Layered ideas fuel positive returns

Alternative Investments

Winner

INVESCO Wholesale Global Targeted Returns Fund – Class A

Finalists

Partners Group Global Value Fund (AUD) – Wholesale
GMO SGM Major Markets Trust

A multi-layered idea approach to achieving a dual objective has elevated INVESCO’s Wholesale Global Targeted Returns Fund – Class A above its peers to take out the Alternative Investments award.

The liquid alternative strategy’s two objectives consist of delivering a return target of cash +5 per cent over the long-term, and reducing half of the volatility in global equities over a rolling three-year period.

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INVESCO head of sales, Eben Bowditch, said to achieve the objectives, the fund had a two to three year investment outlook on 25 to 30 ideas that had different investment goals.

“We call them ideas but essentially they’re trades or positions and each one of those positions are designed to operate a positive return,” he said.

“The fund’s philosophy is to find ideas in any asset class. It’s an unconstrained research approach that’s managed in a robust risk framework.

“So the fund is a genuine multi-asset that can invest in volatility, inflation instruments, equities, currencies, fixed interest, credits, and real estate proxies. It invests in just about every asset class that’s possible in a liquid format.”

Last year’s award winner, Partners Group Global Value Fund cited its achievements to the fact that it had exposure to over 1,000 private companies globally, the valuations were earnings based, and that it was not exposed to market sentiment.

Partners Group senior vice president, Jonathan Abraham said: “The end result is a portfolio that over the last 12 months has done in excess of 11 per cent return, and with a volatility of 5.7 per cent since inception. It has a low correlation to public equities as well”.

Investment in highly liquid markets to take advantage of market opportunities has lead GMO SGM Major Markets Trust to flourish as a finalist.

GMO senior portfolio manager of its systematic global macro team, Sean Gleason, said the fund believed all forms of macro investment strategies were under-utilised.

“We follow a quantitative investment process to manage long and short exposures in a range of global equity, bond, currency, and commodity markets using exchange traded futures and forward foreign exchange contracts,” he said.

“We designed the strategy to adjust risk-taking across asset classes and between investment styles according to the opportunities to add value.”