TIDMREC
RNS Number : 6903L
Record PLC
21 July 2017
RECORD PLC
FIRST QUARTER TRADING UPDATE
Record plc ("Record" or "the Company"), the specialist currency
manager, announces today that the Group's assets under management
equivalents ("AUME") as at 30(th) June 2017 totalled $59.9 billion
(31(st) March 2017: $58.2 billion).
AUME expressed in sterling as at 30(th) June 2017 totalled
GBP46.1 billion (31(st) March 2017: GBP46.6 billion).
1. AUME composition
AUME expressed in US dollars increased by 2.9% between 31(st)
March 2017 and 30(th) June 2017 and decreased by 1.0% when
expressed in sterling. The composition of AUME by product was as
follows:
AUME $ billion
------------------------------------------------------------
30(th) June 2017 31(st) March 2017
--------------------- ----------------- ------------------
Dynamic Hedging 5.0 6.3
Passive Hedging 50.3 48.2
Currency for Return 1.6 1.0
Multi-Product 2.8 2.5
--------------------- ----------------- ------------------
Cash & Futures 0.2 0.2
--------------------- ----------------- ------------------
Total 59.9 58.2
--------------------- ----------------- ------------------
2. AUME Movement
Net client AUME flows in the three months to 30(th) June 2017 by
product were as follows:
Net client AUME flows - $ billion
---------------------------------------------------------------
3 months to 30(th) 3 months to 31(st)
June 2017 March 2017
--------------------- ------------------- -------------------
Dynamic Hedging (1.1) 0.1
Passive Hedging 0.2 0.3
Currency for Return 0.6 -
Multi-Product 0.3 (0.9)
--------------------- ------------------- -------------------
Cash & Futures - -
--------------------- ------------------- -------------------
Total - (0.5)
--------------------- ------------------- -------------------
Record had 58 clients at 30(th) June 2017 (31(st) March 2017: 59
clients).
Other than client flows, the factors which have had an aggregate
impact on AUME during the quarter of +$1.7 billion, were as
follows:
(i) Movements in global stock and other markets: -$0.7bn
Substantially all the Passive and Dynamic Hedging, and some of
the Multi-Product mandates, are linked to stock and other market
levels. Consequently AUME may be affected by movements in these
markets.
(ii) Exchange rate movements: +$2.4bn
Exchange rate movements during the period affect the conversion
of non-US dollar mandate sizes into US dollar AUME.
3. Investment performance
For US Dynamic Hedging clients hedging returns in the programmes
were negative during the quarter, as the US dollar weakened against
the weighted basket of hedged currencies. Losses came primarily
from hedging the Japanese yen, euro, and sterling. The Dynamic
Hedging programmes performed as intended, and hedge ratios fell
through the period in line with US dollar weakness, allowing US
investors to keep currency gains in the underlying overseas
exposures.
For UK-based Dynamic Hedging clients the programmes also
performed as expected although generated mixed results in line with
the differences in hedgeable weights as sterling strengthened
versus the US dollar but weakened versus the euro. Hedging gains
came primarily from hedging the US dollar, while the euro losses
were contained as hedge ratios were reduced over the quarter in
response to sterling movements.
Investment performance of the FTSE Currency FRB10 index (excess
return in sterling) during the three months to 30(th) June 2017 was
-0.79% (three months to 31(st) March 2017: return of +0.27%). The
FTSE FRB10 Index Fund continued to track the index closely, on a
1.8x geared basis.
Record's Emerging Market product investment performance was
negative during the quarter and for an un-geared portfolio equated
to a quarterly return of -0.13% (three months to 31(st) March 2017:
return of +2.85%). Annualised performance since inception (30(th)
November 2009) for an un-geared portfolio was +2.13% p.a.
Investment performance in the Multi-Strategy product that
comprises the FTSE Currency FRB10, Emerging Market, Value and
Momentum strategies was negative during the quarter as positive
returns from Value strategy were more than offset by losses in the
FRB10, Emerging Markets and Momentum components. For an un-geared
portfolio, the return was -0.70% over the quarter (three months to
31(st) March 2017: return of +0.64%). Annualised performance since
inception (31(st) July 2012) for Record's longest-standing
Multi-Strategy mandate on an un-geared portfolio basis is +1.59%
p.a.
4. AVERAGE FEE RATES AND PERFORMANCE FEES
During the quarter to 30(th) June 2017, fee rates for all
products remained broadly unchanged from the previous quarter. No
performance fees were earned in the quarter.
5. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on business
development, said:
"It's pleasing to report continued growth in aggregate AUME in
the quarter and to note the diversity of inflows from existing
clients across both hedging and return-seeking products, sufficient
to offset the previously announced termination of a $1.2 billion
Passive Hedging mandate. During the quarter, a Dynamic Hedging
client on a management plus performance fee basis notified its
intention to switch to Passive Hedging, at fees consistent with
Record's standard management fee scales.
"Record's Multi-Strategy product reached the fifth anniversary
of its live track record this month and saw inflows of $0.6 billion
from existing clients during the quarter.
"Uncertainty continues to have an impact on currency markets,
with no evident end to the current political instability in the UK
and the US, and heightened geopolitical uncertainty arising from
the Middle East and South East Asia.
"We continue to engage with both existing and prospective
clients as to their preferences in managing currency risk and
opportunity, and in achieving their investment objectives. With our
diversified product suite and our ability to tailor solutions to
fit individual client objectives, we are confident that further
progress can be made in the current financial year."
Record will announce its second quarter trading update on 20(th)
October 2017.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
James Wood-Collins, Chief Executive Officer
Steve Cullen, Chief Finance Officer
MHP Tel: +44 (0) 20 3128 8100
Nick Denton record@mhpc.com
Ollie Hoare
Notes to Editors
Record plc
Record is a specialist currency manager and provider of currency
hedging services for institutional clients. Founded in 1983, Record
has established a market leading position as a currency manager.
Specifically, the Group has a leading position in managing Currency
Hedging and Currency for Return for institutional clients.
The Group has four principal reporting lines:
- Dynamic Hedging, where Record seeks to eliminate the impact of
currency movements on elements of clients' investment portfolios
that are denominated in foreign currencies when these movements are
expected to result in an economic loss to the client, but not to do
so when they are expected to result in an economic gain;
- Passive Hedging, where Record seeks to eliminate fully or
partially the economic impact of currency movements on elements of
clients' investment portfolios that are denominated in foreign
currencies;
- Currency for Return, in which Record enters into currency
contracts for clients with the objective of generating positive
returns; and
- Multi-Product, where the client mandate includes combined
hedging and return-seeking objectives.
Record (LSE: REC) was admitted to trading on the London Stock
Exchange on 3(rd) December 2007.
This announcement includes information with respect to Record's
financial condition, its results of operations and business,
strategy, plans and objectives. All statements in this document,
other than statements of historical fact, including words such as
"anticipates", "expects", "intends", "plans", "believes", "seeks",
"estimates", "may", "will", "continue", "project" and similar
expressions, are forward-looking statements.
These forward-looking statements are not guarantees of the
Company's future performance and are subject to risks,
uncertainties and assumptions that could cause the actual future
results, performance or achievements of the Company to differ
materially from those expressed in or implied by such
forward-looking statements.
The forward-looking statements contained in this document are
based on numerous assumptions regarding Record's present and future
business and strategy and speak only as at the date of this
announcement.
The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained in this announcement whether as a result of
new information, future events or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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