fund objective fund objective fund guidelines fund guidelines fund bandwidths fund bandwidths asset...

Global Opportunities Fund

Fund Managers:

Guergana Anguelova &

Moritz Broelz

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Agenda

Fund ObjectiveFund GuidelinesFund BandwidthsAsset Allocation RationaleCurrent Asset AllocationCurrent HoldingsMarkowitz Portfolio OptimizationBenchmarksFund PerformanceQ&A

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Fund Objective

• Global Opportunities Fund, Inc. (“the Fund”) is a non-diversified, closed-end management investment company.

• The Fund’s investment objective is long-term capital appreciation and income generation, which it seeks to achieve by investing in equity, debt and derivative securities of all types from issuers around the world.

• The fund consists of three security portfolios - equity, debt and derivative, with equal capital base.

• The Fund allocates and reallocates capital based upon management selection, and is not limited to specific industries or sectors.

• The Fund aims to limit downside risk potential by investing in strategic derivative positions.

• The Fund will invest near all, but no less than 90% of its total available capital.

• There is no guarantee that the Fund will meet its objectives.

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Fund Guidelines• General Fund Guidelines

– Allocations subject to management selection

• Equity Portfolio Guidelines– Focus on capital gains– Flexible time horizons

• Bond Portfolio Guidelines– Long Term Income Generation– Long Term Capital Preservation

• Derivative Portfolio Guidelines– Hedge Currency Exposures– Limit Equity Downside Risk– Generate Steady Income– Speculation

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Fund Bandwidths• General Fund– No more than 10% cash holdings

• Equity Portfolio– No more than 10% in a single title issue– No more than 40% in a single fund title

• Bond Portfolio– No more than 80% European debt– No more than 80% U.S. debt

• Derivative Portfolio– No limitations

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Asset Allocation RationaleFED ↑ Balance Sheet through Q.E. 2 (…)

U.S. Treasuries ↑ FED Reserves ↑ U.S. Monetary Base ↑

U.S. Dollar ↓U.S. Financials ↑ U.S. Equity ↑ (LT) Cashflows to Emerging Markets ↑ (Yields)

U.S. Primary Government

Dealers Earnings ↑

Buys U.S. Treasuries & MBS

Hedge Currency Exposure

Long U.S. Financials, particularly Primary Dealers

Long U.S. Blue Chips

Long Emerging Markets

Long U.S. Treasuries

Positioning

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Current Asset Allocations

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Current Holdings

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Markowitz Portfolio OptimizationReturn & Standard deviation for 2010

Data for current portfolio

Data for optimized portfolio

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Markowitz Portfolio OptimizationAllocation of Original Portfolio Allocation of Optimized Portfolio

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Original vs. Optimized Equity Portfolio Performance

Performance of Original Portfolio Performance of Optimized Portfolio

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Benchmarks

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Benchmarks

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Equity Portfolio Performance vs. MSCI World Country Index

Fund Performance (excl. Bonds)Large Spreads @ Close+ Spread Positions= exaggerates volatility

EUR/USD Performance has large impact on Fund Performance!

QE2 starts kicking in: Equity up, USD down, (UST’s up)European sovereign debt worries weaken Euro - halts U.S. Equity advance (in $ terms) – Equity Portfolio appreciates solely due to EUR/USD impact

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Fund Performance

• Derivative Positions maximize returns towards Expiration• Bond Positions held to maturity

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Questions & Answers

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Appendix 1• Fund Spreadsheets Link