After
working for many years as an analyst and fundmanger in Germany I am now offering
my know-how and knowledge also to private clients.
My
experiences from covering the US-market as an analyst and managing domestic and
international invested funds were quite helpful when I started following
closed-end funds and the british Investment Trusts. Academic studies showing
that the universe of CEFs is less efficent priced than other parts of the equity
market brought me to the conclusion that the relation between risk and reward is
favourable.
Closed-end
funds listed in New York and London offer a convenient possibility to acquire
undervalued assets with discounts of often 20 % and more to the liquidation
value of the portfolio. Worldwide are more than 1200 funds available with a
market value of around US$ 400 billion. To trade these funds I prefer Internet
Discount-Brokers like Ameritrade and E*Trade in America and Interactive Brokers
for the UK and hedging strategies. Also brokers and banks in Luxembourg and
Austria may be helpful
With my investment policy it is possible to take into account the individual risk preferences. I follow sure bets where capital conservation comes first but also develop many more risky investment ideas involving emerging markets closed-end funds. On investors demand both concepts may be mixed.
In
the process of selecting the most interesting markets I make use of technical,
fundamental and quantitative analytical methods. Depending on the money
available the portefeuille may consist of five or ten CEFs from different
countrys, regions or branches.
As
told by the efficent market theory such a diversified portfolio offers the
maximum return for a given risk. The risk is lower than in a portfolio
consisting of only US-stocks or another single country or region. Despite
globalisation and stronger correlations between the markets one can witness that
the markets in the industrialized world and the emerging markets often move in
opposite directions. These contrary movements stabilize the returns of an
international diversified portfolio.
By
using instruments like options and futures the portfolio risk may be reduced
even further. Certain trading strategies allow me to profit from oscillating
discounts. The results of a study titled “Does a mean reversion strategy
really work” by the brokerage house Flemings may be downloaded (PDF-Format –
679 Kb) here. The complete study (91 pages) is
available on demand.
My
approach investing in CEFs is going even further. With my contacts to big
players in the CEF-world I try to change the influences that are responsible for
the historically high consistent high discounts of the funds I am interested in.
We try for instance to restructure or unitize a fund trading with a discount of
25% and sell it with a profit of 33% (plus or minus market-performance) back to
the company. You see the chances of my concept with moderate risk are enormous.
Do not hesitate to contact me soon.
Back to the Homepage