The Active Fixed Income Value Fund was launched in July 2016 and employs a discretionary arbitrage-based investment approach. The Fund trades in interest rates and Foreign Exchange arbitrage strategies and invests in G12 and EU markets with minimal net long or short bias. The portfolio will consist primarily of derivatives and options, either in the over-the-counter or exchange listed, which are all highly liquid.
At the heart of the investment process is the management of risk with its pre-defined limits that seek to maintain risk levels consistent with those of the fixed income markets.
While the approach is discretionary, it utilizes an internal proprietary quantitative trade evaluation system that is the genesis of every investment in the portfolio. Market opportunities identified by the quantitative models originate from a bottom-up process. Investment decision is dependent on a top down qualitative assessment of the investment managers, drawing on their expertise and current knowledge of market conditions, with a particular emphasis on liquidity.
The quantitative investment process ensures consistency of approach and selection of market opportunities by the investment management team. While investment decisions are discretionary, the quantitative investment process enables an objective approach when determining allocation, optimization and risk management.
In our opinion, our UCITS vehicle will offer absolute performance and diversification from trends in bond and equity markets, providing long convexity behavior to protect the portfolio in difficult market conditions. We are the view that this product is an all weather fund, able to perform in most market conditions.