TIDMREC
RNS Number : 4411N
Record PLC
18 January 2019
RECORD PLC
THIRD 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 31(st) December 2018 totalled $57.8
billion (30(th) September 2018: $61.8 billion).
AUME expressed in sterling as at 31(st) December 2018 totalled
GBP45.4 billion (30(th) September 2018: GBP47.4 billion).
1. AUME composition
AUME expressed in US dollars decreased by 6.5% between 30(th)
September 2018 and 31(st) December 2018 and decreased by 4.2% when
expressed in sterling. The composition of AUME by product was as
follows:
AUME $ billion
31(st) December 30(th) September
2018 2018
---------------- -----------------
Dynamic Hedging 3.9 4.4
Passive Hedging 48.4 51.7
Currency for Return 2.4 2.4
Multi-Product 2.9 3.0
---------------- -----------------
Cash & Futures 0.2 0.3
---------------- -----------------
Total 57.8 61.8
---------------- -----------------
2. AUME Movement
Net client AUME flows in the three months to 31(st) December
2018 by product were as follows:
Net client AUME flows - $ billion
3 months to 31(st) 3 months to 30(th)
December 2018 September 2018
------------------- -------------------
Dynamic Hedging - -
Passive Hedging (1.3) (0.6)
Currency for Return 0.3 -
Multi-Product - -
------------------- -------------------
Cash & Futures (0.1) -
------------------- -------------------
Total (1.1) (0.6)
------------------- -------------------
Record had 65 clients at 31(st) December 2018 (30(th) September
2018: 66 clients). Of the $2.5 billion AUME in Passive Hedging
mandates previously notified as expected to terminate during the
quarter ended 31(st) December 2018, one commercial relationship
representing two clients and $1.7 billion of AUME remained at
31(st) December 2018, although this is expected to terminate
imminently.
Other than client flows, the factors which have had an aggregate
impact on AUME during the quarter of -$2.9 billion were as
follows:
(i) Movements in global stock and other markets: -$2.0bn
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 and mandate volatility targeting: -$0.9bn
Exchange rate movements during the period affect the conversion
of non-US dollar mandate sizes into US dollar AUME. In addition
certain Currency for Return mandates targeting a specific
volatility target may be scaled up or down.
3. Investment performance
For US Dynamic Hedging clients during the quarter, hedging
returns in the programmes were positive as the US dollar generally
strengthened against the weighted basket of hedged currencies.
Investment performance of the FTSE Currency FRB10 index (excess
return in sterling) during the three months to 31(st) December 2018
was -0.34% (three months to 30(th) September 2018 was -0.40%). The
FTSE FRB10 Index Fund continued to track the benchmark index
closely, on a 1.8x geared basis.
Record's Emerging Market product investment performance was
positive during the quarter and for an un-geared portfolio equated
to a quarterly return of 2.42% (three months to 30(th) September
2018: return of -1.24%). Annualised performance since inception
(30(th) November 2009) for an un-geared portfolio was +1.76%
p.a.
Investment performance in the Multi-Strategy product that
comprises the FTSE Currency FRB10, Emerging Market, Value and
Momentum strategies was positive during the quarter. For an
un-geared portfolio, the return was 0.77% over the quarter (three
months to 30(th) September 2018: return of -0.74%). Annualised
performance since inception (31(st) July 2012) for Record's
longest-standing Multi-Strategy mandate on an un-geared portfolio
basis is +0.99% p.a.
4. AVERAGE FEE RATES AND PERFORMANCE FEES
During the quarter to 31(st) December 2018, fee rates for most
products remained broadly unchanged from the previous quarter.
Record earned performance fees of GBP1.3 million during the
quarter, all of which related to performance over the six month
period ended 31(st) December 2018.
5. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on business
development, said:
"We continue to make progress in diversifying Record's business
and in enhancing our products and services to clients.
"Our ability to add value to client portfolios is demonstrated
by the performance fees earned in the period of GBP1.3 million.
Product enhancements include the seeding of the pro-ESG
Multi-Strategy portfolio, as well as the addition of the
Range-Trading strategy to client portfolios.
"We continue to see a range of new business opportunities across
products and client locations, balanced against competition and fee
pressure. With our diversified product suite and our ability to
offer tailored solutions, we aim to make further progress in the
rest of this financial year and the next."
Record will announce its fourth quarter trading update on 17(th)
April 2019.
For further information, please contact:
Record plc Tel: +44 (0) 1753
James Wood-Collins, Chief Executive Officer 852 222
Steve Cullen, Chief Finance Officer
MHP Tel: +44 (0) 20 3128
Nick Denton 8100
Ollie Hoare record@mhpc.com
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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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