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Komfie Manalo, Opalesque Asia: Bob Treue's hedge fund, The Barnegat Fund, was off to a good start this year gaining 1.5% in May, bringing year-to-date profits at 12.5%. Treue said that the fund's net, annual compound rate of return since launch in 2001 is 16.5%.
As of May this year, Barnegat's assets under management is placed at $607 million.
"We are off to a good start this year," Treue said in his monthly report. "A portion of our profit has come from carry. What I mean by carry is that if we come back a year from now and all the yields are the same, we would make about 7%. Historically, this carry has ranged from 0-20%. Last year, carry was also about 7%."
He added that in 2016, Barnega's trades moved slightly against the company, but he was able to have a positive return (+3.5%) because the loss from market moves was less than the gain from carry. This year, the market has moved in their direction and the fund gained 12.5%.
"It is nice to have this wind at our back with carry. In today's low interest world, 7% carry helps,: he added.
Fund volatility at new low
Treue said that the annualized volatility of Barnegat's share price reached a new low in May at 2.8%. Annualized volatility for the entire year has also been low at 4.8%. Given this low volatility, Barnegat has not reduced the size of its trades.
"Our share price volatility has dropped because the trades we have on and the m...................... To view our full article Click here
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