The manager started by explaining that they are aware of the negativity towards this part of the market. They feel to a large extent this is driven by complex strategies where it is difficult to understand where returns are coming from. In terms of their strategy they believe it is simple, clean and easy to understand and this is what makes it different.
The fund aims to deliver a positive absolute return over any 12-month period and has achieved this in nine out of ten calendar years. It also delivers low levels of volatility. The strategy is simple; it is a straight long/short strategy.
What this means is that the team take positions in stocks which they think will go up (long positions), and short positions in stocks that are expected to decline. In theory if they get the balance right, they should deliver a positive return on a net basis….read more