TIDMBHMG
RNS Number : 0411N
BH Macro Limited
22 July 2014
BH macro limited
MONTHLY SHAREHOLDER REPORT:
JUNE 2014
YOUR ATTENTION IS DRAWN TO THE DISCLAIMER AT THE END OF THIS DOCUMENT
BH Macro Limited Overview
Manager: BH Macro Limited ("BHM") is a closed-ended investment company, registered and incorporated
Brevan Howard in Guernsey on 17 January 2007 (Registration Number: 46235).
Capital Management BHM invests all of its assets (net of short-term working capital) in the ordinary shares of
LP ("BHCM") Brevan Howard Master Fund Limited (the "Fund").
Administrator: BHM was admitted to the Official List of the UK Listing Authority and to trading on the Main
Northern Trust Market of the London Stock Exchange on 14 March 2007.
International Fund Total Assets: $2,024 mm(1)
Administration 1. Estimated as at 30 June 2014 by BHM's administrator, Northern Trust.
Services (Guernsey)
Limited ("Northern
Trust")
Corporate Broker:
J.P. Morgan
Securities Ltd.
Listings:
London Stock
Exchange (Premium
Listing)
NASDAQ Dubai - USD
Class (Secondary
listing)
Bermuda Stock
Exchange (Secondary
listing)
Summary Information BH Macro Limited NAV per Share (estimated as at 30 June 2014) Share NAV (USD NAV per
Class mm) Share
------------ --------- ---------
USD Shares 417.9 $19.82
------------ --------- ---------
EUR Shares 157.4 EUR19.94
------------ --------- ---------
GBP Shares 1,449.0 GBP20.50
------------ --------- ---------
BH Macro Limited NAV per Share % Monthly
Change USD Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2007 0.10 0.90 0.15 2.29 2.56 3.11 5.92 0.03 2.96 0.75 20.27
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2008 9.89 6.70 -2.79 -2.48 0.77 2.75 1.13 0.75 -3.13 2.76 3.75 -0.68 20.32
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2009 5.06 2.78 1.17 0.13 3.14 -0.86 1.36 0.71 1.55 1.07 0.37 0.37 18.04
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2010 -0.27 -1.50 0.04 1.45 0.32 1.38 -2.01 1.21 1.50 -0.33 -0.33 -0.49 0.91
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2011 0.65 0.53 0.75 0.49 0.55 -0.58 2.19 6.18 0.40 -0.76 1.68 -0.47 12.04
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2012 0.90 0.25 -0.40 -0.43 -1.77 -2.23 2.36 1.02 1.99 -0.36 0.92 1.66 3.86
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2013 1.01 2.32 0.34 3.45 -0.10 -3.05 -0.83 -1.55 0.03 -0.55 1.35 0.40 2.70
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2014 -1.36 -1.10 -0.40 -0.81 -0.08 -0.10* -3.80*
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
EUR Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2007 0.05 0.70 0.02 2.26 2.43 3.07 5.65 -0.08 2.85 0.69 18.95
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2008 9.92 6.68 -2.62 -2.34 0.86 2.84 1.28 0.98 -3.30 2.79 3.91 -0.45 21.65
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2009 5.38 2.67 1.32 0.14 3.12 -0.82 1.33 0.71 1.48 1.05 0.35 0.40 18.36
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2010 -0.30 -1.52 0.03 1.48 0.37 1.39 -1.93 1.25 1.38 -0.35 -0.34 -0.46 0.93
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2011 0.71 0.57 0.78 0.52 0.65 -0.49 2.31 6.29 0.42 -0.69 1.80 -0.54 12.84
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2012 0.91 0.25 -0.39 -0.46 -1.89 -2.20 2.40 0.97 1.94 -0.38 0.90 1.63 3.63
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2013 0.97 2.38 0.31 3.34 -0.10 -2.98 -0.82 -1.55 0.01 -0.53 1.34 0.37 2.62
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2014 -1.40 -1.06 -0.44 -0.75 -0.16 -0.13* -3.87*
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
GBP Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2007 0.11 0.83 0.17 2.28 2.55 3.26 5.92 0.04 3.08 0.89 20.67
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2008 10.18 6.86 -2.61 -2.33 0.95 2.91 1.33 1.21 -2.99 2.84 4.23 -0.67 23.25
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2009 5.19 2.86 1.18 0.05 3.03 -0.90 1.36 0.66 1.55 1.02 0.40 0.40 18.00
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2010 -0.23 -1.54 0.06 1.45 0.36 1.39 -1.96 1.23 1.42 -0.35 -0.30 -0.45 1.03
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2011 0.66 0.52 0.78 0.51 0.59 -0.56 2.22 6.24 0.39 -0.73 1.71 -0.46 12.34
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2012 0.90 0.27 -0.37 -0.41 -1.80 -2.19 2.38 1.01 1.95 -0.35 0.94 1.66 3.94
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2013 1.03 2.43 0.40 3.42 -0.08 -2.95 -0.80 -1.51 0.06 -0.55 1.36 0.41 3.09
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
2014 -1.35 -1.10 -0.34 -0.91 -0.18 -0.13* -3.96*
------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ -------
Source: Fund NAV data is provided by the administrator of the Fund, International Fund Services
(Ireland) Limited. BHM NAV and NAV per Share data is provided by BHM's administrator, Northern
Trust. BHM NAV per Share % Monthly Change is calculated by BHCM. BHM NAV data is unaudited
and net of all investment management fees (2% annual management fee and 20% performance fee)
and all other fees and expenses payable by BHM. In addition, the Fund is subject to an operational
services fee of 50bps per annum.
NAV performance is provided for information purposes only. Shares in BHM do not necessarily
trade at a price equal to the prevailing NAV per Share.
*Estimated as at 30 June 2014
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS
ASC 820 Asset Brevan Howard Master Fund Limited
Valuation Unaudited Estimates as at 30 June 2014 % of Gross
Categorisation* Market Value*
------- ---------------
Level
1 71.2
------- ---------------
Level
2 28.5
------- ---------------
Level
3 0.3
------- ---------------
Source: BHCM
* These estimates are unaudited and have been calculated by BHCM using the same methodology
as that used in the most recent audited financial statements of the Fund. These estimates
are subject to change.
Level 1: This represents the level of assets in the portfolio which are priced using unadjusted
quoted prices in active markets that are accessible at the measurement date for identical,
unrestricted assets or liabilities.
Level 2: This represents the level of assets in the portfolio which are priced using either
(i) quoted prices that are identical or similar in markets that are not active or (ii) model-derived
valuations for which all significant inputs are observable, either directly or indirectly
in active markets.
Level 3: This represents the level of assets in the portfolio which are priced or valued using
inputs that are both significant to the fair value measurement and are not observable directly
or indirectly in an active market.
Performance Review The information in this section has been provided to BHM by BHCM.
for the Fund During the month, the Fund suffered some losses mainly in FX trading and to lesser extent
in USD interest rate trading. These losses were partially offset by gains in EUR interest
rate trading.
Monthly, quarterly and annual contribution (%) to the performance of BHM USD Shares (net of
fees and expenses) by strategy group Macro Rates FX EMG Equity Commodity Credit Systematic Discount Total
Management
------ ------ ------ ------ ------ ------- ---------- ------- ----------- ---------- ------
June
2014 -0.38 0.18 -0.06 -0.04 0.00 0.00 -0.04 -0.00 0.23 -0.10
------ ------ ------ ------ ------ ------- ---------- ------- ----------- ---------- ------
Q1
2014 -3.23 -0.08 -0.03 -0.01 -0.06 0.02 0.55 -0.05 0.07 -2.83
------ ------ ------ ------ ------ ------- ---------- ------- ----------- ---------- ------
Q2
2014 -1.83 0.13 -0.04 0.02 -0.09 0.02 0.15 -0.00 0.65 -1.00
------ ------ ------ ------ ------ ------- ---------- ------- ----------- ---------- ------
YTD
2014 -5.01 0.05 -0.07 0.01 -0.15 0.04 0.71 -0.05 0.72 -3.80
------ ------ ------ ------ ------ ------- ---------- ------- ----------- ---------- ------
Monthly, quarter-to-date and year-to-date figures are estimated by BHCM as at 30 June 2014,
based on total performance data for each period provided by the Fund's administrator, International
Fund Services (Ireland) Limited.
Methodology and Definition of Monthly Contribution to Performance:
Attribution is approximate and has been derived by allocating each trader book in the Fund
to a single category. In cases where a trader book has activity in more than one category,
the most relevant category has been selected.
The above strategies are categorised as follows:
"Macro": multi-asset global markets, mainly directional (for the Fund, the majority of risk
in this category is in rates)
"Rates": developed interest rates markets
"FX": global FX forwards and options
"EMG": global emerging markets
"Equity": global equity markets including indices and other derivatives
"Commodity": liquid commodity futures and options
"Credit": corporate and asset-backed indices, bonds and CDS
"Systematic": rules-based futures trading
Manager's Market The information in this section has been provided to BHM by BHCM.
Review and Outlook Market Commentary
US
The juxtaposition of weak GDP growth and strong job gains was the highlight of the data in
June. First-quarter GDP was revised down to show a contraction of 2.9% (annualised rate).
Incoming indicators for the second quarter - in particular a surprisingly soft path of consumer
spending despite another solid increase in purchases of motor vehicles - led to downward revisions
in the tracking estimate of second-quarter GDP growth. Looking at the data, growth in the
first-half of the year was about flat, a significant disappointment compared with expectations
at the start of the year for 3% growth in 2014. Temporary factors such as the weather and
rebalancing inventories with final sales as well as technical factors such as measuring health
care expenditures account for most of the softness. However, we will be paying close attention
to whether growth in the third-quarter looks firm.
Meanwhile, payroll employment posted another strong increase. Employment has risen by approximately
1.4 million jobs in the first half of the year. That is the best six-month increase in the
history of the expansion since 2009 and nearly matches the peak gains seen in the prior business
cycle. At the same time, the unemployment rate declined to 6.1%. The unemployment rate is
expected to drop below the important 6% threshold in the third quarter. Broader measures of
slack also improved.
Mechanically, weak GDP growth and strong employment growth means that productivity posted
a large decline in the first half of the year. This is a puzzling and troubling development.
The tension is expected to be resolved going forward by consistent 3% GDP growth. But if that
doesn't happen, then a number of macroeconomic assumptions would be called into question,
including the potential growth rate of the economy, the appropriate stance of monetary policy,
and stock market valuations.
Wage and price inflation are beginning to take centre stage in the macroeconomic debate. With
the labour market firing on all cylinders and the assumption that GDP growth will return to
a consistent above-trend pace, wage and price inflation will dictate the timing of monetary
policy normalisation. Core PCE inflation has picked up to 1.5% year-over-year and looks to
be trending up gently. However, wage inflation is hovering around 2%, a modest pace at best.
With wages not showing any signs of labour market tightening, the Federal Reserve are likely
to be comfortable keeping rates low so long as price inflation does not threaten to rise quickly
above its 2% target.
EMU
The unfolding of 'hard' data suggests that the eurozone business cycle is softening, at odds
with the more bullish indications provided by 'soft' data, like business and consumer surveys.
In particular, in May both retail sales and, especially, industrial production were soft,
with the latter contracting sharply although due somewhat to calendar effects. These dynamics
point at a likely soft outcome of EMU GDP growth in the second-quarter, which would likely
disappoint the more upbeat expectations formulated by both private sector analysts and the
ECB. In June, business surveys softened too, although from still elevated levels: the EMU
Composite PMI fell to 52.8 from 53.5 in May. The drop of the EMU Composite PMI was led by
the core countries, France and Germany. The euro area HICP inflation is moving sideways at
very low levels: 0.5% y/y in June, in line with consensus expectations, but still far away
from levels consistent with the ECB definition of price stability. The annual growth rate
of broad money supply M3 rebounded to 1.0% y/y in May from 0.7% y/y in April. On the banks'
asset side, net lending to non-financial corporations (adjusted for sales and securitisation)
declined by EUR4bn, following a contraction of EUR3bn in April, showing little change from
previous months. The annual growth rate of net lending to households moved only slightly up.
At its July meeting, the ECB kept policy rates unchanged, but announced that, as of 2015,
it will hold monetary policy meetings every six weeks instead of every month. This will allow
the Council more time between the meetings to publish 'accounts' of the discussions. ECB President
Mario Draghi stressed that interest rates would stay low for a prolonged period of time, and
that, if inflation remains low the ECB would undertake further action, including asset purchases.
In addition, the ECB published the details of the upcoming T-LTROs. Draghi added that the
maximum amount banks could borrow from the new T-LTROs could be as large as EUR1 trillion
- EUR400bn in this year's operations and EUR600bn in the following two years through the additional
six operations from March 2015 to June 2016. Conditions for borrowing in the T-LTROs are generally
easy to meet.
After many weeks of heated debate among EU leaders and politicians, the former prime minister
of Luxembourg Jean-Claude Juncker was nominated as the next president of the European Commission
despite the campaign led by the UK against his appointment. The decision must still be ratified
by the European parliament. In the concluding document of the European Union Summit, the economic
section referred to making use of margins for flexibility in the EU budget rule along with
structural reforms to lift growth, following requests by France and Italy. Italian Prime Minister
Matteo Renzi had been leading calls in early July for more flexibility in applying the EU's
rules on limiting debt and deficits, arguing that Europe must switch its focus away from strict
budget austerity towards encouraging job creation and economic growth.
UK
The ongoing theme in the UK data is strong growth with benign inflation. Monthly business
indicators over the past months have stabilised at high levels or eased back slightly, but
have generally remained resilient, pointing to GDP growth above 3%. Consumer confidence has
risen above pre-crisis levels, as have car registrations. Unemployment claims data point to
ongoing rapid improvement in the labour market, consistent with growth well above trend. It
is expected that the UK is probably only 1-2 years away from full employment. The composition
of growth is also becoming better balanced, which reduces the risk that it will fall back
sharply. The initial growth pick-up relied heavily on housing and savings-financed consumption.
But more recent data show better balanced growth in two respects. First, business investment
is making an increasing contribution to growth. Second, rising real household income growth
is putting consumption growth on a more sustainable footing. External rebalancing remains
a painfully slow process, as this relies on eurozone demand improving by more than currently
seems likely. The Bank of England ("BoE") have also resigned themselves to this.
Inflation remains benign, in a 1 1/2 to 1 3/4 % range and likely to remain there for some
time. Official data on wage inflation remains very weak, around 1%. But survey evidence on
wage inflation shows some sign of a pick-up from low levels. The BoE switched from quantitative
to qualitative guidance in February, specifying that rate hikes will be gradual, limited and
still some time away. Over the past year, the Monetary Policy Committee ("MPC") has systematically
underestimated the speed at which slack is being reduced, so the date of rate lift-off is
approaching more rapidly than they initially anticipated. This trend was confirmed in June
when Governor Carney specifically mentioned that rates might have to go up sooner than markets
anticipated, and in the June MPC Minutes which opined that the market was underpricing the
risk of a rate hike this year. Moreover, an increasing number of MPC members are realising
that, in order to preserve the 'gradual' nature of rate hikes that they are aiming for, it
is important not to delay the start of the normalisation process for too long. In parallel
to the MPC, the Financial Policy Committee ("FPC") has debated the extent to which the housing
market is posing a financial stability problem. A first FPC step was to introduce the Mortgage
Market Review earlier this year, which formalises the procedure for checking and documenting
affordability. This has led to a fall in mortgage and housing activity in the past few months
as banks struggled to cope with the longer approvals procedure. It is expected that this fall
is temporary, but there is clearly a risk that the FPC has had a bigger impact than it intended.
In June, the FPC introduced two further housing measures to reduce future financial stability
risk: it capped the share of high loan to income mortgages in total mortgage lending, and
introduced a specific interest rate buffer that banks should take into account when assessing
affordability. Both of these limits were set at levels that do not bind today, but that might
bind in a few years if the housing recovery continues apace.
Japan
Economic activity appears to be bouncing back from the swings induced by the April consumption
tax hike, but levels in May were still generally below those seen around the turn of the year.
There have been partial improvements in monthly measures such as industrial production ("IP")
and retail sales, as well as qualitative surveys of current conditions, such as consumer confidence
and business measures (Shoko-Chukin survey of small and medium-sized enterprises and the Economy
Watchers survey). The latest Tankan survey showed a further improvement in current conditions
in the second-quarter among large enterprises but a dip among small and medium-sized firms.
Expectations for future activity remain generally healthy.
Media coverage of Governor Kuroda's speech in late June generally focussed on his comments
on the Government's third-arrow plans, but it was his discussion of the outlook for inflation
that was important. Kuroda carved out more room for the Bank of Japan ("BoJ") to remain on
hold when he said that the BoJ expects inflation to slip a little in the near term before
turning back up. Later in the year, the BoJ expects inflation to pick-up to reach the 2% target
in 2015. It follows from his analysis that the BoJ thinks that output moving above the potential
growth rate drives some of the acceleration in prices, but the relevant Phillips Curve that
Kuroda presents is too flat to account for the entire projected increase. It is apparent that
Kuroda is also banking on a further increase in inflation expectations to push inflation to
the 2% goal; in his framework such an increase represents an upward shift in the Phillips
Curve. However, understanding how inflation expectations are formed and adjusted is difficult.
Japan's own history since 1999 suggests that expectations can shift so that inflation (or
in Japan's case deflation) finds a new equilibrium. The Volcker-Greenspan era suggests that
policy can help change expectations. Disinflation in the United States over that period was
faster than economists thought possible with their models that did not include a role for
expectations but at the same time was slow enough to indicate that inflation expectations
do not suddenly shift because the head of a central bank speaks. In that regard, the recent
slippage in inflation expectations as measured in the consumer survey is somewhat worrisome.
Actual inflation prints, however, have been better of late. The national core measure for
May should not be taken at face value as some energy price increases included the introduction
of the consumption tax that was delayed given billing practices. On the other hand, western
core prices, which exclude all food and energy costs, rose in line to slightly above expectations
in April and increased a further 0.1% in May on a seasonally adjusted basis. Tokyo western
core prices in June also rose 0.1%.
Prime Minister Abe formally announced his new package of third-arrow reforms, including much-needed
corporate governance changes, a proposed corporate-tax cut and measures to boost the roles
of women and foreign workers in the labour market. Some analysts described the announcement
as disappointing as it lacked details. However, the announcement at the start of summer commits
the cabinet to the programme, and it becomes the job of the bureaucracy to develop specific
legislation to implement it thereafter. To be sure, the details matter, but the lack of details
at this time is not a reason by itself to change views.
China
The Chinese Government's selective easing has continued. In particular, the Chinese Banking
Regulatory Commission ("CBRC") has announced the details of the adjustment of the loan-to-deposit
ratio to support targeted credit to priority sectors. However, bank credit is also constrained
by the People's Bank of China ("PBoC") window guidance of credit quota issued directly to
banks, and thus it is not clear how many extra loans could be released. That said, it is encouraging
to see that both the PBoC and the CBRC are now on the same page to support growth. In addition,
fiscal spending in May accelerated after Premier Li told the local governments that "when
we say we should not chase GDP as a primary goal, it does not mean that GDP is not important"
and urged the local governments to spend budgeted expenses in a timely manner. However, despite
the acceleration of fiscal spending in May, the fiscal stance year-to-date is approximately
neutral. A further acceleration in fiscal spending is likely in the coming months to support
growth, which would imply a tighter fiscal position around year-end. Another signal of easing
can be seen in the total social financing ("TSF") dynamics. Although May TSF was in line with
market expectations, it was the first month since January that it outpaced its 2013 corresponding
level, in a sign that credit policy may have become more supportive of growth too. In particular,
the pick-up in new RMB loans in May was quite encouraging as it carries a higher policy signal
than other components in the TSF. On the other hand, net trust product issuance has shrunk
to nearly zero. Another method of easing would be a further cut of the reserve required ratio
("RRR"), in either a selective or broad way. Despite an impressive trade surplus of $36bn
and stable FDI inflows in May, the PBoC's net FX purchase recorded only $6.2bn versus $18.8bn
in April. This implies net capital flows that are not explained by either the trade balance
or FDI (a proxy for hot money flows) of about $38bn in May. If such trends persist, the chance
of a broad RRR cut is likely to rise accordingly in order to neutralise the impact of slower
capital inflows on domestic liquidity conditions.
On the real side of the economy, signs of a cyclical pick-up are increasing. In June both
the HSBC and the official PMI recorded better readings, particularly the HSBC PMI. However
downside risks in the property sector remain and property prices declined further in May.
Out of the 70 major cities, 34 cities registered a price decline (m/m basis) in May versus
only 10 cities in April. The number of cities that saw a price increase in May was only 18
cities versus 47 cities in April. The Government has already tried to introduce offsetting
measures including asking banks to distribute mortgages in a timely manner.
In addition, the anti-corruption campaign has escalated again with a formal accusation against
Xu Caihou that he has accepted bribes, a top military official and so far the highest level
government official that has been arrested since the start of the anti-corruption campaign
early last year. In addition, the anti-corruption campaign has now spilled to the financial
sector, with several banking managers being arrested for malpractice of loan approval in exchange
of bribes.
Enquiries Northern Trust International Fund Administration Services (Guernsey) Limited
Harry Rouillard +44 (0) 1481 74 5315
Important Legal Information and Disclaimer
BH Macro Limited ("BHM") is a feeder fund investing in Brevan
Howard Master Fund Limited (the "Fund"). Brevan Howard Capital
Management LP ("BHCM") has supplied certain information herein
regarding BHM's and the Fund's performance and outlook.
The material relating to BHM and the Fund included in this
report is provided for information purposes only, does not
constitute an invitation or offer to subscribe for or purchase
shares in BHM or the Fund and is not intended to constitute
"marketing" of either BHM or the Fund as such term is understood
for the purposes of the Alternative Investment Fund Managers
Directive as it has been implemented in states of the European
Economic Area. This material is not intended to provide a
sufficient basis on which to make an investment decision.
Information and opinions presented in this material relating to BHM
and the Fund have been obtained or derived from sources believed to
be reliable, but none of BHM, the Fund or BHCM make any
representation as to their accuracy or completeness. Any estimates
may be subject to error and significant fluctuation, especially
during periods of high market volatility or disruption. Any
estimates should be taken as indicative values only and no reliance
should be placed on them. Estimated results, performance or
achievements may materially differ from any actual results,
performance or achievements. Except as required by applicable law,
BHM, the Fund and BHCM expressly disclaim any obligations to update
or revise such estimates to reflect any change in expectations, new
information, subsequent events or otherwise.
Tax treatment depends on the individual circumstances of each
investor in BHM and may be subject to change in the future. Returns
may increase or decrease as a result of currency fluctuations.
You should note that, if you invest in BHM, your capital will be
at risk and you may therefore lose some or all of any amount that
you choose to invest. This material is not intended to constitute,
and should not be construed as, investment advice. All investments
are subject to risk. You are advised to seek expert legal,
financial, tax and other professional advice before making any
investment decisions.
THE VALUE OF INVESTMENTS CAN GO DOWN AS WELL AS UP. YOU MAY NOT
GET BACK THE AMOUNT ORIGINALLY INVESTED AND YOU MAY LOSE ALL OF
YOUR INVESTMENT. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF
FUTURE RESULTS.
Risk Factors
Acquiring shares in BHM may expose an investor to a significant
risk of losing all of the amount invested. Any person who is in any
doubt about investing in BHM (and therefore gaining exposure to the
Fund) should consult an authorised person specialising in advising
on such investments. Any person acquiring shares in BHM must be
able to bear the risks involved. These include the following:
-- The Fund is speculative and involves substantial risk.
-- The Fund will be leveraged and will engage in speculative
investment practices that may increase the risk of investment loss.
The Fund may invest in illiquid securities.
-- Past results of the Fund's investment managers are not
necessarily indicative of future performance of the Fund, and the
Fund's performance may be volatile.
-- An investor could lose all or a substantial amount of his or
her investment.
-- The Fund's investment managers have total investment and
trading authority over the Fund, and the Fund is dependent upon the
services of the investment managers.
-- Investments in the Fund are subject to restrictions on
withdrawal or redemption and should be considered illiquid. There
is no secondary market for investors' interests in the Fund and
none is expected to develop.
-- The investment managers' incentive compensation, fees and
expenses may offset the Fund's trading and investment profits.
-- The Fund is not required to provide periodic pricing or
valuation information to investors with respect to individual
investments.
-- The Fund is not subject to the same regulatory requirements
as mutual funds.
-- A portion of the trades executed for the Fund may take place
on foreign markets.
-- The Fund and its investment managers are subject to conflicts
of interest.
-- The Fund is dependent on the services of certain key
personnel, and, were certain or all of them to become unavailable,
the Fund may prematurely terminate.
-- The Fund's managers will receive performance-based
compensation. Such compensation may give such managers an incentive
to make riskier investments than they otherwise would.
-- The Fund may make investments in securities of issuers in
emerging markets. Investment in emerging markets involve particular
risks, such as less strict market regulation, increased likelihood
of severe inflation, unstable currencies, war, expropriation of
property, limitations on foreign investments, increased market
volatility, less favourable or unstable tax provisions, illiquid
markets and social and political upheaval.
The above summary risk factors do not purport to be a complete
description of the relevant risks of an investment in shares of BHM
or the Fund and therefore reference should be made to publicly
available documents and information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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