New fund will target absolute returns, low volatility

F&C has launched a new pooled investment fund which will target returns of 2-4% per annum over short term money market rates (net of all costs) and with low volatility.

F&C believes the Fund will be attractive to investors seeking alternatives to traditional and volatile asset classes, such as equity and bonds, which have exhibited increased levels of correlation to each other in recent years. F&C Active Return Fund will be co-managed by Stephen Crewe and Chris Childs of F&C Alternative Investments. The Fund will utilise some of the derivative investment strategies successfully employed on existing products managed by the team, including a hedge fund, and will be supported by a sophisticated independent risk system.

Unlike a hedge fund, the F&C Active Return Fund will have daily single pricing, a simple fee structure and daily liquidity through a Luxembourg domiciled UCITS III SICAV fund structure. The Fund, which has both Sterling and Euro share classes, will therefore provide access to a set of alternative investment strategies to a wider universe of potential investors including discretionary portfolio managers, multi-managers and institutional investors.

The Fund will invest in a portfolio of derivatives focused on developed market equities, predominantly in Europe and the US, with a bias to larger cap indices where liquidity is greatest, even in times of market stress. The team, who have worked together managing derivative investment strategies for 13-years, will blend a robust quantitative framework with a qualitative appraisal of markets. The underlying philosophy of the Fund will be to target sources of risk premium that have empirically been proven to exist and are believed likely to persist in the future.

10 October 2008 © Moneyextra.com

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