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Media
Coverage
Trading in Life Insurance
Policies
"We view it as an alternative investment. He says he hasn't
encountered a financial professional who doesn't think life
settlements are a good idea. But he expects the market
initially will be income mutual fund managers looking for
alternative high-yielding product."
Michael
Banwell, National Post
Monday June 11, 2007
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Announcement as appeared in
July 2007 edition of Investment Executive Newspaper
Banwell Financial Inc. Welcomes Gail Kennedy
Michael Banwell,
President of Banwell Financial Inc. is pleased to welcome Gail
Kennedy to the BFI team as an Investment Advisor.
Gail has over 35 years
of experience in the investment industry starting in the banking
sector where she was one of the first women to manage a trust
company in the mid-1970’s. Gail moved on to become involved in the
mutual fund and brokerage industry and is also a past President of
Multiple Retirement Services (M.R.S.).
Gail is the successful
author of two national best selling books: ‘You’re Worth It!
Investment Strategies for Women’ and ‘First Class’. A contributing
past editor to MoneySaver magazine, Gail has appeared on numerous
radio and television programs across Canada. The Niagara Falls
office number for Gail is 905-358-3208.
Working closely with
Gail will be Martha Schoemer.
Banwell Financial Inc.
is a mid-sized mutual fund dealer with it’s head office in North
York, Ontario. www.banwellfinancial.com
Integrity, Competence,
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World
Hedge Funds Summit-Canada 2004 Conference
Niagara Fallsview Casino Resort in
Niagara
Falls
Excerpts
from the
December 3rd 2004
Panel Discussion including
Michael Banwell
Hedged
portfolios target an absolute return, as opposed to a relative
return. Performance generally speaking in 2004 has been
disappointing.
How
does an advisor explain this to clients?
Firstly it is
important to distinguish between targeting an absolute return, and
targeting a relative rate of return.
Absolute return investing targets a positive return
irrespective of market conditions.
Absolute return investing does not guarantee the targeted
rate of return. Similar
to the traditional approach to investing, growth does not
necessarily happen in a straight line.
Certain market conditions favor certain styles of management.
The lack of volatility in 2004, and the narrow trading range
of markets, made it a difficult year to extract alpha (the return in
excess of a benchmark produced by a manager, or the added value).
It is also important
to examine the risk/return profile of the various hedged portfolios
we recommend. Generally
speaking, the well managed funds during 2004, and beyond have indeed
offered far less volatility than the broad markets, with reasonable
rates of return.
In many cases the
original reasons for holding hedged investments in our portfolios,
are just as valid today as they were in the past.
Hedged portfolios offer an added level of diversification
that improves the overall risk/return profile of an investment
account.
When do you make a
decision to remove a manager, or as one likes to say, “fire the
manager”?
We
think it is crucial to have a reasonable understanding as to the
expected risk/return characteristics of a hedged portfolio at the
outset. This allows us
to assign a manager a range of expected return on both the upside
and on the downside (volatility).
If
a manager falls outside of this expected range either on the up
side, or on the down side, what are the reasons for this?
If we become uncomfortable with the reasons for this, it
might be a good time to fire the manager.
However,
part of our ongoing due diligence is to observe the performance and
volatility relative to similar styles or strategies, and similar
funds, as an initial reference point.
Would
anyone care to offer any closing remarks?
We believe with the
plethora of new hedge fund products and managers available, if we
are not careful with what is recommended to clients, the hedge fund
industry will find itself in a similar situation as the traditional
investment industry finds itself in today.
Investors are
skeptical because of the numerous managers on the traditional side
of the industry whom we would refer to as “bull market heroes”.
These managers offered little in the way of downside
protection during the bear market, and consequently they deserve to
be fired.
The manufacturing side
and the distribution side need to continually be cognizant of Mr.
Buffett’s two rules of investing:
the first rule is not to lose money, and the second rule is
to not forget the first.
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Group
RRSP's gain momentum as Canadians wake up to shortage in retirement
funds
Financial Post
02/23/04
Regular communication and plan
promotion is almost as important as the plan
itself, says Michael Banwell, a partner at Banwell Financial in
Toronto.
His team, which administers Park Hyatt Toronto's plan, meets
regularly with
employees in the plan to develop their retirment goals.
"It can be the
greatest plan in the world and the most generously funded, but if
human
resources or management doesn't take it upon themselves to spread
the word
effectively, it just doesn't do much," Mr. Banwell says.
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The Investment Funds Institute of Canada (IFIC)
Hedge Fund Forum
Excerpts from the November 4th
2002 , presentation by Michael Banwell, CFP and principal
of Banwell Financial Inc., Toronto, Canada.
Most investors, and advisors are inundated with investment
choice. Diversification
is good, but not all diversification is effective, or constructive
diversification...
Hedge funds offer an added level of effective
diversification to traditional investments, or to the
traditional approach to investing.
The analogy is comparing hedge funds, to real estate, oil and
gas, and other alternative investment strategies that move
independently of the market. During
this second worst bear market in history, while equity markets have
been declining, on average, hedge funds like real estate have
appreciated (1).
We use hedge funds as a strategy to reduce overall market
volatility…
While hedge funds have a reputation for
being risky, they actually take their name from their investment
goal, which is to reduce and control risk.
To do this, they utilize investment strategies that ordinary
mutual funds are not able to employ.
Strategies like short selling (borrowing shares and selling
them in the hope of replacing them later at a lower price), leverage
and arbitrage.
Unfortunately, not all hedge funds hedge.
Derivatives, suffer from a similar image problem.
Institutions and money managers use derivatives as a means to
reduce and control risk. Derivatives
by themselves are not risky, but the irresponsible use of
derivatives or hedging strategies are.
Reduced net equity exposure adds downside
protection in falling markets…
Although individual hedging strategies can be complex in
nature, a prudently managed hedge fund has reduced exposure to the
direction and to the risk of the market.
One of the reasons for hedging is to have a portion of your
assets not dependent on the direction of the market to generate a
positive return.
Our company has not abandoned the traditional approach to
investing, but we strongly believe that adding a component of
prudently managed hedged portfolios is a complement and
enhancement to existing assets.
Northwest quadrant…
One of the information providers we use is
Van Hedge Fund Advisors International.
Van offers an excellent risk/return matrix illustrating the
benefits of adding hedge to a traditional portfolio (2).
Van illustrates that by adding hedge in increments of 10%,
the portfolio is continually pushed into the northwest quadrant.
The northwest quadrant represents reduced levels of risk,
with above average levels of return.
Portfolio optimization…
Modern Portfolio Theory suggests that by adding uncorrelated
assets to a portfolio, one optimizes the risk/return
characteristics. Adding
hedge allows us to optimize a portfolio far more than with
traditional assets only (3).
For investors who are of the belief that markets will
continue to languish, hedge funds offer an attractive alternative to
increasing exposure to the broader markets.
Hedge fund managers typically have both a bullish as well as
a bearish outlook. This
mixed outlook may be representative of a long/short portfolio.
A long/short strategy will hold a mix of undervalued long
positions, balanced with a mix of overvalued short positions.
The intent of this portfolio is to profit from both
increasing and decreasing share prices.
Alignment of investor and manager interests…
Most hedge fund managers have a significant portion of their
overall net worth invested in the fund(s) they manage.
This co-investment of manager and investor money is an
alignment of interests. Our
experience suggests that clients like knowing that their money is
being managed with the same care as the manager’s money.
Fund of funds…
Most of our recommendations involve the use of fund of funds.
We believe this is the safest route offering maximum exposure
and diversification to the different hedging strategies.
A fund of funds may have anywhere from 12 to 45 underlying
funds that use a mix of such strategies as long/short equity or
fixed income arbitrage. The
overall intent is to provide consistent stable returns.
To replicate a fund of funds on your own, would require in
excess of $20 million. For
an accredited investor to access this for $25,000 represents
tremendous value. This
does not even factor in the added level of due diligence or
transparency a fund of funds manager provides.
In conclusion, hedge funds require far more due diligence
before investing, and on an ongoing basis.
The additional strategies available to hedge fund managers
require a higher level of understanding and technical knowledge,
that is not necessarily needed for the traditional long only
approach.
Notes
1) Van Hedge Advisors International, go to Van
in the News, Recent Press Releases, News Archives, Hedge Funds Shine
Through Bear Market.
2) Van Hedge Advisors International, go to All
About Hedge Funds, Why You Should Invest in Hedge Funds, Effects in
a Traditional Portfolio.
3) Secrets of the Investment All-Stars, author
Kenneth A. Stern, Chapter 3, Harry Markowitz, founder and Nobel
prize winner of modern portfolio theory.
The Investment Funds Institute of Canada (IFIC)
is the industry association of the Canadian investment funds
industry. Together with
its affiliate, The Canadian Institute of Financial Planning, the
Institute’s vision is to provide the most innovative and effective
services that will support and enhance the investment fund industry
in its drive to provide the leading investment vehicles for
Canadians. www.ific.ca
Banwell Financial Inc. is an independent
investment dealer located in Toronto.
Banwell Financial specializes in the recommendation of
prudently managed hedge funds as a complement and enhancement to the
traditional approach to investing.
www.banwellfinancial.com
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