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Five years on from its launch by a team of former JP Morgan prop traders, the emerging markets-focused macro manager is building momentum both in terms of performance and also in assets under management
WHARD Stewart, the London-based macro manager that specialises in emerging markets, celebrates its fifth anniversary later this year. Established in August 2012 by a team of former JP Morgan traders including Mike Stewart, chief investment officer, and Alexis Hombrecher, partner and portfolio manager, its WHARD Stewart Master Fund strategy notched up its largest annual return to date in 2016, gaining 9.31% for the year according to the EuroHedge database, having suffered just three down months over the 12-month period.
Positioned as a fixed-income macro strategy with an emerging markets focus, it employs the same investment strategy and models developed by the team over the course of some 15 years at JP Morgan. Taking monetary policy as its starting point, it applies the history and experience of developed market models to emerging market countries, with investment themes expressed mainly through fixed-income (on average 75% of the portfolio) and foreign exchange markets (25% on average).
"While most emerging market strategies use fundamental analysis as their calling card, and the majority of macro managers focus on major developed markets, what we do is use developed markets strategies in the emerging market space," says Stewart. "Our philosophy is that although emerging markets may be different from developed markets, they don't break mathematical law or economic rules."
Stewart, who has some 20 years' industry experience, was previously CIO and global head of proprietary trading for the emerging markets strategy at JP Morgan before founding WHARD Stewart. During his 17 years at the bank, he also established a new alternatives business within JP Morgan Asset Management, and prior to that he was joint global head of emerging markets, and responsible for building JP Morgan's EMEA emerging markets business. He also sat on JP Morgan's EMEA Investment Bank Management Committee. He began his career at Chemical Bank.
WHARD Stewart - which has grown from an initial $100 million to approximately $230 million in assets under management - is structured with five portfolio managers running books and managing their own positions on a bottom-up basis, with individual risk limits...