fund FAQs

GAA GBP Global 'Q' Fund Frequently Asked Questions

  1. How would you describe the GAA GBP Global ‘Q’ Fund (“the ‘Q’ Fund”)?
  2. The ‘Q’ Fund is a Fund that each month seeks to forecast the following month’s top performing stocks from across 52 stock markets worldwide. To do this, it utilises a 30 day, forward looking, proprietary ‘quant’ mathematical model which relies on the structured processing and interpretation of universal stock data and forecasting on more than 38,000 different individual stocks. 

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  3. When was it launched?
  4. The Fund was launched on the 3rd of May 2004.

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  5. How does it differ to other global stock market models?
  6. On a continuous basis, 25 different variables are analysed and weightings allocated with regards to each stock by the ‘quant’ model to determine which stocks are most likely to perform in the following month, and in the following month only. The model has no preference for country, sector, region or industry. In so doing, the stock selection model eliminates human emotional bias as to which stocks should be picked.

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  7. Which markets are considered?
  8. Equities listed on ALL tradable markets are screened by our system on a monthly basis to determine whether they should be included in the underlying stock portfolio.

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  9. How often is the underlying stock portfolio reweighted?
  10. ONCE a month, EVERY month. There is NO correlation between one month’s portfolio and the next.

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  11. What currency is the Fund denominated in?

    The Fund is denominated in US Dollars. However, there is also a GBP version of the Fund for those who wishe to invest in GBP. To prevent currency fluctuations from affecting the GBP Fund’s performance, each non US Dollar denominated stock is hedged when appropriate to prevent currency fluctuations impacting on the performance of such stocks when valued in US Dollars. This allows investors to benefit directly from th e visible gain of a stock’s price whilst limiting the uncertainty of currency movements.


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  13. Do you short the stock market?
  14. The Fund does not short individual stocks. Instead, an ‘insurance policy’ is purchased each month which pays out in the event that any of the individual stock index components of the MSCI World Index fall in a given month, and in so doing offering the Fund an element of protection against unexpected stock market fluctuations.

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  15. How do you know how much to short the components of the MSCI World Index?
  16. The investment advisor has developed a proprietary signal generator. The following indicates the level of hedging employed by the Fund based on the signal generated as follows:

    Signal indicates MSCI upward trend : 50% hedge (minimum level employed at all times)
    Signal indicates MSCI to remain flat : 100% hedge
    Signal indicates MSCI variable trend : 100% hedge
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  17. How has the ‘Q’ Fund performed?
    YEAR FTSE 100 ‘Q’
    2002 -24.28% -13.45%
    2003 +13.62% +6.69%
    2004 +7.54% +6.55%
    2005 +16.25% +20.54%
    2006 +11.15% -2.76%
    2007 +3.80% +23.72%
    2008 -31.33% +27.68%
    2009 +17.06% -9.27%
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  19. What are the ‘Q’ Fund’s charges?
    • There is no front end load, establishment fee or bid/offer spread. Investments are made at next NAV.
    • In the event of a redemption, the Fund levies a penalty of 6% in the first year, reducing by 1.2% per year, to zero after year 5.
    • A management fee of 1.75% per annum is levied and incorporated within the monthly fund price.
    • A performance fee of 10% on net new highs with losses carried forward is also charged and incorporated within the monthly fund price.

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  21. Are there any limitations on the types of stocks purchased?
  22. Typically stocks purchased are capitalised at at least US$ 100 million per counter.

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  23. Will you tell me the stock selection in advance?
  24. No.  For investors to benefit from our ‘quant’ stock selection methodology, they will need to invest in it. Previous months’ stock list will be made available from time to time.

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  25. Are there any other mechanisms built in to protect the investor?

    As part of our portfolio strategy, no single stock will constitute more than 5% of the portfolio NAV while no country allocation will exceed 30% of total allocation, other than the US and Japan, which may make up to 50% of allocation. 


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  27. Does the Fund carry any minimum guaranteed return?

    No. However, what it does offer the investor is a truly diversified and hedged portfolio of the most likely stocks to perform worldwide each month with holdings made in up to 52 global stock exchanges. To date the Fund has actually purchased stocks from 40 of the 52 markets it considers and is typically invested in 150 stocks from at total of 25 – 30 countries each month.


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  29. How can any Portfolio Manager REALLY make a stock selection decision without analyzing ALL the relevant data available?

    GAA believes that in order to pick a given stock for its Global GBP ‘Q’ Fund (the “Fund”), two things must first be in place:

    A structured, repeatable process for analyzing the fundamentals of ANY stock under consideration which will result in a clear signal as to whether the stock should be purchased or not; and

    The ability to analyse data on ALL stocks which could be considered for purchase.

    In the case of this Fund, a system was developed over a 7 year period which is capable of analyzing ALL the data available on mid to large cap stocks from across 52 global markets.  In this regard, the integrity of the system can be demonstrated in as much as the same variables are applied to ALL stocks considered, thus removing human bias and emotion, whilst ensuring that stock purchase decisions are not made on just SOME of the information available.  The system itself depends on significant computing power to analyse large volumes of data on a daily basis – complete data which is provided by stock data feeds with real time information from all over the world.


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  31. How often should a portfolio be rebalanced?
  32. Applying a structured process to the analysis of stock data removes the subjective view point adopted by many fund managers.  GAA’s stock selection system is built around a short term forecasting model which looks forward 30 DAYS only.  In other words, the sole aim of our stock selection model is to attempt to forecast those stocks which are most likely to perform next month, and next month alone.  The model is run continuously on a daily basis which culminates in the Fund’s stock portfolio being rebalanced EACH & EVERY MONTH without fail. No stock is ever held or carried forward to the following month unless it is actually reselected by the stock selection model during the previous month. Typically, of the more than 38,000 stocks which could be considered for purchase each month across 52 global markets, just 120 - 150 stocks are selected and purchased.  These stocks are the stocks that the model identifies as having the best chance of performing the following month based purely on fundamentals, irrespective of whether markets subsequently rise or fall.

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  33. Don’t most investors want real, ‘hands on’ discretionary management of their investments?
  34. The truth is that many investors, if looking for global stock investment, would love their portfolios to benefit from discretionary management, but in reality are unable to get it.  The reasons for this are many and varied and include:

    Size of portfolio is too small. 

    Problem : How many markets can be considered with a portfolio, say, of GBP25,000?

    Solution: Not many! GAA’s Fund analyses data from 52 markets around the clock whilst allowing investors of ALL sizes to participate and invest.

    Cost of real time, hands on portfolio management. 

    Problem: Even for larger investors, how much would it cost to gain access to real time stock information on 52 markets? Which advisor actually has this information at his finger tips?  Even if a stock broker is considered on a global scale, how can you be sure he is really considering ALL the information available in order to make his stock selection decisions? 

    Solution: Due to the size of funds under management, the GAA’s stock selection process can afford to subscribe to data feeds which capture ALL relevant data on more than 38,000 stocks in order to determine which stocks should be purchased each month irrespective of market, market sector, region or industry.

    Lacking worldwide ‘on the ground’ representation by an advisory organization or brokerage.

    Problem: How many brokers have either i) market knowledge of lesser known markets - Finland, Mexico, Greece and Belgium, for example, have all figured in the GAA Global ‘Q’ Fund since inception - or ii) the ability to execute trades in these markets?

    Solution: GAA’s Fund has both the knowledge and the global representation through international banks to purchase and dispose of stocks in ANY market at fully institutionally discounted rates.

    By investing in this Fund, investors receive the same attention to detail and access to international markets irrespective of whether they are large or small which results in the closest thing to discretionary management the investor could get WITHOUT hiring his own ‘quant’ management and execution team. GAA’s ‘quant’ system NEVER sleeps and continues to analyse stock data EVERY day of EVERY week of EVERY month for and on behalf of its investors.

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  35. What about falling markets? How many global equities funds take into account that markets DO fall from time to time?
  36. The GAA GBP Global ‘Q’ Fund has been built with two investment aims in mind:

    To identify and purchase stocks which are likely to perform next month irrespective of market movements; and

    To minimise portfolio losses in the event of market downturns

    To achieve a level of protection against market downturns, the Fund purchases an ‘insurance policy’ each month.  Broadly speaking, the Fund buys contracts each month which make money if markets fall. Each month the Fund buys approximately 120 - 150 stocks in anticipation of them rising the following month, and sells the underlying component indices of the MSCI World Index. If the component indices of the MSCI World Index fall, the Fund receives a payout.

    Very few other global equity funds employ such an insurance policy.  GAA believes that the reduction of volatility and risk wherever possible is as important as choosing performing stocks each month.

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