A low volatility global macro fund that prioritises capital preservation is a win-win for everybody. AVM Global Opportunity Fund’s Portfolio Manager Ashvin Murthy shares how it aims to deliver consistent healthy returns on capital to investors.
For Ashvin Murthy, AVM Global Opportunity Fund is all about creating win-win partnerships. “AVM are the initials of the names of my wife and I,” he says. “We have been a great team for almost two decades and counting, with Vanessa playing a big role in setting up the fund. Likewise, AVM Global is a win-win partnership with our investors. We aim to deliver consistent healthy returns on their capital.”
I have a very simple rule that is a key part of my strict risk management framework: how much am I willing to lose on it if I am wrong?
1. Swiss-Asia: Why did you start AVM Global Opportunity Fund? AVM Global: There’s nothing better than starting a new business you’re passionate about. I was exposed to investing in the last year of university and started dabbling in stocks and currencies soon after. I took a very quick liking to trading and aspired to have a fund of my own. After spending more than 10 years working in different trading positions in Singapore, London, Zurich and Hong Kong, I felt I had acquired the relevant experience to finally get my own fund off the ground.
2. SA: Are you risk-averse or risk-taking? A: Risk-taking. I like analysing markets and events. I’m not afraid of putting money to work if there’s an opportunity. That said, I am patient and do not put in new trades very often. I would rather put a sizeable wager on a high conviction trade, where I have done sufficient groundwork and am comfortable with the risk-reward scenario linked to the trade.
3. SA: As a portfolio manager, how do you overcome and manage your emotions? A: I have a very simple rule that is a key part of my strict risk management framework: how much am I willing to lose on it if I am wrong? This effectively dictates the size of my trade. Once that number is in my head, it is much easier to stay objective, since I have already accounted for the worst outcome in my analysis.
4. SA: Why did you launch your fund with Swiss-Asia? A: Setting up a fund management company and hiring a good COO is not easy. It is very time consuming, you may not have enough capital if your fund is not big enough. The Swiss-Asia platform allowed me to kick off using an asset light approach with relatively low fixed costs. With a great team that takes care of daily operations and a strong legal and compliance framework to support it, I am able to spend almost all my time focusing on my portfolio.
Fund raising is also an important part of the business. I’m glad Swiss Asia has a team dedicated to capital introductions that can put me in front of a diverse pool of investors through their extensive network. It’s a task that requires the right relationships, something I would not have been able to do if I was on my own.
5. SA: Are you set for a spectacular year in 2017? A: I certainly hope so! In the next six months, markets are going to remain volatile. There is just so much uncertainty right now on the political front with the rise of populism globally. I think one of the big advantages of AVM Global is the multi-asset approach that allows me to get involved in interesting opportunities across different asset classes.
Most of my positions have a six to 12 month investment horizon and I’m quite comfortable with the positions at the moment. That being said, you have to be very nimble in this volatile investing environment and that is one of the big advantages of running a liquid portfolio where the positions are not too big for this market.
6. SA: So this 2017, POTUS is going to… A: Try very hard to make us believe that he will make America great again.
7. SA: What about Europe? A: Brexit is going to create a lot of uncertainty on the ground, and reduce longer term investment in the UK.
8. SA: And macro-trading this year… A: Is going to be very exciting. Probably the most eventful year since 2012.
9. SA: Last but not least, do you have a daily ritual that helps you focus on the fund? A: I am a fitness enthusiast and start off everyday with exercise, a habit I cultivated at an early age from my father. Exercise gets me energized! It helps me stay sharp during the trading day.
When I get into the office, I’m in top form to review the performance of positions in my portfolio and look out for any news or events that may affect them. Many portfolio managers spend a lot of time looking out for new trading ideas, but I like to spend more time analyzing existing trades and making sure I’m on top of them.