Tactical investment strategy yields top gains for investors
Barry Hirowatari of Aventine Management Group is lead portfolio manager of the BTH Tactical Growth Fund, one of the few tactical allocation funds available to investors in Canada.
Tactical Allocation Funds differ from standard investment vehicles in that the manager has discretion to tactically rotate the fund's holdings between stocks, bonds and other assets. This approach reflects the ideal that no single asset class will consistently outperform over an entire market cycle and gives investors the opportunity to avoid stocks during bear markets.
With 23 years in the investment management industry, Hirowatari is a seasoned professional with deep experience who has steered portfolios through all types of markets. During the financial crisis he saw growth-oriented investors suffer large losses because their funds were fully invested in stocks, even as prices fell sharply. It was then that he saw the opportunity to launch a fund that could be more flexible during times of stress.
Hirowatari refined the fund's investment system over a 12-year period. Primarily a trend-following, growth-focused equity fund, it seeks to invest in companies with strong earnings performance and price momentum. The fund's primary objective is to outperform the S&P500 and TSX indexes, with a secondary goal to provide positive returns in all but the most extreme market environments.
To meet this secondary goal, Hirowatari's fund has the ability to completely exit equities in favour of bonds, currencies or precious metals if equity prices begin to materially weaken. Hirowatari believes that a hard-wired sell discipline is integral to long-term success. "We're not trying to be predictive in nature,” says Hirowatari. "If the market trends lower for a period of time, we're going to sell.”
As of May 24, Hirowatari held the number one position in Globefund's North American Equity category with year-to-date performance of 24 per cent. Since November 2012, his fund has outperformed the TSX index by 30.3 per cent, placing him in the top 50 of over 15,000 funds listed in Canada.
For more information on Hirowatari and the BTH Tactical Growth Fund visit aventine.ca.