James Williams, Hedgeweek

Man Group teams up with Nomura to launch systematic fixed income UCITS… iShares adds dollar-hedged EM bond ETF to its platform…

Man Group and Nomura have launched the Nomura Man Systematic Fixed Income UCITS Fund, it was announced this week. The underlying strategy, which has been accessible via a number of different investible formats since summer 2012, is run by Man Systematic Strategies (MSS). It merged with AHL, Man’s flagship managed futures manager, earlier this year to form a joint quantitative investment unit.

The strategy seeks to capture largely directional opportunities in emerging and developed market swap, futures and FX markets. Around 50 markets are targeted, based on approximately 300 systematic trading signals.

Andre Rzym and Stefan Sluke co-manage the strategy. Both formerly worked on AHL’s managed futures funds, where Rzym headed up fixed income. To mitigate risk the strategy only trades liquid instruments using a low margin-to-equity ratio (i.e. leverage) and does not pursue opportunities with a pronounced tail risk.

“The competition for pursuing alpha opportunities has diminished as banks have reduced their risk taking in fixed income markets considerably since 2008, creating the potential to generate strong returns. However, it has been difficult for investors to tap into these opportunities in a UCITS-compliant way with daily liquidity. We are therefore pleased to make such an offering available to investors,” commented
Sandy Rattray, CEO of AHL-MSS.

Added Jean-Philippe Royer, CEO of Nomura Alternative Investment Management: “
A systematic fixed income UCITS fund offering daily liquidity and desirable tail behaviour is a compelling alternative for investors looking for returns in the current environment. This partnership with Man is a great addition to our existing range of UCITS funds and we are pleased to be able to bring such an innovative strategy to a wider audience of investors.”

Sturgeon Capital, founded in 2006 with the launch of the Sturgeon Central Asia Fund, has launched its global distribution strategy for its UCITS IV-compliant Sturgeon Central Asia Equities Fund
in partnership with Swiss-based ACOLIN Fund Services and Lemanik Asset Management. The fund invests primarily in equity securities of companies listed on regulated markets but which have substantial exposure to Central Asia and the compelling regional growth story.

Based on the success of the initial 6-month marketing period, which resulted in a doubling of the Fund's assets since launching in October 2012, Sturgeon Capital has partnered with Lemanik Asset Management in Luxembourg and ACOLIN Fund Services in Zurich in order to roll out full global distribution of the Fund to both retail and institutional investors alike.

Paul Henderson, Head of Business Development and Marketing for Sturgeon Capital
said that when the firm was looking for distribution partners they needed professional teams that could provide market insight and also had “established and robust global networks. We needed to be confident that these networks would reach the widest audience possible given the relatively niche nature of our regionally focused fund range. I believe that we have found partners that exceed those expectations in both ACOLIN Fund Services and Lemanik Asset Management.”

“Thanks to our distribution partners, we are pleased to be able to provide both retail and institutional investors alike with access to exciting investment opportunities in these fast growing, but relatively overlooked, frontier and emerging listed equity markets,” said
Clemente Cappello, founder and CEO of Sturgeon Capital.

The Fund is initially being registered for public distribution in the UK, Sweden, Switzerland, Belgium, Estonia, Finland, Latvia and Lithuania, with more markets due to be added as demand dictates.

In other fund launch news,
a new emerging markets ETF has been launched by iShares, BlackRock’s ETF platform. The iShares JP Morgan $ EM Bond EUR Hedged UCITS ETF– contender for longest fund name! – has been developed to provide investors with currency-hedged emerging market bond exposure. The fund is listed on the London Stock Exchange and will offer exposure to US dollar-denominated sovereign and quasi-sovereign bonds from emerging market countries. Sovereign bonds differ from government bonds by not being issued in a country’s domestic currency.

The fund’s largest exposure will be to Russian, Colombian and Peruvian bonds. It will have a total expense ratio of 0.5 per cent and will be benchmarked against the JP Morgan EMBI Global Core Index. Only bonds with a minimum remaining time of maturity of two years at inclusion, and a minimum amount outstanding of USD1billion, will be considered in the portfolio’s underlying index.

The fund uses a static monthly hedging index methodology, using a one-month forward foreign-exchange contract. This allows investors to reduce the impact of fluctuations between the portfolio’s base currency and the currency of the constituent securities in the Index. 

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