This month, in a continuation to align our selection to our customers’ request for fund managers more decorrelated to the markets, we have added the following strategies to our master list.
We have added 3x funds.
New Funds in the MasterList
Global Macro fund,
Alternative UCITs fund diversified multi-asset strategy (stocks, bonds, cash, real estate, currencies and commodities) in a long/short framework. It combines top-down macro allocation and bottom-up selection with a disciplined risk management.
The objective is to beat inflation by 5% per annum over a market cycle with a volatility target below 8%.
The fund aims to substitute traditional long only diversified mix-assets funds. Portfolio manager is fully active and very flexible to adapt to rapid changing market conditions.
Solid long-term risk-adjusted track record since inception as measured by Sharpe ratio. Good downside protection, particularly in 2022 compared to traditional mix-assets funds.
Market Neutral ESG fund
Diversified market neutral global equity portfolio that aims to use ESG related factors as the primary driver of security selection and performance, combining this with sophisticated portfolio construction and risk management techniques. Idiosyncratic risk is the main driver of performance, rather than sector or country exposure, or style biases.
The strategy aims to provide a low correlation to equity markets, a low volatility (target 4%-5%), a low drawdown profile and minimal exposure to systematic risk factors. It results in stable and consistent absolute performance. The fund targets mid-single digit return profile and a long-term Sharpe ratio between 0.5 and 1.
The PMs are pioneers in data-driven ESG investing in alternative funds with industry leading technology and tools. Unlike many other market neutral strategies, the fund achieves its investment goal through the market cycles.
Diversified Absolute Return fund
Liquid, global multi-asset strategy that targets inflation +3-5% per annum over 5-year periods. The strategy invests with an absolute return mindset in a large array of asset classes: equities, fixed income, currencies, commodities and diversifying strategies (protection overlay).
The fund relies on three primary sources of uncorrelated returns: directional, relative value and diversifying strategies, implemented both though core and satellite trades. Volatility target is 6-8% with an ex-ante volatility cap at 12%.
Within the current inflationary environment, the team’s macro expertise makes the strategy well positioned to deliver strong risk-adjusted returns. It displays a low sensitivity to traditional asset classes (equity, bonds mainly) and very consistent returns. The goal is to create a smoother path and stable returns to mitigate the need for aggressive asset allocation changes.
It exhibits solid downside protection in extreme adverse scenarios historically benefitting from highly diversified portfolio and a solid risk management framework.
Historically, the fund delivered lower beta to global equities and bonds, smaller peak-to-trough drawdowns coupled with quicker recoveries. Strong downside protection as shown in all recent stress tests such as Q4 2018, Q1 2020 or 2022.
We hope that you will find these communications insightful, should you have any further interest related to our selection services, do not hesitate to contact us, we would be delighted to assist you.
WSP Analysts team