GAA 'Q' Fund

Introduction

The first three years of the 21st century heralded sustained stock market declines which caught many global investors off guard. In general, traditional ‘long only’ fund management techniques suffer during periods of prolonged contraction.

Although many global markets fell between the end of 1999 and mid 2003, it is interesting to note a number of markets / asset classes made money over the same period, including the US Mid Cap Index and Gold.

The danger, of course, of limiting investment to niche sectors or specific asset classes is that this may not prove to be an attractive LONG TERM strategy. Gold, for example, is still well off its highs of the late 1970’s.

The truth is that SOME stocks ALWAYS perform each month, even in falling markets, but not necessarily the SAME stocks month in month out. A hypothetical monthly re-weighted portfolio of the top performing mid to large cap stocks would have consistently achieved average returns of more than 3-4% per month, had you been able to choose the stocks with the benefit of hindsight. The real question, therefore, is whether or not such stocks can be identified monthly in advance…

Introducing the GAA ‘Q’ Fund, a Fund which ties mathematical ‘Quant’ theory to a rigorously tested systematic stock selection and hedging process.

Fund Overview

The Fund seeks consistent absolute returns primarily by investing and trading in equities and equity related products of companies incorporated globally, while at the same time reducing exposure to downward movements in the market by actively managing risk. It aims to secure consistent and above average returns from a dynamic, forward looking mathematical ‘Quant’ model which relies on the structured processing and interpretation of universal stock data and forecasting.

Key Benefits

• Ability to analyze all data available from the entire universe of more than 38,000 stocks across 52 global stock markets.

• Only mid to large cap stocks are considered, typically capitalized at more than US$100 million, and often at more than US$ 1 billion

• Dynamic stock selection process based on an extensively researched and developed “Quant Model”.

• Monthly re-weighting; stock selection is evaluated and reallocated every month.

• Maximum weighting; no single stock will constitute more than 5% of the portfolio.

• Diversification; typically, 90 - 120 stocks are purchased every month.

• Dynamic hedging facility; a unique hedging facility is used to protect the portfolio from sudden downturns in the market as and when appropriate.

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