Brevan Howard has finally experienced some positive returns in the struggling Emerging Markets Master Fund, which was up 2.3% last month, bringing year to date loss down to 12.7% for the year. The returns are from a monthly shareholder report seen by ValueWalk.

Brevan Howard posts gain in EM strategy

The $2.5 billion EM master fund has been on the losing end since May and had been unable to rope in profits from EMs as they suffered growing outflows against the backdrop of possible QE taper. Just as the Fed took QE off the table, EMs were back up once again and it would appear they gave some relief to Brevan Howard’s strategy. Brevan Howard Investment Fund – Emerging Markets Local Fixed Income Fund, was also up 1.3% in last month, cutting its YTD loss to -2.68%. The fund manages $1.13 billion.

The Brevan Howard Master Fund, which manages the bulk of the total assets, did not have a good showing in September; return was up only +0.03%, putting the YTD gain at 1.4%. If the master fund, which applies a global macro strategy, continues to churn out such low numbers in the fourth quarter as well, it might just break the record of lowest return of +1.01% return managed in 2010.

Commodities fund records major loss

One of Brevan Howard’s best strategies has been the Brevan Howard Asia Master Fund which managed a +0.38% gain in the last month, which put the total gain for the three quarters at +10.28%. The Brevan Howard Credit Catalysts Master Fund was also up 1.3% in September, with gains coming across all securities and more than half of the returns coming from MBS/ABS strategies. The $4.1 billion fund is now up 8.3% for the year.

The London-based hedge fund, which launched its first fund from New York this month, had the worst luck in its commodities fund. Returns were down 4.2% in Brevan Howard Commodities Strategies Master Fund, which puts the performance for the year in the negative zone with a loss of 1.2% so far. The fund lost mainly in energy and platinum group metals.

Brevan Howard calls Fed’s decision not to taper off QE as ‘prescient’ since it would have worsened the shutdown and debt ceiling debate that proceeded it. The fund notes that economic data was mixed in September, where jobs data missed expectations while manufacturing and non-manufacturing activity saw acceleration. For more commentary from Brevan Howard’s monthly letter, read the full letter below.

Brevan Howard Global – September Newsletter.pdf