Stratton Street backs rich nations as it tackles the West’s debt equation
Fri Oct 21, 2011
Well ahead of the global sovereign debt crisis, Stratton Street dared to be a contrarian and invest in countries that were creditors, not debtors. In an interview with AsiaHedge editor Aradhna Dayal, London-based portfolio manager Andy Seaman gives his thoughts on the possible outcomes of the Eurozone debt crisis and his Renminbi Bond fund – the longest running strategy of its type in the Asian hedge fund space
Could you give us a brief synopsis of the funds you run? At
Stratton Street we manage funds of just under $1 billion, the
largest of which is EFGs New Capital Wealthy Nations Bond
Fund where we act as sub advisor. That fund invests in the
wealthiest countries in the world and so, by definition, does
not index. Index investing for bond fund managers
is a nonsense in our view, as the biggest weights are given to
the most heavily indebted countries and corporates. Instead, we
invest in countries, and the corporates of those countries, who
can most afford to repay their debts. Our Renminbi Bond Fund
invests along similar lines, but is restricted to Asian fixed
income investments. The fund was launched in November 2007. At
the time the fixed income team believed the currency was
undervalued (at the time of launch the CNY/USD exchange rate
was 7.3875). We...
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