Interest rate trading drives returns for BH Global in 2018 – BH Global, the fund of hedge funds, has announced that the NAV of its USD share class (BHGU) appreciated by 6.55% in the year to December 31, 2018. USD is the company’s financial currency but it has a larger class of sterling shares (BHGG), which appreciated by 5.53% in NAV terms in 2018.
BH Global invests all of its deployable assets in the ordinary shares of Brevan Howard Global Opportunities Master Fund Limited, which in turn invests in a variety of other investment funds. These are managed by one or more entities within the Brevan Howard Group, which mainly invest in the macro space.
Rates drive returns
Other highlights from the year include:
- Share price appreciation of 11.24% for BHGU and 8.69% for BHGG during a tougher year for global equities. BH Global noted in their annual report that the MSCI all-country world index was down 8.93% in 2018
- In terms of specific fund allocations, the Brevan Howard master fund was the main positive contributor to NAV, mainly by taking advantage of opportunities in the interest rate markets. Underperformance came from the allocation to the Brevan Howard systematic trading master fund, though they were only flat. BH Capital continued to show relatively little correlation to global equity markets, so was largely unaffected by the Q418 sell-off
- With respect to asset class performance attribution across the fund, we note that interest rate trading was responsible for 5.75% of the 6.55% increase in BHGU NAV. Almost all of the rate-related gains took place in Q218. Equities contributed 0.60% overall and performed best in the volatile sell-off fourth quarter
BHGG/BHGU: Interest rate trading drives returns for BH Global in 2018