Private market exchange ADDX has listed Asia Genesis, an Asia-focused, global macro hedge fund. According to ADDX, the fund seeks to achieve investors’ twin goals of capital preservation and positive annual compounding.
The fund’s net return as at Dec 30, 2022, was 15.3% on a Sharpe Ratio of 1.2. The fund looks to bring “consistent, positive and uncorrelated returns with low downside volatility, across bull, bear and range markets” and engaging in “discretionary, nimble tactical trading”.
Between 60% and 70% of the fund’s trading is in the stock indices of Japan, Hong Kong, China, India, and the US. The remaining exposures are in interest rates and major currencies.
“The fund trades exclusively in highly liquid exchange-listed futures and options. This allows the open-end fund to offer investors a monthly redemption option, with no lock-in periods. Using blockchain and smart contract technology, ADDX was able to reduce the minimum subscription size from US$1 million to US$20,000 for its investors,” says the private market exchange in its Jan 30 statement.
Asia Genesis was launched in May 2020 by Chua Soon Hock, the founder and chief investment officer (CIO) of Asia Genesis Asset Management, who returned after his break in 2009.
Chua, which comes with 39 years of experience in trading and fund management, was the CIO and fund manager behind Japan Macro Fund (JMF). JMF is a BarclayHedge-rated, top-performing hedge fund that saw annualised net returns of 18.7% between 2000 and 2009, which is during the period under Chua's management.
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In 2009, JMF was one of Singapore’s largest macro hedge funds with about US$800 million ($1.05 billion) in assets under management (AUM).
In his career, Chua’s roles included being the chief strategist and head of interest rates and arbitrage trading at Sanwa Bank Singapore, as well as being the managing director at Koch Capital Asia.
“Chua Soon Hock is a household name among Asian hedge fund managers. His track record speaks for itself: throughout a ten-year period ending 2009, his JMF – which, despite its name, had a broader Asian focus – was a top-ranked hedge fund which maintained consistent absolute returns with low downside volatility,” says ADDX’s CEO Choo Oi-Yee.
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“Not surprisingly, investors who were pleased with their JMF returns are now excited that he has returned to trading and fund management, with a strategy similar to that of JMF. ADDX is the only digital exchange giving investors access to Asia Genesis,” she adds.
Choo continues: “As investors continue to face uncertainty in the financial markets, the value proposition of hedge funds has become more compelling. ‘All weather’ funds like Asia Genesis have a strategy designed to bring in uncorrelated returns across market cycles. Amid a broader reallocation towards alternatives by both institutions and mass affluent investors, technology is likely to be an important driver of growth for the hedge fund asset class in the coming years because it reduces the barriers to entry for investors.”
Of his comeback, Chua says, “Up until 2020, I noticed many of my close relatives and friends being adversely affected by risky financial products in a leveraged environment. I felt that I could use my expertise to help them do better, and offer a transparent, safer alternative with lower downside volatility and steady returns.”
He adds: “While many traders find the ideal risk-reward ratio for their trades to be approximately 3:1, we look at risk-reward ratio differently from our peers. We want to make money consistently, with less risk taken for every dollar of return earned. Our risk-reward ratio can be 1:1, and we seek to achieve a higher probability of winning for each trade by identifying good risk-reward trades. We put in many smaller-sized good risk-reward trades with strict risk controls while keeping our position size small; this way, we let the probability of good risk-reward over a large population of total trades work in our favour over time.”
Looking ahead, Chua sees that the next decade, from 2020 to 2030, will be “unlike any of the past four decades from 1980 to 2020, when the bull markets were sustained and prolonged”.
“We have likely entered a multi-year range market decade with more frequent bear phases. We are experiencing the effects of fundamental changes in the macroeconomic environment, and these are unprecedented times when compared to the past 40 years,” he says.
“This new era is marked by rising uncertainty, geopolitical tensions, supply chain challenges, trade war, military build-up, as well as the cumulative effects of huge money supply trends leading to rising inflationary pressures and interest rates… I hope to achieve the best risk-adjusted returns among global macro funds, just as I had done with my previous fund, the JMF,” he adds. “My understanding of market psychology and inflexion points in times of high uncertainty and more frequent flip-flopping between bull and bear phases should give us a strong edge.”