The high-conviction portfolio aims to maximise total return – though no target is stated – with a volatility of 5-10%. It employs a liquid alternative strategy which seeks to exploit market dislocations and relative value opportunities through active trading of cash bonds, futures, options and other derivatives including CDX.
Positions are primarily taken through derivatives for maximum liquidity and can be long, short or market neutral.
The managers focus on both long-term value investing and active management of duration, yield curve and volatility.
The fund is billed as an alternative to traditional long-only bond investing and, given the rate of change and volatility in the macro space and weakening expectations for economic growth, flexibility is singled out as being key to investing successfully in the macro space.
