Trading Updates 14/08/2019
Trading Update - August
Sold: Highbridge Multi Strategy Fund, HSBC and Schroder Asian Total Return
Sold: Highbridge Multi Strategy Fund
Highbridge Capital Management has decided to focus solely on credit strategies, and is exiting the Multi Strategy Absolute Return space. Having considered Highbridge’s proposals for the future of the investment trust we decided to exit the position.
First half numbers saw HSBC abandoning the return targets for their US based business. The profitability of this business is negatively impacted by falling US interest rates. Their domestic Hong Kong bank ‘s profitability is being pressurised by start up banks which are beginning to chip away at HSBC’s franchise. Furthermore, there have been a number of high profile departures from the business in recent weeks which allied with the prolonged unrest in Hong Kong (and the Chinese authorities’ response to it) undermine confidence in the long term future of Hong Kong as a key financial hub.
Sold: Schroder Asian Total Return
We hold the managers of this investment trust in high regard but have decided to reduce our exposure to the Asia ex Japan equity region. The investment trust currently trades at a modest premium to Net Asset Value, however in any prolonged equity market downturn a sizeable discount could open up, resulting in share price underperformance versus its benchmark.
14 August 2019
Cornelian Investment Team