Managed Funds HFA Alternative Yield Fund - Freeman Fox

Hi All

Are there any Freeman Fox clients here who have received recommendations to invest in the HFA Alternative Yield Fund? FF say that the poor past performance of basically every HFA fund ever to exist shouldn't bear on this fund. I agree with the 'past performance' adage regarding markets, but not so much in terms of fund manager performance. Does anyone have an opinion on what's happening here? FF also has a buy recommendation on HFA stock.

To me this is more than just about investing in the fund or not, I think it raises other more important questions. I'm interested in hearing what other people think, especially FF clients.

Also, AIA is hosting a teleconference on Asian markets tomorrow and HFA's Jonathan Pain will be presenting, so maybe he'll shed some light on how they'll make 'this time different'.

-T-

 

Hedge Funds Australia (HFA); the managers for Octane Asia and a number of other funds peddled by FF.

 

I'm sure the recommendations have absolutely nothing to do with trailing commissions..

 

Trailing commissions are ok if they are reasonable and I suspect they can get trailing commissions on any fund they recommend. My concern is whether the fund managers are competent and whether FF is recommending this fund purely because of a deal with HFA.

Of course they could wholeheartedly believe in HFA and their strategies, but I’m yet to see reasonable evidence of this. In poor conditions, it seems HFA’s absolute return funds still don’t do very well. Sure they may outperform the index in a bear market, but returning -1% instead of -5% still sux.

P Spann has lamented about Asian economies (particularly China) and his reasons for suggesting this fund seem to be a) it is based in China, and b) absolute return funds should do better in bear markets. If that’s the extent of the fundamental value of these funds (that is, little to consider the performance of the fund manager), then others should know. Lastly, I don’t quite get the idea of funds investing in other funds, which in turn invest in other funds. I’m not talking about wraps or master trusts, so I don’t think diversification is the intent.

Prima facie it seems it’s just about marketing and the layer upon layer of fees is an accepted by-product. I’m happy to be told otherwise, but this is my perception.

 

It looks like the HFA Asia Octane is off the Freeman Fox list, does anyone know why?

 

Hi -T-,

IMHO I wasn't overly impressed with HFA.

More specifically the Diversified fund, they flog it as an income/defensive style fund.

I thought the MER was a little expensive IMHO for an income/defensive fund.

Now I know that "hedge" funds (such a generic term which is thrown around too many times) are expensive due to trading but for an income/defensive fund my clients IMHO are better off in cash.

Personally we use a platform so the adviser fee is the same whether you are in fixed interest/global shares/aussie shares/property managed funds (and "hedge" funds). Not sure what FF set up is there.

I don't know anything about the Asia fund, like I said I was turned off at the diversified fund.

My 2c...

Cheers,

Dan

The above is general information, speak to your FPA registered financial planner, accountant or tax adviser before making an investment decision.

 

Unfortunatly FF said the same thing about Macquarie Equinox funds when they recommended number 6... 6 failed just like the previous 5 did, along with Asia and Asia 2 and Multi stratergie.. I recommend staying away from these funds with poor past performance... let them prove themselves before you invest.. there are many funds going gang busters atm to invest in with good track records.