ARCO Investment Management (ARCO) has launched its daily-priced Absolute Return Fund, in response to investor feedback on its long-established Australian equities.
The company said it saw several private wealth and family office investors, as well as their advisers, being attracted to the strategy’s capital preservation and compounding return track record, but who sought daily liquidity and pricing for the strategy.
According to ARCO, the new fund would appeal given the current market conditions.
ARCO’s co-portfolio manager and co-founder, Peter Whiting said: “The fund is designed to shield investors from downside equity risk when equity markets are flat to falling while building wealth over time.
“The key objective of the ARCO Absolute Return Fund are to deliver steady, compounding investor returns over time through stock alpha generation, with an overarching focus on capital preservation and with lower volatility compared to the broader equity market.
“We hedge the ‘long’ portfolio against market drops by selling short securities that we believe are priced well above their underlying values.”
The strategy would have a diversified portfolio of between 40 and 60 stocks which would include both long and short positions.
ARCO is chaired by Bruce Loveday, a former chairman of Bennelong Funds Management Limited and Praemium Limited.
He also currently serves as chairman of Burnham Capital, part of the private family office, Burnham Group.
