TIDMREC
RNS Number : 5362E
Record PLC
19 October 2018
RECORD PLC
SECOND QUARTER TRADING UPDATE
Record plc ("Record" or "the Company"), the specialist currency
manager, announces today that the Group's assets under management
equivalents ("AUME") as at 30(th) September 2018 totalled $61.8
billion (30(th) June 2018: $61.9 billion).
AUME expressed in sterling as at 30(th) September 2018 totalled
GBP47.4 billion (30(th) June 2018: GBP46.9 billion).
1. AUME composition
AUME expressed in US dollars decreased by 0.2% between 30(th)
June 2018 and 30(th) September 2018 and increased by 1.1% when
expressed in sterling. The composition of AUME by product was as
follows:
AUME $ billion
30(th) September 30(th) June 2018
2018
----------------- -----------------
Dynamic Hedging 4.4 4.3
Passive Hedging 51.7 52.0
Currency for Return 2.4 2.3
Multi-Product 3.0 3.0
----------------- -----------------
Cash & Futures 0.3 0.3
----------------- -----------------
Total 61.8 61.9
----------------- -----------------
2. AUME Movement
Net client AUME flows in the three months to 30(th) September
2018 by product were as follows:
Net client AUME flows - $ billion
3 months to 30(th) 3 months to 30(th)
September 2018 June 2018
------------------- -------------------
Dynamic Hedging - 0.4
Passive Hedging (0.6) (0.4)
Currency for Return - 0.6
Multi-Product - -
------------------- -------------------
Cash & Futures - -
------------------- -------------------
Total (0.6) 0.6
------------------- -------------------
Record had 66 clients at 30(th) September 2018 (30(th) June
2018: 64 clients). Record has been notified of the termination of
Passive Hedging mandates for two commercial relationships,
totalling up to $2.5 billion in AUME at 30(th) September 2018 and
representing up to seven clients, expected during the current
quarter.
Other than client flows, the factors which have had an aggregate
impact on AUME during the quarter of +$0.5 billion were as
follows:
(i) Movements in global stock and other markets: +$0.1bn
Substantially all the Passive and Dynamic Hedging, and some of
the Multi-Product mandates, are linked to stock and other market
levels. Consequently AUME may be affected by movements in these
markets.
(ii) Exchange rate movements and mandate volatility targeting: +$0.4bn
Exchange rate movements during the period affect the conversion
of non-US dollar mandate sizes into US dollar AUME. In addition
certain Currency for Return mandates targeting a specific
volatility target may be scaled up or down.
3. Investment performance
For US Dynamic Hedging clients during the quarter, hedging
returns in the programmes were positive as the US dollar generally
strengthened against the weighted basket of hedged currencies.
Investment performance of the FTSE Currency FRB10 index (excess
return in sterling) during the three months to 30(th) September
2018 was -0.40% (three months to 30(th) June 2018 was 1.18%). The
FTSE FRB10 Index Fund continued to track the benchmark index
closely, on a 1.8x geared basis.
Record's Emerging Market product investment performance was
negative during the quarter and for an un-geared portfolio equated
to a quarterly return of -1.24% (three months to 30(th) June 2018:
return of -2.41%). Annualised performance since inception (30(th)
November 2009) for an un-geared portfolio was +1.53% p.a.
Investment performance in the Multi-Strategy product that
comprises the FTSE Currency FRB10, Emerging Market, Value and
Momentum strategies was negative during the quarter. For an
un-geared portfolio, the return was -0.74% over the quarter (three
months to 30(th) June 2018: return of -1.09%). Annualised
performance since inception (31(st) July 2012) for Record's
longest-standing Multi-Strategy mandate on an un-geared portfolio
basis is +0.89% p.a.
4. AVERAGE FEE RATES AND PERFORMANCE FEES
During the quarter to 30(th) September 2018, fee rates for most
products remained broadly unchanged from the previous quarter,
taking into account the mix of management fee-only and management
plus performance fee mandates. No performance fees were earned in
the quarter.
5. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on business
development, said:
"We continue to invest in enhancing both our client service
levels and product offerings.
"Our commitment to deliver a premium service, including best
execution and full price transparency to clients, was strengthened
during the period through the engagement of New Change FX, an
independent provider of foreign exchange data.
"We extended our licensing relationship with WisdomTree Asset
Management, Inc. during the quarter to provide currency signals in
connection with a new range of models-based active exchange-traded
funds. This includes the development of a new approach to emerging
market currency hedging which provides an innovative way to manage
this currency risk and which we are confident can be applied in a
broad number of contexts.
"We are seeing an encouraging range of new business
opportunities across products and geographies, although this has to
be balanced against continued competition and fee pressure in
passive hedging in particular. With our diversified product suite
and our ability to offer tailored solutions to clients and
potential clients, we aim to make further progress in the second
half of the financial year."
Record will announce its half year results on 23(rd) November
2018 and its third quarter trading update on 18(th) January
2019.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
James Wood-Collins, Chief Executive Officer
Steve Cullen, Chief Finance Officer
MHP Tel: +44 (0) 20 3128 8100
Nick Denton record@mhpc.com
Ollie Hoare
Notes to Editors
Record plc
Record is a specialist currency manager and provider of currency
hedging services for institutional clients. Founded in 1983, Record
has established a market leading position as a currency manager.
Specifically, the Group has a leading position in managing Currency
Hedging and Currency for Return for institutional clients.
The Group has four principal reporting lines:
- Dynamic Hedging, where Record seeks to eliminate the impact of
currency movements on elements of clients' investment portfolios
that are denominated in foreign currencies when these movements are
expected to result in an economic loss to the client, but not to do
so when they are expected to result in an economic gain;
- Passive Hedging, where Record seeks to eliminate fully or
partially the economic impact of currency movements on elements of
clients' investment portfolios that are denominated in foreign
currencies;
- Currency for Return, in which Record enters into currency
contracts for clients with the objective of generating positive
returns; and
- Multi-Product, where the client mandate includes combined
hedging and return-seeking objectives.
Record (LSE: REC) was admitted to trading on the London Stock
Exchange on 3(rd) December 2007.
This announcement includes information with respect to Record's
financial condition, its results of operations and business,
strategy, plans and objectives. All statements in this document,
other than statements of historical fact, including words such as
"anticipates", "expects", "intends", "plans", "believes", "seeks",
"estimates", "may", "will", "continue", "project" and similar
expressions, are forward-looking statements.
These forward-looking statements are not guarantees of the
Company's future performance and are subject to risks,
uncertainties and assumptions that could cause the actual future
results, performance or achievements of the Company to differ
materially from those expressed in or implied by such
forward-looking statements.
The forward-looking statements contained in this document are
based on numerous assumptions regarding Record's present and future
business and strategy and speak only as at the date of this
announcement.
The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained in this announcement whether as a result of
new information, future events or otherwise.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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