The fund is a long/short equity fund which aims to achieve a cash plus 6% return over five years before charges. An equity long-short strategy is an investing strategy that involves taking long positions in stocks that are expected to increase in value and short positions in stocks that are expected to decrease in value.
The managers explained that the returns were muted in 2015 and 2106 because there were few opportunities, but this has started to change. The team aim to focus on the risks they want and minimise the risks that they don’t. They call trades within the fund “pair trades” and it is how this is matched that ultimately delivers the returns. They used an example of a long position in a Spanish Bank and the three different options they can use….read more