Star USA vis a vis Star Global
Introduction The Star USA and the Star Global are two unique players in the financial sector. Their notable successes are in abeyance. Their quintessential business acumen is to be envied by other key players. Star USA federal Credit Union has just over 19,000 members and assets worth over $ 130 million.
The credit union was opened in 1936 and now has over 50 fulltime employees and a few part time employees. Star USA is a community credited union with national and international impact on the financial market. Star USA is credited for having brought online home banking, has created a system to check the members account by phone ( E-Alert) and has provided the members with an ATM access to their own account. Star Global Rates is a global macro fund, investing in government bonds and currencies. It is specifically tailored to meet the needs and wants of investors who have long-term ambition and who might also be looking for super-returns from exposure to a diversified portfolio of government bonds and currencies.
Star USA The star USA has been a leader in innovation and service provision since its inception in 1936. The federal credit union serves members from 5 branch locations. To be eligible as a member one has to be living or working within the community. The deposits are federally insured by NCUA, which insures member accounts up to $ 250,000 in federal and most state chartered credit unions in the USA. The electronic services of this federal credit union is to be admired, it allows members the following services: application to join, application for a loan, checking their account balances, sharing draft orders, new account creation, loan payments, seeing ones account history, account transfers and also payment of bills online. On January 16th 2013 star USA announced the addition of a new online banking service.
This new online banking service was baptized E-Alerts. The E- Alerts have now allowed: members to register so as to be alerted by use of email or via text messages about their various account activities which include checking balances and also it allows the checking of cleared checks and transactions such as the Automated Teller Machine services and also checks according to detailed amounts. The service was made accessible to online banking workers and provided with no charge. Although set up in 1936 the star USA federal credit union is considered a young financial institution. It recently opened up its gates to public membership in West Virginia, originally chartered for employees of Columbia Gas.
The organization’s goal was basically to establish a contemporary image that relates to; its original corporate headquarters and appeals to a youthful and emerging consumer market. This project consisted of a 5,000 square foot single-story two- tenant structure located in St. Albans, West Virginia. By December 20th 2004 the Star USA federal credit union had become the first credit union in the state to join CO-OP Network, the nation’s largest credit union ATM network. The agreement Provided Star USA members with surcharge-free access to 57 CO-OP Network ATMs in West Virginia and more than 19,000 ATMs nationwide ([email protected]) “As we continue to add credit union members, Star USA FCU provides a strong Foothold for further expansion in the area,” said CO-OP Network CEO Robert Rose. “In addition to CO-OP Network ATMs in all 50 states, we now have almost 1,800 credit union members nationwide.” ([email protected]) Star USA FCU, at that time was the fourth largest credit union in West Virginia — with $124 million. In assets –it could now offer its more than 15,000 members surcharge-free ATMAvailability nationwide, via their new relationship with CO-OP Network. Star Global The Star Global is a highly experienced opportunistic investor with a deep understanding of global markets.
The staff and management believe that protection of capital is overarching investment principle. The Star Global usually invests in a diverse group of undervalued companies that exhibit superior economic characteristics. It has a strong track record of providing positive absolute returns. To capture the opportunities in the world market, the fund invests in a diverse range of government bonds, primarily G13 countries, and/or currencies, with opportunistic exposure to emerging market trends. Exposures vary, but over time allocations are typically 50/50 in fixed income and currency. While adhering to a policy of diversification across approximately 10 medium-term investment themes the concentration of the portfolio is at the discretion of the manager and dependent upon his conviction and fundamental economic views.
G13 government bond and currency markets continue to be some of the most liquid markets in terms of trading volume and size, thus providing highly liquid portfolios. Ease of entry and exit of trade positions are also much more reliable, given the mature nature of these markets. This is evident as execution costs have remained low for the manager’s portfolios even in recent times of high volatility. Given the underlying securities in which the fund invests, namely interest rate forwards, cash bonds Or interest rate swaps, currency forwards, futures and options, it provides the highest transparency level. In their monthly reporting, the manager provides written commentary on current positioning, outlook and Performance.
GAM Star Global Rates is a global macro fund, investing in government bonds and currencies. By the use of investment suppleness obtainable by UCITS III procedures, the trust seeks to bring total returns in all marketplace situations through an entirely discretionary approach to investing. It is preferably suitable for stockholders with medium to longer-term investment surroundings, considering the uncorrelated returns, from exposure to a diversified portfolio of Government bond and currencies. (Absolute Return: GAM Star Global Rates) There are many interesting key facts about the manager: Experienced manager with established track record, Eclectic, pragmatic tactic merging a range of fundamental and technical methodologies, Delivers returns that are uncorrelated to traditional markets, highly liquid portfolios, committed to full transparency for investors, risk management embedded throughout the investment process. Risk is actively managed through every portfolio decision.
The manager reviews, on a live basis, the performance of the fund’s positions, and actively adjusts them based on market movements, changes in outlook and market events. . (Absolute Return: GAM Star Global Rates) He focuses on achieving the highest reward-to-risk ratio at the individual position level, market level and theme level. In particular, he seeks to remain different from the market consensus and to monitor the correlation between individual positions in the fund. He applies hard stop-losses on every trade, to protect the portfolio from downside risk. This process is supported by regular, independent risk monitoring through formal reviews of a range of statistics from the Risk Metrics system on each portfolio.
(Absolute Return: GAM Star Global Rates) In November 2012 during the hotly contested Presidential elections, the election had taken the center stage, but for investors, this was simply the first act in the long running drama towards a cross party agreement on the appropriate mix of fiscal policy ahead of the fiscal cliff.The financial markets disappointment over Obama’s victory was short-lived as an apparent softening in the fiscal rhetoric from Republicans and Democrats alike gave investors hope that up to USD 600 billion (more than 4% of GDP) of fiscal tightening might be reduced / postponed. The consensus view appears to be that a deal will ultimately be done, resulting in a more manageable 1-1.5% of tightening next year. The fund made money in both rates and currency during the month.
Bearish positions in the Australian bond market were the single-largest interest rate contributor to returns. Better-than-expected Australian and Chinese data led to investors scaling back their expectations of aggressive easing from the RBA. Our long Mexican peso position versus a basket of currencies was the single-largest contributor to currency returns. Long positions in the Russian ruble versus the Polish zloty, Canadian dollar, US dollar and euro also performed strongly. Risk was cut further during the month as a number of themes performed.
In terms of interest rate themes we fully closed all of our short Australian rates positions. We also added further to our long-dated steepening position in the US. On a more tactical basis, we took a small long position in long-dated Mexican bonds and 5-year South African swaps. Profits were taken on the South African position towards the end of the month.” (Manager’s commentary as at 30 Nov 2012) The Star Global has the scaffolding of a good plan for dealing with market capitalization risk. The securities of small-to-medium-sized companies (by market capitalization), or financial instruments related to such securities, may have a more limited market than the securities of larger companies.
Accordingly, it may be more difficult to effect sales of such securities at an advantageous time or price. In addition, securities of small-to-medium-sized companies may have greater price volatility as they are generally more vulnerable to adverse market factors such as unfavorable economic reports. Star Global has devised ways of dealing with market risk. Active risk management is an integral part of the investment process, and is incorporated into every stage of portfolio construction. Market risk or investment risk is simply a means to quantify differences in the performance of the portfolio against its underlying benchmark. This risk is primarily quantified by estimating the aggregate ex-ante (predicted) tracking error of the portfolio although the Investment Manager also considers additional common descriptive statistics, including ex-post (historic) tracking error, information ratio, alpha, beta as well as the more straightforward use of standard deviations (volatilities) and annualized returns.
