That’s the price action in Man Group on Wednesday and over the past year.
At the time of writing, Man was the biggest faller in the FTSE 100 following another weak reading from is flagship managed futures fund.
The following was issued by Man after the market closed on Tuesday night.
Man AHL Diversified Futures Ltd Weekly Net Asset Value
As at the close of business on 25 January 2010, the Net Asset Value of Man AHL Diversified Futures Ltd was US$34.87.
Track Record: From inception on 19 May 1998
Key Statistics Last week – 3.57%
Last 12 months (as at 25 January 2010) -16.6% Annualised return since inception (as at 25 January 2010) +11.2%
Keith Baird of Oriel Securities reckons the recent poor run of the fund is down to QE.
The company have indicated that the problems of AHL in exploiting trends are most likely connected with quantitative easing which has been running over the last year during which AHL is down by 16%.
Their expectation for the future in part depends on whether the stimulus withdrawal essentially by the Federal Reserve and Bank of England is synchronised or not. It would be worse if it were synchronised – which looks quite possible. This is what happened in Q1 2009 and AHL has been suffering.
If true this implies a further period of inadequate returns until QE is withdrawn.
That may well mean further downside in the shares though we continue to expect them to recover eventually. Current PT 300p.
Indeed, a glance at the track record of the AHL fund since inception also shows that it has struggled in the aftermath of the last leverage driven recovery (which started in March 2003) – for a couple of years.
(H/T Taxloss)
History, of course, does not always repeat itself but it looks in this case as if it might rhyme.
Related link:
Futures Funds Fall Most Since 1987 as AHL, Henry Miss Shifts – Long Room