# Portfolio fund management



## Ashsaege (16 December 2010)

I will be studying Portfolio Fund Management next year for uni, and I thought I could start a thread that discusses/analyses different types of funds, styles, returns, fees, etc.

I'm assuming that most people who invest in managed funds probably wouldn't bother looking at individuals stocks and hence wouldn't end up on here. But there are many users on here with great knowledge that could contribute.

To start things off I'm currently looking at the Wilson HTM Priority Growth Fund. It returned to October 31, 2010:
 29%p.a. for the period since inception July 4, 2005 versus the benchmark ASX Small Ords Index of 6.3%.
Also has a 5 year return of 21.62%p.a. v. Benchmark 4.91%, and a 3 year return of 7.13% v. Benchmark -10.06%.

These figures are quite impressive, beating the index convincingly. However, looking at the attached graph this fund lost over 50% during the 07/08 GFC - I'm sure most funds and most investors had similar results. I'm really interested to see how funds deal with risk. Most funds would use 'buy and hold' strategies and use diversification as risk management, but is there anything else that they could use? To me diversification doesn't really hold up when the entire market goes to sh%t.
Could you implement technical risk management into a large fund? (Position sizing based on stop loss and overall portfolio value)


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## prawn_86 (16 December 2010)

When i did PFM it was all about EMH and beta, we didnt actually look at and funds etc. It was all theorectical crap


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## Ashsaege (16 December 2010)

prawn_86 said:


> When i did PFM it was all about EMH and beta, we didnt actually look at and funds etc. It was all theorectical crap




Yeh i wasn't expecting the subject to look at particular funds, I just wanted to see some real life application in this discussion.

sorry, what does EMH stand for?


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## prawn_86 (16 December 2010)

Ashsaege said:


> sorry, what does EMH stand for?




Efficient Market Hypothesis


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## pixel (16 December 2010)

Ashsaege said:


> Yeh i wasn't expecting the subject to look at particular funds, I just wanted to see some real life application in this discussion.




I'm not sure whether a large fund with a few $100M or $B in its portfolio could ever implement an effective stop-loss strategy. The opportunity may exist where only a small portion of their holdings is concerned: Say, they're overweight NUF in late 2009 and have to ofload 10M NUF. That might have taken a couple of weeks and send NUF down faster than it actually drifted down (see chart) but it would probably have got them out around $10 after all.




At the beginning of the GFC, however, upi and I could offload a few hundred K or couple of Million withough a problem. But imagine every fundie had tried that across the board: Nobody would have been willing to buy and the market would have completely collapsed, instead of dropping by "only" 56%.




Again, you and I could resume buying in March 2009 with little or no overall loss while our cash was parked in an interest-bearing account that only had to pay CPI or RBA rates. That option wasn't available to the big funds either. Hence my preference for an individually managed SMSF - provided one has the ability and time.

So, how big was Wilson's HTM fund that you mentioned?


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## So_Cynical (16 December 2010)

My main interest is the So_Cynical Fund  coincidently hitting a new all time high and financial mile stone today  while the SCF also got absolutely smashed in the GFC the fund manager wisely threw every last cent into averaging down...this combined with a change of investment strategy at close to the bottom of the GFC, turned the fund around and provided the building blocks for today's impressive result. 

All time 3 and a half year comparison chart below. :venus:
~


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## prawn_86 (16 December 2010)

Well done SC, quite the turnaround


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## eddyeagle (16 December 2010)

So_Cynical said:


> My main interest is the So_Cynical Fund  coincidently hitting a new all time high and financial mile stone today  while the SCF also got absolutely smashed in the GFC the fund manager wisely threw every last cent into averaging down...this combined with a change of investment strategy at close to the bottom of the GFC, turned the fund around and provided the building blocks for today's impressive result.
> 
> 
> ~





Nice work SC! Fortune favours the brave!


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## GumbyLearner (16 December 2010)

Been successfully doing it since 2004.


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## Ashsaege (17 December 2010)

pixel said:


> So, how big was Wilson's HTM fund that you mentioned?




Net assets are $140mil

That's what i was thinking, these massive funds would create too much price movement to implement proper stop loss strategies. Liquidity at that level is too low, and probably is even in American markets.
I just want to know is there anything else besides diversification for risk management?


Good work SC from getting out of the red. Great run from the end of 2008.
The ASX200 has been fairly flat this year, and yet your up 30%. 
What is your strategy? Growth stocks? Value stocks? Or do you trade from a technical point of view?

I'm currently trading breakouts. up 28% since September 2010. Including my current holdings I'm up 41.2%. Win/Loss ratio of 4.96 and win% of 66.7%


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## So_Cynical (17 December 2010)

Ashsaege said:


> I just want to know is there anything else besides diversification for risk management?




PTM - Platinum asset management (one of my portfolio stocks) are very different fund managers and very well worth having a good look at, ive read that Kerr Neilson is Australia's only billionaire fund manager and he's quite open about his/platinum's success as stock pickers.

http://en.wikipedia.org/wiki/Kerr_Neilson

Platinum manage approximately 18.4 billion spread over about 12 funds (1 ASX listed) with all funds investing only in international markets, stock selection is based around a contrarian philosophy and when deemed appropriate the funds can and have had significant short positions.

http://www.platinum.com.au/

------------------------- 


Ashsaege said:


> Good work SC from getting out of the red. Great run from the end of 2008.
> The ASX200 has been fairly flat this year, and yet your up 30%.
> What is your strategy? Growth stocks? Value stocks? Or do you trade from a technical point of view?




Perhaps im out performing the ASX200 because only about a third of my portfolio is in the ASX200 :dunno: i can only say that ive picked some good stocks to be in (so far) and somehow, something in my stock selection process stops me from making to many mistakes....my main 3 winning factors as far as stock picking and management goes are.


My early over exposure to gold via (mostly) TRY average price about $1.70 now $4 
My still open trade in HDF now up over 110%
My 2 trades in ILU back when it was trading at around $3 left me with a significant free carry position that's now up over 180% 



Ashsaege said:


> I'm currently trading breakouts. up 28% since September 2010. Including my current holdings I'm up 41.2%. Win/Loss ratio of 4.96 and win% of 66.7%




Nice stats, and i thought my winners to losers was good!  i'm building a portfolio and a dividend stream by recycling my capital thru my portfolio stocks, buying low and selling higher and leaving the profit in...also occasionally adding new stocks when re-entry's don't make sense.


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## Ashsaege (20 December 2010)

So_Cynical said:


> PTM - Platinum asset management (one of my portfolio stocks) are very different fund managers and very well worth having a good look at, ive read that Kerr Neilson is Australia's only billionaire fund manager and he's quite open about his/platinum's success as stock pickers.
> 
> http://en.wikipedia.org/wiki/Kerr_Neilson
> 
> ...




Thanks mate, that's what i want. Time to do some research on Kerr and Platinum Asset Management..

I've been given some papers on Contrarian investing - written by Lakonishok, Shleifer and Vishny who are from LSV Asset Management. You can find the paper by googling it. Very interesting read on Value investing, and i highly recommend it. I will also get the privilege of meeting these people in the states early next year.


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## AUSG (16 February 2019)

So_Cynical said:


> PTM - Platinum asset management (one of my portfolio stocks) are very different fund managers and very well worth having a good look at, ive read that Kerr Neilson is Australia's only billionaire fund manager and he's quite open about his/platinum's success as stock pickers.
> 
> http://en.wikipedia.org/wiki/Kerr_Neilson
> 
> ...



Hi 
Are you still vested in PTM? What do you make of the underperformance of their main funds vs their benchmarks?


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## So_Cynical (17 February 2019)

AUSG said:


> Hi
> Are you still vested in PTM? What do you make of the underperformance of their main funds vs their benchmarks?




I sold out of PTM a few years ago before the price really fell away and subsequently recovered to then fall again, its hard times for fund managers in general, PTM doing it tough.


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