Fund Awards 2008
WINNER
Portfolio Adviser fund AwArds 2008 CAtegory winner
SWIP Defensive Gilt Fund
Graham Caughey, manager
of the SWIP Defensive Gilt
Fund, has had to navigate
some particularly choppy
waters in the past few
months as September’s turmoil
led to significant volatility in
gilts and considerable yield
swings.
In fact, the fund’s benchmark
ten-year gilt did well
to end up close to where it
started at the beginning of
the month.
Caughey comments that
he started September with a
small overweight position in
five-year gilts relative to the
benchmark, but moved it back
to neutral during the month,
as well as holding a small
position in corporate bonds.
“The fund underperformed
its benchmark in September,”
he says. “This was the result
swiP defensive gilt fund vs index
%
12
8
4
0
-4
Jul ’05 Jan ’06
Source: Morningstar
fund facts
Government bonds
Jul
Annual discrete performance
%
5
4
3
2
1
0
-1
-2
SWIP Defensive Gilt
Source: Morningstar
of moving from a long duration
position at the start of
SWIP Defensive Gilt
Fund name: SWIP Defensive Gilt Managers: Graeme Caughey, Craig Inches
Launch date: 5 Jul ’04 Fund size: £514.27m Initial charge: 3.75%
Annual charge: 1% Min initial investment: £1,000 M’star rating: HHHHH
Jan ’07
Jul
Year ending Jun ’06
Year ending Jun ’07
Year ending Jun ’08
Quartile performance: 1 Jul ’05 – 1 Jul ’08
1st q’tile
2nd q’tile
3rd q’tile
4th q’tile
Q3
’05
Q4
’05
Source: Morningstar
Q1
’06
M’star UK FI
£ Government
Jan ’08
Q2
’06
Q3
’06
Jul
December 2008 [www.portfolio-adviser.com] Portfolio ADViSer SUPPlemeNt
Q4
’06
M’star UK Fixed Interest £ Govt
Q1
’07
Q2
’07
Q3
’07
the period to a short duration
position at the month end as
yields continued to fall.
“The fund also suffered
from trading during the period
when markets were volatile.”
He runs the half-a-billionpound
fund very much on a
macroeconomic view, holding
between 40 to 60 assets, and
invests with a one-year time
horizon in mind.
Overall, the fund holds
14.5% of bonds with a maturity
of less than one year,
49.5% between one and three
years, and 36% with a maturity
greater than three years.
Caughey maintained a neutral
duration position throughout
October, despite the
high volatility, and underperformed
its benchmark during
the month.
Q4
’07
Q1
’08
Q2
’08
“
Adding value in
the gilt market is
notoriously difficult;
SWIP has managed
it, with considerably
lower volatility than
its competitors, fully
justifying its ‘defensive’
moniker
”
Dan Kemp, PA Fund Awards judge
SWIP’s Tony Maddock
17
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.