Puma Sphera, Class A ($): KYG7301Y1098
Puma Sphera, Class C (£): KYG7301Y1098
About Puma Sphera
Puma Sphera is an equity long/short, single-manager strategy, with a focus on Israeli-related stocks. The fund is driven by high alpha bottom-up stockpicking based on very close knowledge of investee company management teams, and offers access to the proven expertise of Sphera Fund Management of Tel Aviv. The Strategy has produced an average annual gain of 17.14% since 2001.
To invest in Puma Sphera please contact Hugh Rogers on +44 (0) 207 408 4067.
Manager’s Monthly Commentary
Sphera significantly outperformed our relevant equity markets in November by returning an estimated 0.1% vs. -3.6% for Tel-Aviv 100 and negative returns for U.S. and European markets. Each month seems to bring with it a new challenge. This time, global markets were once more on edge for most of the month, struck by the deteriorating economic prospects of the Euro zone. Sphera was able to avoid the heightened volatility and generate a modest positive return by focusing on capital preservation and disciplined stock picking.
The last few months saw a series of policy announcements and measures made by European officials trying to stem the rising debt crisis but which mostly fell short of any credible long term solution. But just when markets clearly seemed to be on the edge of giving up hope following another failed attempt by politicians to ease stress in European markets, the Fed made a surprise move by opening up liquidity lines to increasingly constrained European banks. Consequently, equity markets staged a powerful U-turn, recovering a portion of their monthly losses.
Given how dysfunctional the European leadership has become, we remain skeptical of its ability to form a unified and credible solution which will restore confidence and drive down periphery yields to more normalised levels. We assess that the very different nature and mentality of each European society will make it close to impossible for all of them to be subjected to a single fiscal regime. In the meantime, we believe that central banks will put their best effort and their entire set of tools to use to try and increase liquidity in the markets.
Like most markets recently, the Israeli stock market has been heavily impacted by the events in Europe and performance of U.S markets. Despite that, the economy in Israel has been sailing quite smoothly by maintaining a healthy balance sheet and disciplined budget parameters. Although we expect markets to continue to be quite volatile and sometimes unpredictable, we strongly believe that there are opportunists to outperform markets through long/short and hedging strategies.
The current high levels of volatility in the markets requires us to be more nimble and flexible as far to the composition and size of our equity portfolio. As such, we attempt to be more tactical in the near term with our stock allocation by placing a larger emphasis on macro direction and funds flow.
Our portfolio's net exposure currently stands around 35%-40% with a relatively low market Beta. Some of the underlying themes in the portfolio include: long and short positions in the telecommunications industry (long Bezeq, short cellular), long positions in stable, low leverage real estate firms that specialize in the Israeli market against short positions in highly-leveraged development real estate firms with meaningful exposure to European markets. Other holdings include exposure to the local natural gas exploration sector (Avner, Delek Drilling) and several technology holdings (Mellanox, Nova and more).
Shore Capital Stockbrokers Limited is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority.
Shore Capital Limited and Shore Capital and Corporate Limited are authorised and regulated by the Financial Services Authority.
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