Last checked at 22 Sep 2022 07:00
BH Macro (BHMG)
22/09/2022
Results analysis from Kepler Trust Intelligence
Over the first half of the year to 30 June 2022 the BH Macro (BHMG) share price has increased significantly, despite (or indeed, perhaps, because of) the very difficult background for investment markets. Over the first half of 2022, the Net Asset Value ("NAV") per Sterling share in the Company increased by 15.53% and the NAV per US Dollar share increased by 14.11%.
BH Macro's Chairman, Richard Horlick said: "it is gratifying that your confidence in the Manager, and the new [management fee] arrangements, have been so well rewarded. Moreover, the shares, whilst generating very good absolute returns, have also provided even better returns when compared to most other investable asset classes."
Kepler View
In the interim statement, the Manager observes that going into the second half of the year, Europe faces profound economic challenges. Brevan Howard comment that the European Central Bank ("ECB") appears in an especially parlous position. They believe that the global macro environment is "complicated, challenging and changing at a fast pace".
In our view, this is precisely why investors have been attracted to BH Macro (BHMG), reflected in the premium to NAV which the shares have been trading on. BHMG has historically delivered positive returns in 17 of the 20 worst performing months for equities since IPO in 2007. Indeed, the strongest periods of performance have come at times of stress for equity and, more latterly, bond markets.
Currently the shares trade on a premium to NAV of 14.5%. Broadly, we would emphasise caution on the current level of premium for a closed-end fund. That said, over the long-term, Brevan Howard Master Fund Limited into which BHMG invests, has delivered clear diversification from risk assets over its lifetime.
In the words of BH Macro's Chairman, "the investment strategy of the Company should continue to provide diversifying returns against what remains a very difficult background".
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