The fund was launched in January 2013 to provide investors with access to our multi-strategy capability. It is a diversified fund that combines thematic and systematic investment strategies aimed at absolute positive return and income distribution.
The fund:
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Brings together a diverse range of asset classes focused on absolute return
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Is structured to participate when markets are rising while offering protection in falling markets
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Is managed by a highly experienced team with an award winning track record
December 2018 - Latest commentary
We have exposure to one equity market in the growth momentum strategy. Elsewhere we are now active in nine areas; synthetic equity options, global infrastructure, renewables, property, active alpha, corporate bonds (short dated), government bonds, alternatives and opportunistic. We continue to hold equity index put options as downside hedges. The market rally at the end of November continued for only a few days into December before it gave way to renewed downward pressure. Although there were no new catalysts for the weakness, the S&P 500 index fell over 15% during the month before recovering to end down just under 9%, its worst December since 1931. Elsewhere wasn’t much better; the Nikkei 225 index also fell by 15% at its worst point while other global markets lost between 5% and 8%. Government bonds were the main beneficiary of stressed equity markets with yields tightening across the board.
The fund saw negative contributions from synthetic equity, property, midcap alpha, renewable energy, other alternatives, investment grade debt and infrastructure. High yield bonds and hedge positions were positive contributors over the month. As we move into 2019, uncertainty on the geopolitical front and normalising interest rates are likely to continue to weigh on equity markets that have enjoyed an extended cycle. The path of US interest rates will play a key role in the performance of equity markets, while US trade policies (disputes, negotiations and agreements) will highlight that uncertainty can offer the prospect of both positive and negative outcomes. The Brexit clock is ticking down and will undoubtedly impact sterling and the direction of large-cap UK stocks. Bond markets will continue to see divergence across countries and credit quality, but the real question is whether interest rate normalisation will become interest rate tightening. With all of this in mind, we continue to position the portfolio with the profile of a diversified convertible and favour option-based equity exposure (rather than pure directional investments) alongside income producing real assets and short duration bonds.
Previous months’ commentaries are contained within the fund factsheets.