Indeed, the fund had a very poor start to the year, generating a loss of just less than 6.5% in the second week of February, although it has, since then recovered to just above breakeven.
A major reason for this performance, Mukhamedova said, is the fund’s strong view that US rates are likely to rise more quickly than the market expects.
So far this view has not come to fruition, indeed, many are now predicting that US rates will take even longer to rise following the latest disappointing jobs number. But, as one commentator told Portfolio Adviser, while it is completely acceptable to have a specific macroeconomic view, it is important to ensure that one has adequate risk mitigation strategies should that view be proved wrong, especially in an absolute return fund.
Given how much money OMGI has invested int he fund, it is unlikely to do anything but continue to support it. Indeed, the firm was clear to highlight its commitment to the fund in the initial press release, but losing its leader is unlikely to help its cause in the market – especially one like the targeted absolute return sector, where other options abound and the focus seems ever more to be on multi-asset solutions.
