U.S. Aggregate Bonds in $Cdn (9.5%), DEX Universe Bonds (22.5%).
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Opportunity
Investments
Traditional
Investments
Cash
Equivalents
Total Equity Canadian Equity US Equity International
Equity
Total Bonds Canadian Bonds US Bonds International
Bonds
Strategy Range Benchmark Current Strategy
HAHN ETF Managed Portfolios
Eleven Distinct Mandates with Different Risk Profiles
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HAHN ETF Managed Portfolios
Detailed Investment Guidelines Available
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HAHN ETF Managed Portfolios
9 “Core” Mandates
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HAHN ETF Managed Portfolios
2 “Income Focus” Mandates
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HAHN ETF Managed Portfolios
Quarterly Fact Sheets for Every Mandate
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Outline
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Performance
Process
Portfolio Construction
People and Philosophy
HAHN Investment Architecture
Overview: Secular and Tactical Views
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Long-Term Macro Outlook
(3 – 5 years)
Secular Trends
Macro Scenarios
Core Approaches
Short-Term Strategies
(12 months)
Tactical Strategies
Significant Events
Currencies: The Forgotten Asset Class
Active currency management can diversify portfolio risk factors
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* Chart is illustrative only and does not reflect any current strategy or policy.
HAHN Currency Barometer vs. USD
Cu
rre
nc
y/U
SD
Currency
Overvalued
Currency
Overvalued
Hedging lowers risk only
when over-valuation occurs
Active Hedging Range
Fundamental Value Range
Foreign Currency/$/USD
Monthly
A Repeatable Investment Process
“While the general investment consensus... is
more brazenly complacent and optimistic than
ever, we continue to identify ever-heightening
risks and deteriorating investment conditions.”
Investment Committee Minutes, June 2007
“World now in Stage 1 - Global
Purgatory…Nevertheless, a tradable equity market
rally is expected into Spring 2009…Risk
becoming cheaper … some sectors and asset
classes very inexpensive…We must now be
biased “opportunists” … although careful ones at
that.”
Investment Committee Minutes, Nov. 2008
Our Rigorous Process Identifies Risk and Opportunity
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Global Tactical Asset Allocation Matrix
Real world examples: “Pre-crisis” positioning (December 2007)
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Global Tactical Asset Allocation Matrix
Real world examples: “Post-crisis” positioning (March 2009)
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Tactical Weightings HAHN Global Balanced Benchmark Portfolio
Major Strategy Changes: June 2003 Inception – December 2012
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Why are ETFs Used?
1. Global diversification previously available only to large investors.
2. Access to non-traditional asset classes previously illiquid or difficult to access
3. Facilitation of active strategies such as tactical asset allocation.
“We can today build personalized $100,000 global portfolios that are better quality and less expensive than we could for a large pension fund in the multimillions twenty years ago.”
Wilfred Hahn, Founder and & CIO, HAHN Investment Stewards
ETFs have Revolutionized the Portfolio Management Industry
ETF Selection Criteria
Rigorous and Disciplined
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Filters
Strategy Mapping
Index Construction
Diversification
Low Tracking Error
Liquidity
Expenses
Unique Factors
Outline
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Performance
Process
Portfolio Construction
People and Philosophy
Conservative, “low drawdown” performance style
International Balanced
CITI World BIG
Annual Return: 2.26%
Standard Dev: 9.85%
MSCI Developed World
Annual Return: 3.38%
Std. Dev: 11.58%
HAHN Benchmark*
Annual Return: 4.37%
Std. Dev: 6.01%
HAHN Intl. Bal.**
Annual Return: 7.26%
Std. Dev: 6.69%
*Benchmark performances do not include the impact of any fees. The composite benchmark for this portfolio is comprised of the following indices and weights: CAD 90-day Treasury Bill index (5%), MSCI EAFE Index in $Cdn (5%), S&P 500 Index
in $CDN (7.5%), S&P/TSX 60 Index (12.5%), Citigroup World BIG Non-USD Bonds in $Cdn (19%), Barclays Capital U.S. Aggregate Bonds in $Cdn (16%), DEX Universe Bonds (35%).
**Performance statistics for Managed ETF Portfolios are calculated from documented actual investment strategies as set by HAHN’s Investment Committee and applied to its portfolios mandates, and are intended to provide an approximation of
composite results for client separately-managed accounts. Actual performance of individual separate accounts may vary with average gross “composite” performance statistics presented here due to client-specific portfolio differences with respect
to size, inflow/outflow history and inception dates, as well as intra-day market volatilities versus daily closing prices. Performance figures provided are net of total ETF expense ratios and custody fees, but before transaction costs, witholding taxes,
and other investment management and advisor fees. Past investment results provide no indication of future performance. Future returns are dependent on the general investment environment, the nature of the portfolio mandate and active
investment strategies and risks. Word Equity Index - MSCI Developed World Index TR (CAD). World Bond Index - Citi Group World Bond Index TR (CAD). Volatility measured as standard deviation.
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Conservative, “low drawdown” performance style
International Income Focus
HAHN Int. Inc. Focus.**
Annual Return: 8.69%
Std. Dev: 5.8%
HAHN Benchmark*
Annual Return 2.86%
Std. Dev: 0.15%
MSCI Developed World
Annual Return: 0.64%
Std. Dev: 13.36%
CITI World BIG
Annual Return: 4.51%
Std. Dev: 10.67%
* HAHN Benchmark is defined as 2% in excess of 90-day Canadian T-bill rate. A long-term time horizon of 4 to 5 years is contemplated which is equivalent to a typical business/credit cycle. Please note that due to time lag in the publishing of
monthly CPI statistics, the previous month’s value may be used for current performance reporting.
**Performance statistics for Managed ETF Portfolios are calculated from documented actual investment strategies as set by HAHN’s Investment Committee and applied to its portfolios mandates, and are intended to provide an approximation of
composite results for client separately-managed accounts. Actual performance of individual separate accounts may vary with average gross “composite” performance statistics presented here due to client-specific portfolio differences with respect
to size, inflow/outflow history and inception dates, as well as intra-day market volatilities versus daily closing prices. Performance figures provided are net of total ETF expense ratios and custody fees, but before transaction costs, witholding taxes,
and other investment management and advisor fees. Past investment results provide no indication of future performance. Future returns are dependent on the general investment environment, the nature of the portfolio mandate and active
investment strategies and risks. Word Equity Index - MSCI Developed World Index TR (CAD). World Bond Index - Citi Group World Bond Index TR (CAD). Volatility measured as standard deviation.
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Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12
www.hahninvest.com
Thematic. Opportunistic. Pragmatic.