Bermuda Investment Advisory Services Limited (BIAS) reported today that the asset allocation funds BIAS Global Portfolios SPC, for which BIAS provides investment management services, had grown $26 million to $84 million during the third quarter of 2009.

All three of its funds — the low-risk Short Duration Income Fund (up 1.1 percent), the moderate-risk Global Balanced Fund (8.6 percent) and the Global Equities Fund (14.3 percent) — achieved positive returns in the third quarter. The three funds are also up through the first nine months of the year — 2.8 percent, 14.5 percent and 23.1 percent respectively.

The Cayman-domiciled funds were launched at the end of 2006.

Chief investment officer Robert Pires explained that some of the growth was attributed to excellent market performance in the last quarter and excellent geographic, sector and stock selection by the BIAS portfolio management team.

Mr. Pires expects the funds, which are currently listed on the Cayman Islands Stock Exchange, to be listed on the Bermuda Stock Exchange by the year end.

The Short Duration Income Fund benefited from a narrowing of corporate spreads over Treasuries. As the Federal Reserve kept its benchmark rate close to zero and committed to keeping it low for the foreseeable future to stimulate the economic recovery, the shortest end of the yield curve was relatively steep.

Mr. Pires said: "This gave us the opportunity to 'ride the yield curve' and buy three-year Treasuries for a yield pick-up in the low interest rate environment."

On average, 50 percent of the fund is held in US Treasuries for added stability and liquidity.

The Equities Fund's overweight positions in the commodity-based 'ABC' countries (Australia, Brazil, and Canada) were key performance factors as energy and base metal prices rose on the back of increased investor risk appetite and strong demand from China.

As a result, these markets enjoyed not only a rally in stock prices, but a surge in their currencies against the US dollar. An overweight position in "emerging Asia" (which includes China) also boosted performance, BIAS said.

Given the dramatic rally in global stock prices since March, the portfolio management team currently favours high-dividend paying stocks which offer downside protection while providing a steady stream of income.

The Balanced Fund benefited from the combined effect of the strategies explained above. Performance was also boosted by successful foreign currency investments.

In July the team decided to lock in its profits on Australian dollar bonds after realising an 18 percent gain.

The Australian dollar has continued to climb against the greenback since then, but Mr. Pires has no regrets, saying: "You can never go wrong taking a profit."

He attributed some of the growth in funds in the size of funds attributed to clients being drawn to the lower cost structure of the funds as opposed to individually managed segregated portfolios.

"Transaction costs are far less for a $20 million-$40 million fund than it is for a portfolio of less than a million dollars," he said.

BIAS Global Portfolios SPC's funds require a minimum investment of $25,000. Clients under a million dollars are encouraged to participate in the BIAS Wealthbuilder Programme by adding a minimum of $1,000 per month to their holding.

Redemptions and subscriptions are executed every Friday.

For more information contact Mike Gill on 298-5661 or e-mail mgill@bias.bm, or see the BIAS website, www.biasglobalportfolios.com.