Latitude Horizon Fund


THE OBJECTIVE OF THE LATITUDE HORIZON FUND IS TO DELIVER CAPITAL APPRECIATION OVER THE LONG TERM BY HOLDING A CONCENTRATED PORTFOLIO OF STOCKS, WHILST LOWERING THE EQUITY RISK THROUGH A SELECTION OF NON-EQUITY INVESTMENTS. 

September 2019 Commentary

As autumn sets in there is a notably cooler breeze whistling through the markets. Current activity gauges which have been flashing amber weather warnings in manufacturing for many months have recently lowered expectations for the larger services sector too. Investors could now be forgiven for expecting a perfect storm, yet markets continue to rally. Is the bearish consensus right, or have they misunderstood something?

Assuming something is wrong because it is misunderstood is a cardinal sin of investing. The rules changed post the financial crisis as markets handed over responsibility for setting the cost of debt to governments. Through their quantitative easing programs central banks now determine the shape and height of the yield curve to a far greater degree than ever before and the implications of this change are yet to be fully understood.

One universally acknowledged truth is that the decade of extraordinary monetary policy has created many a good fortune, particularly recapitalising the banks and supporting global economies. The world is so awash with capital, yet no one wishes to spend, hence the cost of capital being near or below zero. The role of the spender of last resort will yet again fall to governments and fiscal rules will be loosened through the next stage of this cycle. This could be hugely supportive for markets, we are just too early in the cycle to know.

The other effect of excess money has been an increased correlation between various asset classes. This ocean of liquidity often lifts and sinks assets in unison, making it more complicated for multi-asset class investors to effectively diversify portfolios. Many have stretched their mandates to include more complex and risky activities such as options trading, shorting and niche illiquid assets such as catastrophe insurance or private debt. We believe this is a mistake which could cost investors dearly at a point of dislocation.

Our preference remains to invest in more traditional asset classes (currencies, commodities and bonds) although these are also not immune to the correlation issues. It is for this reason that at the beginning of September we exited our gold position, the proceeds of which, for now, are invested in short dated UK T-Bills. There is a meaningful chance that gold is a structural winner from monetary and fiscal expansions, however, there is an equally (or greater) meaningful chance that, as a result, gold no longer offers the risk reduction which it once did. Instead, gold can rally and fall alongside stock markets as it has for much of this year. Given speculative positions in gold are near all time highs, and the investment has served a great purpose in our portfolio through risk reduction and return enhancement, we have chosen to keep our powder dry and wait to see which way the wind blows in the months to come.

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Key info
Key Info
Fund Launch Date1st November 2016
Legal StructureIrish Domiciled UCITS V Fund - ICAV
RegulatorCentral Bank of Ireland
Base CurrencySterling
Regional ExposureGlobal, primarily developed markets
BenchmarkThe fund is not benchmarked
Share Classes£ - A/I IE00BDC7CZ89 / IE00BD37NY30
$ - A/I IE00BD37NZ47 / IE00BDC7JY67
€ - A/I IE00BDC7CX65 / IE00BDC7CW58
Management Fee1% per annum
Performance Fee0%
DealingDaily
AdministratorSEI Investments – Global Fund Services
CustodianSEI Investments Trustee and Custodial Services (Ireland)
Auditors PriceWaterhouseCoopers
Legal CouncilMatheson
Firm ComplianceOptima Partners
Contact DetailsPatrick Valentine
patrick.valentine@latitudeim.com
+44 (0)207 087 9278
Documents
Fund Reports
Liquidity Risk Rising

Liquidity Risk Rising

Latitude 2018 Annual Review

Latitude 2018 Annual Review

Latitude 2017 Annual Review

Latitude 2017 Annual Review

Latitude Philosophy

Latitude Philosophy