Eaton Vance Management has launched the Eaton Vance Global Macro Absolute Return Advantage Fund, a mutual fund managed for total return.
Designed to complement traditional asset classes, the fund employs a flexible strategy that provides wide-ranging exposure to global investment opportunities, including many typically unrepresented in conventional investor portfolios.
As an absolute return fund, the fund benchmarks performance primarily against short-term cash instruments and expects to provide returns over the long term that are substantially independent of movements in the stock and bond markets.
In making investment decisions on behalf of the fund, Eaton Vance uses macroeconomic and political analysis to identify opportunities throughout the world in both developed and emerging markets.
The fund’s investments will normally consist primarily of positions in the debt, currencies and interest rates of sovereign nations. The fund may also invest in corporate debt and equity, municipal obligations and commodities-related investments.
Under normal market conditions, the fund invests at least 40 per cent of its net assets in foreign investments and may have significant exposure to foreign currencies and derivative instruments.
"We’re country pickers," says Michael Cirami, co-portfolio manager. "We seek to identify disconnects between a country’s fundamentals and the pricing of assets in its investment markets."
Relative to the original Global Macro Absolute Return Fund, the new fund differs in two principal respects: first, a reduced exposure to investments in frontier markets, thereby freeing the fund from capacity constraints that limit growth potential of the original product; and second, the targeting of higher levels of potential return and a willingness to accept commensurately higher performance volatility.
