NEWS - 33

The large hedge funds die

Dec 02, 2014, By Anneliese Proissl

World's 461 Hede Fund had to give up alone until mid-year. The industry rubs up between fluctuation-poor markets, offer little chance of price gains, low interest rates and failed bets on macroeconomic development. Two particularly bloody years behind the industry.

Already the first half of the year was a disaster for hedge funds. Fund research 461 Hede Fund had to give up according to HFR hedge US consulting company alone until mid-year. Already in the previous year, the air went out 904 Fund due to persistent lack of success. Only 2009 as 1.023 from the financial crisis have been swept away, it was worse.

The latest victim in the futile struggle of returns: Brevan Howard Asset Management. The Fund managed by Stephane Nicolas had $630 million available to multiply the money of the investors. Only the gains remained, out despite some risky investment strategies. So the investors in the Fund have lost journals of Wall Street more than four percent in the past two years, according to data. Before the Fund pulled the ripcord, the yield has fallen by ten percent, even in September. The company's two funds have closed this year. One of the most famous cases in the German-speaking countries, in which a hedge fund was closed, was the DWS, which already 2010 has retreated from the hedge fund business.

Macroeconomic policies brought to many Fund case

Many hedge funds, which have speculated on macroeconomic trends and this year an average came to less than a percent yield, have given up. As one of the main reasons they called most, that it is difficult in an environment with low interest rates and little price volatility to earn money.

Minor restrictions, high risk

Many of the funds that were not in the position to offer positive returns, investors pursuing a global macro strategy, include also speculation on interest rates according to Bloomberg. Global macro Fund set up the fewest restrictions. You want to benefit economically unjustified price differences around the world. Basically you worldwide for all markets are open. However, many funds focus on foreign exchange and interest rate markets. The most famous representatives of this Guild: George Soros and his quantum Fund. He had thus specialized in currency speculation and plunged into severe turbulence so all Governments such as those England, who was thus forced to devalue the pound strong. Soros earned at that time roughly a billion dollars with the bet on the falling pound.

45 billion dollars are bet on a rising dollar currently

In the recent past have speculated this global macro Fund, for example, on a depreciation of the euro. But for two years the currency appreciates continuously and vigorously. But the hedge fund managers do not give up. The prospect of a devaluation seem finally reach. In the first week in November, have become the new bullish trend bets on the dollar further and reached a record high of $45.7 billion. That emerges from current data of the CFTC's futures supervision. The euro is sold, however, solid. 28 billion dollars will be used on short positions. This corresponds to around 62 percent of betting dollars. The market was so pessimistic since August 2012 no longer. A more popular speculation at the beginning of the Greece crisis: The bet on the sovereign default. The problem: You strengthen a trend, through their considerable financial strength which can have a negative effect on the economic situation of a country.

Many Austro hedge funds in the minus

Many funds for the little guy, which are available in this country and pursue alternative hedge fund strategies, are affected. So many in this country popular hedge funds of funds on an annual basis is deep red. The Espa alternative global markets of the erste Sparinvest lost this year already 6.6 per cent, the strategic commodity Fund of Spängler Bank recorded a decline of 6.5 percent. But there are also hedge fund managers that their ship successfully through the storm manövieren. The Salus Alpha directional brand of Valartis Bank has this year 16.8 percent, in the previous year were 15.4 percent. The Fund seeks tendencies on the global markets profitably capitalize (interest rates, currencies, bonds, commodities and/or stocks).

News @ format.at

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NEWS - 31

Capital weighted benchmarks might have a negative effect on managed futures, says Salus Alpha's Ritesh Jain

By Ritesh Jain

June 5th, 2014

Ritesh Jain, analyst at Salus Alpha Capital, has looked at views on bench-marking as they affect managed futures funds.

Equity markets are today scaling new highs after a six year bull run, and many are asking how long it will continue. Commodity markets are struggling with high volatility and most trend-following managed futures funds are presently underperforming equities. Given the current risk-on/risk-off environment, systematic, trend-following strategies are struggling to perform. But does this mean there are no trends in the current low interest rate environment that they could be profiting from?

Paul Tudor Jones, a billionaire veteran of the industry, recently called the trading environment "as difficult as I've ever seen in my career." Tudor Investment Corp's main fund is down about 4% this year.

Most trend-following hedge funds have lost money, possibly because they were not able to be on the right side of the trend in a rallying market with a strong run-up in several commodities this year.

Sol Waksman, founder and president of BarclayHedge, says "trendless zigzagging equity markets, volatile commodity markets, and a difficult bond market" have contributed to poor performance this year.

The Newedge Trend index is down -2% this year as of end of May. The Newedge Trend Index is comprised of the largest 10 trend following managers based on assets under management.

So finding a managed futures strategy that produces robust risk-adjusted returns in this present environment is proving to be relatively challenging. Managed futures are not necessarily on a down-trend but investor expectations seem to be misguided. The principle role of managed futures funds, one could argue, is diversification rather than equity outperformance. But should they not also be capable of generating positive return in the current environment?

There is much data showing that the addition of CTAs to a diversified portfolio improves diversification as they tend to be uncorrelated to wider markets. Indeed, a portfolio without managed futures could be viewed like driving a car without insurance. But as in any type of insurance there are some you should buy and others you should not. So to extend the analogy; investing in managed futures funds with negative returns is like buying the wrong insurance policy.

Frank Seidel of Amandea Asset Management AG says that "virtually all systematic trend followers are stuck in a corrective phase, although the lows should be overcome in the meantime."

But these views look highly biased given that the data shows that the biggest guys are the ones that have been mostly down. Academic findings show that excessive assets under management have a negative influence on performance.

However it seems that investors are still pilling money into a handful of managers. And it appears that these managers are failing to deliver returns even when trends are predominantly noticeable. This is a problem of benchmarking. Investors are afraid to deviate from the benchmark and take decisions. But the opportunity is there.

Oliver Prock CIO of Salus Alpha says: Being up around 17% YTD, for us the year is excellent. We do not share the widespread complaints about the recent environment since there were huge positive trends in commodities and bonds while equities were stable so far this year. But maybe we are doing simply better than others since our model is adaptive and can switch between long term and short term and trend following and contrarian.

Capital weighted benchmarks or benchmark indices that equal weight the biggest managed futures funds in the industry seem to be a victim of their own success. The biggest managed futures models are deteriorating now due to the mere fact that they need to allocate huge capital. Smaller funds that tried to mimic the successful models of the big funds are also affected.

The investor challenge is obvious, but the solution may too be obvious: Picking smaller proven managed futures funds with proven ability to perform in all market environments might reward investors handsomely who deviate from the benchmark.

News @ InvestmentEurope.net

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NEWS - 30

Salus Alpha managed futures strat surges to 17% YTD

By Matt Smith

June 2nd, 2014

Salus Alpha has defied the struggles of the trend-following sector to return nearly 17% in its managed futures strategy over the first five months of the year, latest returns show.

The Salus Alpha Directional Markets strategy, which manages roughly $240m, hit a third consecutive month of gains in May, up 2.54%, to bring its YTD advance to 16.8%.

It comes as average YTD returns for the largest CTA managers climb into the black for the first time this year, according to Newedge’s benchmark index. However the largest trend-followers remain, on average, in the red.

Liechtenstein based Salus Alpha Capital, a pioneer in developing Ucits hedge funds, believes that while the principle role of managed futures strategies is diversification rather than equity outperformance, they should be capable of generating positive return in the current environment.

Low interest rates, the risk on/risk off environment, trendless zigzagging equity markets, volatile commodities and a difficult bond market, have been variously cited as reasons for lacklustre managed futures returns this year.

CIO Oliver Prock said: “I cannot share in widespread complaints about the recent environment since trends that you can identify and profit from are clearly there.

“Our approach is very different to most CTA’s and is designed not only to provide huge insurance payoffs in times of stress but also enables us to make positive returns in market environments that seem to be tough for our peers.

“Our ability to generate returns in seemingly tough market conditions is like taking out car insurance but having your premium more than just repaid when you don’t make a claim.”

Salus’ Directional Markets Strategy is fully systematic and adaptive to market environments, switching between trend-following and contrarian approaches and short and long term time frames across 100 futures markets worldwide.

The strategy is offered on Deutsche Bank’s dbSelect platform or as an Ucits fund gaining exposure to eligible components of the Vienna Stock Exchange listed DMX – Directional Markets Index.

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NEWS - 26

Salus Alpha Analyst Award 2012

Analyst Award for courage and innovation

(LEFT TO RIGHT) Christian Drastil (Christian Drastil Comm.), Franz Hörl (Erste Group), Stefan Maxian (RCB), Günther Schneider (Salus Alpha), Thomas Neuhold (Kepler), Christine Reitsamer (Baader Bank), Richard Schenz (Kapitalmarktbeauftragter)

(Vienna/Mauren) On the 12th December 2012 the exclusive location of the Viennese “Haus der Industrie” became home to the 13th edition of the Salus Alpha Analyst Award 2012 – an event honoring analysts who have achieved the best research results in the Austrian Equity market. Salus Alpha is the main partner since 2011.

The laudatio was held by Günther Schneider, Head of Global Business Development at Salus Alpha: „We are proud of such excellent analysts, of their courage and innovation. We have once again looked for the best and we are proud to say we found them. Analysts who see themselves solely as advisor of the customer, thus, of the fund and asset manager, and who act accordingly have to be supported. At the end of the day you have to be more than just a good analyst to generate alpha.”

Salus Alpha and the Analyst Award have been connected quite a while. Roland Neuwirth, Fund Manager at Salus Alpha, is a 5-time winner of the Analyst Award. Therefore it was an especially great pleasure for Günther Schneider to present the winners of this year’s ceremony with their awards. The winners included among others Franz Hörl (Erste Group), Stefan Maxian (RCB), Thomas Neuhold (Kepler), Christine Reitsamer (Baader Bank).

About Salus Alpha

Salus Alpha, an Alternative Investments Manager, has established itself as a top expert in quantitative, systematic Asset Management over the past decade. The funds range from Long/Short Equities, Relative Value, Arbitrage to Managed Futures. The company’s extensive Know-How in the field of Alternative Investments is a characteristic of the company. The client base of Salus Alpha consists of institutional clients in Europe and Asia. Up to now the assets under management (AUM) of Salus Alpha have reached 1.1 billion USD. The company operates from a network of global offices including Switzerland, Liechtenstein, Austria, the Netherlands, Singapore, India, Sweden, USA, and Hong Kong. 

For further information on our products or distribution please contact: 

Salus Alpha Financial Services GmbH, Mag. Günther Schneider

Wegacker 42, 9493 Mauren, Liechtenstein

Tel: +423 399 03 29; invest@salusalpha.com

For further information, charts and graphical material please contact:

Salus Alpha Group Services GmbH, Ms. Jacqueline Nagy

Scherffenberggasse 3/8, 1180 Vienna, Austria

Tel: +43 1 9572587-42 ; public.relations@salusalpha.com

To know more click here - Salus Alpha Analyst Award 2012 - Complete report

NEWS - 25

Viennese firm seeks hedge fund and fund of fund acquisitions

Sep 17, 2012, By Beverly Chandler

(LEFT TO RIGHT) Jim Cone, Michael Browne, Marc de Kloe, Kathryn Kaminski, Oliver Prock, Anthony Torriani, Matthias Knab

Oliver Prock, chief executive officer and chief investment officer of Vienna and Liechstenstein based Salus Alpha Group AG is in the market to buy other alternatives businesses. In an interview with Opalesque, Prock said: "We are interested in buying other businesses, either funds of funds run by people that are done with the business and want to have a change, or maybe single strategy funds of any type where there is a problem with distribution or marketing."

The firm was founded in 2001 by Prock and a team from Erste Bank in Vienna, where they had been responsible for funds of funds and other alternatives.

Prock says: "We felt that the offshore structures for the domestic market that were being offered would be under siege in the future, so our business plan was to create onshore daily liquid products."

This they did by bringing out a UCITS I hedge fund based fund. "We were the first to offer an alternative UCITS in 2003" Prock says. The firm has now grown to 50 people and funds under management of $1bn, with offices worldwide in Vienna, Liechtenstein, India, Stockholm and Hong Kong among other places.

They now focus on specialised funds, structured products and managed accounts for institutions such as pension funds, insurance companies and family offices. The firm started with the retail product UCITS, "because there was no choice of professional UCITS funds so we started with UCITS for all our clientele", Prock says.

Early days saw the firm offering a fund of funds and in-house managing investment strategies as managed accounts. "We didn’t actively market them" says Prock. "When UCITS I became UCITS III, it became possible to have it in an index format so we moved the in-house strategies from their managed account structure to a publicly available UCITS fund in 2007." Their flagship fund, the Directional Markets fund has been running since 2003, firstly as a managed account and then as a fund from 1st December 2008, with an annualised return of 15% since 2003. It is based on a quantitative research model derived by the firm’s research team in Vienna, Liechtenstein and India and it is registered in Vienna.

"It is a CTA portfolio managed on a quantitative basis, covering bonds, equities, commodities and so on but the difference is that there is no technical analysis involved – it is based purely on statistics and price forecasting" Prock says.

The fund’s prospectus lists assets selected for Salus Alpha Directional Markets as predominantly financial indices employing the commodity trading advisors (CTA) management strategy. Shares in investment funds may amount to a maximum of 10% of Salus Alpha Directional Markets’ fund assets and according to the investment strategy, money market instruments may comprise up to 100% of the fund assets.

The fund has a Sharpe ratio of above 1, meaning that for every 1% of return, the fund is taking less than 1% of risk. It has a 34% correlation with Winton, according to Prock. Salus Alpha has a European passport through its Liechtenstein license and plans, according to Prock, to move into the US sometime in the future.

Salus Alpha sponsored and attended the recent Opalesque Roundtable in Monaco. 

NEWS - 22

Three top placing for Salus Alpha funds

June 03, 2012

Vienna (www.fondscheck.de) – Three of Salus Alpha’s funds received the “Alternative Investments Award 2012 of GELD-Magazin”, the company said in its latest press release.

For details, please refer to the wording of the press release:

The company left its competitors far behind and was awarded with 3 top rankings. The Salus Alpha Commodity Arbitrage Fund won the 1st Place in the category of managed futures: commodities (1-year rating), Salus Alpha Directional Markets was awarded the 2nd Place in the managed futures category (3-year rating), and Salus Alpha Equity Hedged awarded the 3rd Place in the category Long / Short Equity (1-year rating).

Comment of Mr. Oliver Prock (CEO/CIO Salus Alpha): “These awards again recognize the value added by Salus Alpha quantitative strategies to an investor’s portfolio. Top rankings in the ‘Managed Futures’ peergroup give proof that we take pride in our risk management above all else, which allows us to consistently attain alpha during the most volatile of market conditions.”

About Salus Alpha:

Salus Alpha, an Alternative Investments Manager, has established itself as a top expert in quantitative, systematic Asset Management over the past decade. The funds range from Long/Short Equities, Relative Value, Arbitrage to Managed Futures. Salus Alpha’s extensive experience in Alternative Investments distinguishes the company. The company’s extensive Know-How in the field of Alternative Investments is a characteristic of the company. The client base of Salus Alpha consists of institutional clients in Europe and Asia. Up to now the assets under management (AUM) of Salus Alpha have reached 1.1 billion USD. The company operates from a network of global offices including Switzerland, Liechtenstein, Austria, the Netherlands, Singapore, India, Sweden, USA, and Hong Kong.

For further information, please contact: public.relations@salusalpha.com

INTERVIEW - 2

CTA review: Salus Alpha

17/01/2012

Stockholm (HedgeFonder.nu) - We asked the players in the CTA / Managed futures world to give us their views on the 2011 in general terms for CTA / Managed Futures industry in general and their own trading strategies in particular. Editorial on HedgeFonder.nu formulated consciously call in rather vague and unspecific terms for providing such a diverse picture of the industry as possible. We also asked them to make an outlook for 2012 and the future of the CTA, which we realize is difficult for systematic traders. The contributions we receive will be published unedited and uncommented.

Markus Rudling, Managing Director – Salus Alpha Financial Services Nordic (Bild):

Goodbye 2011!

Most strategists and analysts were unanimous in early 2011 for that year looked promising and that the stock market, like 2010, would deliver solid gains and that we would get an increase of around 20%. 2011 was, however, in history as a very turbulent and eventful year. After a few stable months after the end of the world came to be dominated by the earthquake in Japan in March that made ​​the markets react with volatility to soar. Fukushima was only related to late summer and autumn's big show where the global debt problem really got into everyone's focus. Greece was close to a complete collapse, several European countries were not far behind and the U.S. had its credit rating cut for the first time in history, although the problems even towering up in the Chinese sky. In addition, rising parts of the Arab world in a popular uprising against the outdated structures with a hard past and undemocratic leaders. In such a deep and widespread crisis came to the market's gaze is directed towards that part of the world where the situation was most acute - Europe! The euro and the EU was the first time since collaborated started in a significant political and financial crisis of confidence which Europe increasingly emerged as a house of cards at any moment might fall apart. The market is analyzed every word that was said or not said by European politicians and the major central banks. Every day the market was thrown between hope and despair with huge price swings in all asset classes as a result. The concept of volatility given a new meaning. In the autumn went equity, commodity markets and the euro in a major fall when institutional investors sold risk in favor of "safe haven" in the form of U.S. and German government securities and precious metals, gold in the lead, all of which showed record levels. Like the financial crisis of 2008 was sold government securities on several occasions to a negative rate. Investors borrowed hence the money for a guaranteed loss in exchange for getting rid of both counterparty risk strategy risk. A signal that is perhaps more clearly than anyone that the financial system is in substantial sway.

When summarizing 2011 based on the strategy Managed Futures, you should conclude that the systematic trend following managers generally had the tricky, with the fact that volatility was driven by the macro data and political maneuvering, generating large and erratic price movements down to a daily basis with no clear trends. Buy and sell signals that the models created were anything but reliable when fundamentals were missing altogether. The few trends that strategy succeeded in capturing found primarily in fixed income markets and to some extent even among precious metals even if the price of gold at the end of the year fell into the same track equity indices, currencies and other commodities with high volatility and one-strike prices. The insurance against the sharply falling share prices as the strategy showed up in the record year 2008 were conspicuous by their absence this year. But despite the lack of positive returns from Managed Futures as a whole it was nevertheless one of the strategies that performed best in a market that was anything but simple. Only pure arbitrage and market neutral strategies were able to manage the volatility of the market and ultimately generated the low returns for investors that otherwise saw their portfolios drop in value across the board.

Hello 2012!

Studies show that after each decline in Managed Futures given investors the opportunity to go into low and beneficial levels when downturns have historically been followed by a sharp rise and also the recovery period is relatively short compared to other strategies.

It was also the trustee RPM Risk and Portfolio Management mentioned earlier in this commentary series, ie., the Managed Futures historical are "mean reverting" about his own positive mean value with a distinct "Upward bias." An average of risk-adjusted is very advantageous compared to other asset classes and hedge fund strategies and also completely uncorrelated to equity and bond markets over time.

Another important point is that the Managed Futures strategy, which is virtually impossible to time. With this insight should be the strategy should always be considered in an overall portfolio. Managed Futures ability to take advantage of trends and cycles in all asset classes and sectors is unique and the strategy becomes increasingly important as the world becomes smaller by the day, financial markets are increasingly interconnected and assemblies in the equity markets, with a more frequent interval. The time when the shares over time was a superior location and the concept of diversification was to put in 10 to 15 shares and not in one or two shares are definitely over.

Our own CTA, Salus Alpha Directional Markets, went on the first negative year ever since its inception in March 2003. The Fund is based on a pure statistical model that predicts future price levels of close to 100 underlying futures contract. Thanks to the daily forecasts and their evaluation based on the direction and quality, the model is highly adaptive and can switch between different time horizons and strategies, that is, between short-and long-term and intermediate trend and "contrarian". Salus Alpha Directional Markets since its inception in March 2003 generated a total return of 346% with an annual average annual return of 17.3% at a volatility of 14% and a rolling beta and alpha on an annual basis to OMX Stockholm 30 at -0.08 and 16.52%.

The baseline risk of Salus Alpha Directional Markets can be found at Deutsche Bank's Managed Account Platform and thus can be accessed with full transparency and daily valuation by products such as Unfunded Total Return Swaps, Managed Accounts, UCITS III funds and structured products. The platform is called the risk "DMX - Directional Markets Index," which is a publicly listed investment index offense (a portfolio) with daily valuation that is actively managed by Salus Alpha Capital.

Despite the events in the market in 2011, analysis of historical data to Managed Futures continues to act as insurance against sharp fall in stock markets: after a decline of 3% or more of the Managed Futures is the average rise in strategy 7.7%. If equity markets continue to fall during the recovery period, we see that the average excess return in relation to shares in relation to amount to 15.8%.

What will happen in 2012, or the year ends, we can not predict. But it is clear that the problems that the world experienced in 2011 have not been resolved and that a potential solution will take time, resources and relationships of claim. The question most people ask is: Who will pay, what it will cost and what does the result look like? It is notable that Sweden perhaps for the first time in modern history is in a situation of economic and political stability that makes most of our European neighbors will be green with envy. In today's global world, with the financial markets are now fully interconnected, did it not, however, Swedish investors when they saw the Stockholm Stock Exchange (OMX Stockholm 30) in a year low of -26.7% as of September 23. October, however, offered a hefty recoil of almost 11.5% which was the Stockholm Stock Exchange to park at -16.1% at year end.

NEWS - 16

Salus Alpha products outperform equity markets

Thu, 10/11/2011

For the year up to 31/10/2011, all Salus Alpha Funds clearly outperformed global equity markets in a difficult environment.

The Salus Alpha Commodity Arbitrage had a performance of +4.84% for the year to date until , while the US S&P 500 Index lost -0.35%, and the German DAX30 index lost -11.18% in the same period. This is an outperformance against the S&P 500 Index of +5.19% and against the DAX 30 Index of +16.02%.

In such a difficult market environment, this outperformance results from the employment of an active management approach and from the diversification over numerous strategies and substrategies.

The Salus Alpha RN Special Situations had a performance of +3.76% for the month to date.

The Salus Alpha Real Estate had a performance of +1.98% for the month to date. Salus Alpha Real Estate is a single manager single strategy fund, which invests according to Salus Alpha’s proprietary Global Real Estate Model. The fund currently has an exposure of 100% to the Real Estate markets. Salus Alpha Real Estate has been awarded a 5 Star Rating by www.fondsprofessionell.de for its exceptional performance since inception on 21 January 2008. The fund outperformed the EPRA/NAREIT Real Estate Index by +23.14% in this timespan.

The Salus Alpha Event Driven had a performance of +0.72% for the month to date; the Salus Alpha Multi Style had a performance of +0.72% for the month to date; the Salus Alpha Managed Futures had a performance of -0.18% for the month to date; and the Salus Alpha Directional Markets had a performance of -1.00% for the month to date.

The Salus Alpha Equity Hedged had a performance of +3.18% for the year to date until 10/31/2011, outperforming the S&P 500 Index by +3.53%. The Salus Alpha Equity Hedged currently has a 14% exposure to Long Bias, 34% to Market Neutral, 22% to Long Short Variable Bias,  and 30% to Short Bias.

The Salus Alpha Commodity Arbitrage had a performance of +4.84% for the year to date until 10/31/2011, outperforming the S&P 500 Index by +5.19%. The fund outperformed the S&P GSCI Index by 2.29%, which booked a gain of 2.55% in the reporting period. The 12 month rolling alpha of Salus Alpha Commodity Arbitrage to the S&P500 is 4% p.a., the 12 month rolling beta is currently -0.1. This implies that in the past 12 months, the Salus Alpha Commodity Arbitrage had a return of 4% due to active management (alpha).

Salus Alpha Commodity Arbitrage tracks the CAX - Commodity Arbitrage Index. The CAX Index covers the performance of arbitrage strategies, which aim to extract consistent market neutral returns from valuation inefficiencies arising among related commodities - like for example Brent Crude vs. WTI Light Sweet Crude - or among different maturities of futures contracts on one commodity due to Contango, Backwardation and Seasonality.

Contango denotes a market situation where longer-dated commodity futures are priced higher than shorter-dated commodity futures. Markets in contango are characterised by low demand relative to available supply. In these markets, investors holding a long position suffer a roll loss when selling expiring contracts at low prices, and buying new contracts as higher prices. The CAX Index currently has a 10.00% spread position in Wheat, which is currently 24.70% p.a. contangoed.

NEWS - 12

Salus Alpha products outperform equity markets

Mon, 12/09/2011

For the year to 31 August 2011, all Salus Alpha Funds clearly outperformed global equity markets in a difficult environment.

The Salus Alpha Commodity Arbitrage had a performance of +9.13% for the year , while the US S&P 500 Index lost 3.08%, and the German DAX30 index lost 16.33% in the same period. This is an outperformance against the S&P 500 Index of +12.21% and against the DAX 30 Index of +25.46%.

Other products managed by Salus Alpha performed as follows for the year to date until 8/31/2011:  

Salus Alpha Commodity Arbitrage: +9.13% 

Salus Alpha Equity Hedged: +6.34% 

Salus Alpha Event Driven: +2.49%  

In such a difficult market environment, this outperformance results from the employment of an active management approach and from the diversification over numerous strategies and substrategies.

The Salus Alpha Real Estate had a performance of +0.68% for the month to date, outperforming the EPRA / NAREIT Index by +8.93%. The 12 month rolling alpha of Salus Alpha Real Estate to the Epra/Nareit Europe Index  is 7% p.a., the 12 month rolling beta is currently 0.2. This implies that in the past 12 months, the fund had a return of approximately 7% due to active management (alpha), and 0.19% return due to the positive market beta.

Salus Alpha Real Estate is a single manager single strategy fund, which invests according to Salus Alpha’s proprietary Global Real Estate Model. The Salus Alpha Real Estate outperformed the EPRA/NAREIT Real Estate Index by 8.93% and the GPR 250 Europe Index by 6.14% during the month of August. The fund currently has an exposure of 42% to the Real Estate markets.

Salus Alpha Real Estate has been awarded a 5 Star Rating by www.fondsprofessionell.de for its exceptional performance since inception on 21 January 2008. The fund outperformed the EPRA/NAREIT Real Estate Index by +22.30% in this timespan.

The Salus Alpha Commodity Arbitrage had a performance of +0.38% for the month to date, outperforming the S&P 500 Index by +6.06%. The fund outperformed the S&P GSCI Index by 2.04%, which booked a loss of -1.66% in the reporting period. The 12 month rolling alpha of Salus Alpha Commodity Arbitrage to the S&P500 is 9% p.a., the 12 month rolling beta is currently 0.0. This implies that in the past 12 months, the Salus Alpha Commodity Arbitrage had a return of 9% due to active management (alpha). Salus Alpha Commodity Arbitrage tracks the CAX - Commodity Arbitrage Index.

The CAX Index covers the performance of arbitrage strategies, which aim to extract consistent market neutral returns from valuation inefficiencies arising among related commodities - like for example Brent Crude vs. WTI Light Sweet Crude - or among different maturities of futures contracts on one commodity due to Contango, Backwardation and Seasonality. Contango denotes a market situation where longer-dated commodity futures are priced higher than shorter-dated commodity futures. Markets in contango are characterized by low demand relative to available supply. In these markets, investors holding a long position suffer a roll loss when selling expiring contracts at low prices, and buying new contracts as higher prices. The CAX Index currently has a 4.85% spread position in Lean Hogs, which is currently 37.55% p.a. contangoed.   

The Salus Alpha Equity Hedged had a performance of +6.34% for the year to date until 8/31/2011, outperforming the S&P 500 Index by +9.42%. The 12 month rolling alpha of Salus Alpha Equity Hedged to the S&P500 is 6% p.a., the 12 month rolling beta is currently -0.1. This implies that in the past 12 months, the fund had a return of 6% due to active management (alpha). The Fund outperformed the HFRX Equity Hedge Index by 20.22%. The Salus Alpha Equity Hedged currently has a 14% exposure to Long Bias, 34% to Market Neutral, 22% to Long Short Variable Bias,  and 30% to Short Bias.  

The Salus Alpha Event Driven had a performance of +2.49% for the year to date until 8/31/2011, outperforming the S&P 500 Index by +5.57%. The fund's performance for the period was 5.41% higher than the performance of the HFRX Event Driven Index.  The SA FX Strategies had a performance of -0.67% for the month to date, outperforming the S&P 500 Index by +5.01%. The product outperformed the industry benchmark Barclay BTOP FX Index by 0.70%. The index had a return of -1.37%. The FX Managers in the SA FX Strategies Portfolio profited by the USD's weakness vs. Russian Rouble, Norwegian Krone, Canadian Dollar, Australian Dollar, Swedish Krone, British Pound, Swiss Franc, Singapore Dollar, Mexican Peso, Polish Zloty and Brazilian Real. The managers incurred losses due to the Dollar's strength vs. New Zealand Dollar, and due to the USD devaluation vs. Euro, Japanese Yen and Danish Krone.  

The Salus Alpha Directional Markets had a performance of -2.24% for the year to date until 8/31/2011, outperforming the S&P 500 Index by +0.84%.

The Salus Alpha Multi Style had a performance of -0.76% for the year to date until 8/31/2011, outperforming the S&P 500 Index by +2.32%. The fund's performance was 4.39% above the performance of HFRX Global Index for the period.  

The Salus Alpha RN Special Situations had a performance of -7.71% for the year to date until 8/31/2011.  

The Salus Alpha Managed Futures had a performance of -0.03% for the year to date until 8/31/2011, outperforming the S&P 500 Index by +3.05%. The fund's performance was 0.41% better than the performance of the HFRX Macro Index for the period.

NEWS - 10

Salus Alpha products outperform equity markets

Aug 15, 2011, 

In the current quarter, all Salus Alpha Funds  outperformed global equity markets in what has been a difficult environment. Salus Alpha Managed Futures led the way with a gain of 4.89% in the current quarter, while the US S&P 500 Index lost 2.15%, and the German DAX30 index declined 2.95% in the same period.

The 24 month rolling alpha of Salus Alpha Managed Futures compared to the S&P500 is 5% p.a, while the 24 month rolling beta is currently 0.2. This implies that in the past 24 months, the fund had a return of approximately 5% due to active management (alpha), and 0.40% return due to the positive market beta. The fund's performance was 4.50% better than the performance of the HFRX Macro Index for the period.

The CTAs, Global Macro and FX Managers in the Salus Alpha Managed Futures portfolio profited by continuing trends in Softs, Precious Metals, Industrial Metals, Financials, FX, Energy and Interest Rates.

The Salus Alpha Directional Markets had a performance of +4.64% for the month to date, outperforming the S&P 500 Index by 6.79%. The 12 month rolling alpha of Salus Alpha Directional Markets to the S&P500 is 4% p.a., the 12 month rolling beta is currently 0.2. The performance of Salus Alpha Directional Markets was 2.34% better than the performance of HFRX Systematic Diversified Index.

The Salus Alpha Multi Style had a performance of +3.92% for the month to date, outperforming the S&P 500 Index by 6.07%. The fund's performance was 4.05% above the performance of HFRX Global Index for the period.

The Salus Alpha Equity Hedged had a performance of 0.76% for the month to date, outperforming the S&P 500 Index by +2.91%. The 12 month rolling alpha of Salus Alpha Equity Hedged to the S&P500 is 8% p.a., the 12 month rolling beta is currently -0.2. The Salus Alpha Equity Hedged currently has a 40% exposure to Long Bias, 23% to Market Neutral, 7% to Long Short Variable Bias,  and 30% to Short Bias.

The Salus Alpha Event Driven had a performance of +0.74% for the month to date, outperforming the S&P 500 Index by 2.89%. The 12 month rolling alpha of Salus Alpha Event Driven to the S&P500 is 4% p.a., the 12 month rolling beta is currently -0.1. This implies that in the past 12 months, the fund had a return of 4% due to active management (alpha). The fund's performance for the period was 1.26% higher than the performance of the HFRX Event Driven Index.

The Salus Alpha RN Special Situations had a performance of +0.09% for the month to date, outperforming the S&P 500 Index by 2.24%. The fund's performance for the period was 0.61% higher than the performance of the HFRX Event Driven Index.

The Salus Alpha Real Estate had a performance of -0.02% for the month to date, outperforming the EPRA / NAREIT Index by +1.97%. Salus Alpha Real Estate is a single manager single strategy fund, which invests according to Salus Alpha’s proprietary Global Real Estate Model. The Salus Alpha Real Estate outperformed the EPRA/NAREIT Real Estate Index by 1.97% during the month of July. The current volatility in the Real Estate markets is above the model’s risk threshold. The fund therefore has no allocation to equities and is invested exclusively in risk neutral assets.

The Salus Alpha Commodity Arbitrage had a performance of +8.71% for the year to date until 7/29/2011, outperforming the S&P 500 Index by 5.96%. The fund outperformed the S&P GSCI Index by 0.12%, which booked a gain of 8.59% in the reporting period. The 12 month rolling alpha of Salus Alpha Commodity Arbitrage to the S&P500 is 8% p.a., the 12 month rolling beta is currently 0.0. This implies that in the past 12 months, the Salus Alpha Commodity Arbitrage had a return of approximately 8% due to active management (alpha), and 0.01% return due to the positive market beta. The performance of Salus Alpha Commodity Arbitrage was 12.70% better than the performance of HFRX Systematic Diversified Index.

Salus Alpha Commodity Arbitrage tracks the CAX - Commodity Arbitrage Index. The CAX Index covers the performance of arbitrage strategies, which aim to extract consistent market neutral returns from valuation inefficiencies arising among related commodities - like for example Brent Crude vs. WTI Light Sweet Crude - or among different maturities of futures contracts on one commodity due to Contango, Backwardation and Seasonality.

The SA FX Strategies had a performance of -0.67% for the month to date, outperforming the S&P 500 Index by +1.48%. The FX Managers in the SA FX Strategies Portfolio profited by the USD's weakness vs. Russian Rouble, Norwegian Krone, Canadian Dollar, Australian Dollar, Swedish Krone, British Pound, Swiss Franc, Singapore Dollar, Mexican Peso, Polish Zloty and Brazilian Real. The managers incurred losses due to the Dollar's strength vs. New Zealand Dollar, and due to the USD devaluation vs. Euro, Japanese Yen and Danish Krone.

NEWS - 9

Hedge Funds Review – Video: interview with Günther Schneider, hedge fund specialist, Salus Alpha

Salus Alpha, with $1.1 billion under management, believes investors want regulated products and has been offering its hedge funds and funds of hedge funds as onshore products since 2001.

From inception Salus Alpha was keen to offer investors transparency and liquidity, according to Günther Schneider, head of global business development and a hedge fund specialist at Salus Alpha Financial Service (Europe). He is proud of the fact that Salus Alpha, now with over $1.1 billion of assets under management in a variety of vehicles, was one of the first managers to offer daily liquid Ucits funds in all its hedge fund strategies.

“Ucits has become such a strong story recently,” said Schneider, but he believes investors need to approach alternative products by looking at the strategy as well as the asset managers’ capabilities to deliver performance. “Sometimes people talk too much about the vehicle and do not concentrate on the asset strategy under management,” he noted.

When asked if daily liquidity is more of a marketing ploy, Schneider is adamant that liquidity is “becoming more important” for investors. “If you look at markets and market conditions, people like the idea of having liquid portfolios. We’ve been offering daily liquid alternative investments since 2003 so we’ve been used to structuring products like that and offering it to investors. Yes, they like it. As soon as they see it is possible, they take advantage of [daily liquidity],” he stated.

In a wide-ranging interview, Schneider explained how he could offer an event driven strategy in a Ucits format as well as offering advice to other managers on the benefits of having an extensive network of offices close to investors. He said it was important to have a “presence on the ground”, particularly in the Asian markets. Salus Alpha has offices in Singapore and Hong Kong.

On the question of regulation, Schneider admitted new laws will “have an impact on all asset managers but hedge funds/alternative managers are more in the focus [as far as regulators are concerned] than others”. This, he said, was a good thing as he believes some of the issues being pushed by regulators, like transparency and liquidity, will be good for investors and the market in general. He advocated co-operation with lawmakers and active engagement, rather than sitting on the sidelines as politicians draw up new rules.

Schneider also talked about the attractions of managed futures for investors. He thinks investors will become more discriminating of which CTA/managed future fund managers they choose in future as those who do well in less favourable markets continue to offer strong performance compared with others.