Accuvest Limited announced that its Global Opportunities Fund has reached its 5 year track record, and has consistently and substantially outperformed the benchmark MSCI All Country World Index, thus demonstrating the promise of an actively managed portfolio of single-country ETFs.
The benefits of investing with single-country ETFs have been known for some time – targeted exposure, diversification, cost, and liquidity to name a few; but because single-country ETFs have only been adopted by investors over the past few years, long-term results of ETF portfolios have not been available.
The move to ETFs by professional investment managers over the past year or two is worth noting. According to Morningstar, international ETFs listed in the U.S. grew from $35 billion in assets 5 years ago, to $245 billion in assets today. The percentage of Non-US ETFs compared to all ETFs almost doubled during that same period. Despite being launched in 1996, single-country ETFs did not gain widespread acceptance by investors and investment professionals until 2004. As a result, finding managers with a 3-year track-record using single-country ETFs is difficult, and finding managers with 5-year numbers is almost impossible.
Investment Managers Brad Jensen and David Garff of Accuvest Global Advisors in Walnut Creek, California (AGA) were early adopters of ETFs, and pioneers in the active management of a portfolio of single-country ETFs. AGA has 5-year results for several of its strategies, and the numbers are impressive. The Accuvest Global Opportunities Fund, an international investment fund managed by AGA, has substantially outperformed the benchmark MSCI World Index with annualized alpha more than 7% over the last 5 years through November 2010.
Brad Jensen said, “I think everyone understands the advantages of investing with ETFs, and I think we’ve shown that long-term results can be one of those benefits”. David Garff added, “It was extremely difficult to do what we’re doing more than 5 years ago, as significant liquidity in most single-country ETFs didn’t exist.”
Mr. Garff went on to say, “We challenged the notion of getting one’s global equity exposure though individual names on foreign exchanges and ADRs”. Mr. Jensen added, “I think investors instinctively understand the difference between Korea and Russia, but may have a more difficult time coming to grips with a steel manufacturer from Korea, or a bank from Russia – thus we choose countries, not individual stocks. We use our in-house proprietary country selection model to rank countries and implement our strategies using single-country ETFs. The strategy has delivered substantial index outperformance to our investors.”
The substantiation of the strategy is in the results. The Accuvest Global Opportunities Fund has outperformed the MSCI All Country World Index in the last 1 month, 3 month, 6 month , 1 year, 2 year, 3 year , 4 year , and 5 year periods. Mr. Garff said, “Normally we’re reluctant to focus on performance, but rather concentrate on our strategies, as we think our top-down approach to global equities using single-county ETFs is unique.” Garff went on to say, “but we do believe that performance is a byproduct of a disciplined, consistent approach.”
The Accuvest Global Opportunities Fund is up 22% in the last 12 months, more than triple the world benchmark for the same period. Morningstar shows the fund as the #1 investment performer for Q3-10, out of 896 funds in the US – World Equity Open End Fund category. The Accuvest Global Opportunities Fund is also in the top 5% of Morningstar’s U.S. listed World Equity Open End Funds (among 580 funds) for 5 year annualized returns.
Other third parties have taken note of AGA’s performance as well. Barron’s just named AGA’s Global Opportunities strategy a Q3 separate account winner; the 8th best performing manager among 4,500 strategies, including all managers and all asset classes. Global Opportunities was also named a PSN Top Gun, ranking #5 amongst all Global Equity Separate Account Managers for Q3-2010.
“Very few managers take a top-down approach to global equities like we do”, Mr. Garff said. “We believe the results show that our country selection model works. Now, more than ever, we believe that an actively managed portfolio of single country ETFs can live up to their promise and give investors solid long-term results.”
Accuvest Limited, based in Nassau, The Bahamas, is the international distributor of the Accuvest Global Opportunities Fund – managed by AGA. AGA was formed in 2005 as a RIA in the state of California. AGA registered with the SEC in 2008. Since its formation, AGA has grown to be one of the premier investment managers for their work in global equity portfolios and endowment style portfolios. All of AGA’s portfolios are GIPS audited.
Past performance is no guarantee of future results. International investing is subject to risks including: currency, economic, political and market fluctuation. Investors should carefully consider Accuvest disclosure documents and evaluate risks, expenses and their investment objectives before investing. The Accuvest Global Opportunities Fund, mentioned in this article, is only available to non-US investors. AGA’s separate account strategies are available on a direct basis.