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SCMP Reporter

GLOBAL Asset Management (GAM) lifted five awards, including the two most prestigious for Best Large Group over one and three years.

  The company, established in 1983 by Gilbert de Botton, also won prizes for best performance in Australian equity funds for one year.

  Statistical analysis group Micropal also confirmed GAM outperformed all authorised Securities and Futures Commission (SFC) funds in Singaporean and Malaysian equities for one and three years.

  GAM, which managed $1 billion for institutions and $6.5 billion in private funds, employs more than 450 [** should be 400 **] people in Zurich, London, [** should add New York, Bermuda **] Edinburgh, Hong Kong, Singapore, the Isle of Man and Dublin.

  Rather than hunting for shares with expected good three-month performance, GAM fund managers looked at investing long term, said portfolio manager James Cundall, director of GAM Hong Kong.

  While many other unit trust managers in the territory bought and sold in three-month time frames, GAM portfolios had 'relatively low' turnovers, he said.

  'In the unit trust business, it is generally accepted that time horizons are much shorter than other investments, such as pension funds.

  'But, because of the nature of our client base, we are able to run unit trusts that are at the longer-term end of the spectrum.'   GAM had 11 funds which qualified for Micropal's large group awards and seven were held in the Far East.

  Micropal selected winners on performance over a calendar year and then adjusted results in accordance to risk management.

  While many unit trust groups had to worry about short-term performance to keep clients happy and secure money from being redeemed, GAM clients wanted long-term compound returns, Mr Cundall said.

  GAM used its unit trust funds as building blocks for private-client portfolios and placed great importance on absolute returns rather than relative gains.

  'We try to give returns 50 to 100 per cent greater than what they would receive in a bank and beat the relevant index over a market cycle,' Mr Cundall said.

  The company had set up 100 unit trust funds worldwide but only 11 were authorised in Hong Kong, he said.

  For discretionary clients, GAM currently held 50 per cent cash and straight bonds, 25 per cent currency [** should read 'with currency/commodity managers **] and 25 per cent equities, of which 15 per cent were in the Far East.   Five per cent of the equity portfolio was held in America and the rest in Europe.

  Another reason for the company's success was its conservative approach to investing compared to other unit trust managers, Mr Cundall said.

  As team members took a personal responsibility for clients' money, every investment was weighed up in terms of profits for the client.

  Although some GAM funds had under-performed in strongly rising markets because of the conservative company approach, many investments paid off last year when market prices dropped, he said.

  'Last year, we held a lot of cash in Japan and some large blue-chip companies in Pacific funds, which may not be the best stocks in a rising market.

  'But, when times get tough, these stocks are expected to be resilient and, when facing selling pressure, they are liquid.'   Although absolute performance was a benchmark for the company, GAM ended the year recording some negative results.

  Despite GAM Singapore Malaysia winning the prize for best performer in Singapore and Malaysian equity funds for one and three years, the company fund managers were 'not proud' of the overall year's results, Mr Cundall said.

  However, a true assessment of GAM's strengths could not be made without analysing returns over a full market cycle, he said.



GAM's long-term approach pays off