Naos Asset Management's Absoluite Return Fund remains largely invested in cash (77.8%) and outperformed the manager's Small Company Fund in December 2008. The Absolute Return Fund generated a positive return of 0.83% for the month while the Small Company Fund lost 1.32%. Over the whole year the difference is even more stark with the Absolute Return Fund losing 25.96% while the Small Companies Fund is down 63.28%.
The manager reports that small company stocks are being hit hard by illiquidity and the deleveraging process but believes that the companies held in the portfolio have sound medium term fundamentals and remain over-sold/under-valued.
The investment objective for both funds is to outperform the UBS Bank Bill Index over a rolling three year period regardless of market environment.
