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James Williams, Hedgeweek

AIFMD might help to simplify UCITS, according to chief executive of Schroder Investment Management… Zadig Gestion launches Active Risk Parity Fund…

Deutsche Asset & Wealth Management has added a euro-hedged share class for its db x-trackers MSCI World Index UCITS exchange-traded fund on the Deutsche Borse, reported

The EUR2.2billion ETF tracks the market cap-weighted MSCI World Index which is made up of more than 1600 companies spanning 27 countries. This

follows the launch earlier this month on the London Stock Exchange of a USD-hedged share class for its db X-trackers MSCI Japan Index UCITS ETF.

Simon Klein, head of exchange traded product sales, EMEA and Asia, was quoted as saying:

“Increasing numbers of our clients are asking for currency-hedged exposure as they’ve witnessed the potentially diluting impact un-hedged exposure can have on their international equity performance.” To illustrate this, the MSCI World Index was up 13.6 per cent at the start of September, compared with 21.1 per cent for the euro-hedged version of the index.

Manooj Mistry, head of exchange-traded products EMEA, confirmed that more currency-hedged offerings would be brought to market by Deutsche in the near future.

Zadig Gestion (Luxembourg) S.A., an independent asset management company, has launched a Luxembourg-based UCITS fund
called the Active Risk Parity Fund; a sub-fund of the firm’s existing Memnon Fund. Zadig Asset Management LLP in London will act as adviser to the fund.

Laven Legal Services, the boutique law firm in London and Luxembourg specialised in setting up investment funds, advised Zadig Gestion on the structuring and launch of the fund.

The fund launched with EUR16million of seed capital from the firm and will be open to investment by institutional and retail clients on 18 September 2013. The Memnon European Fund, which launched in 2011, is up 18.9 per cent according to the firm’s website. The new fund will aim to generate positive medium to long-term capital growth in all market conditions using a systematic asset allocation process and achieve high single-digit annualized returns. Target volatility will be below 8 per cent. Instruments at its disposal include government bonds, commodities, equity indices and credit.

Sébastien Maillard, Head of Systematic Asset Allocation at Zadig Asset Management
, devised the Active Risk Parity strategy. Maillard said: “At Zadig I have found a great platform to pursue the development of the Active Risk Parity investment process initiated 7 years ago. I am glad to be part of a team of entrepreneurs and talented people and delighted to bring to the firm strong and reliable global macro views useful to navigate current markets.”

Kaltrine Balaj, Manager at Laven Legal Services
, added that the fund was “an exciting addition to Zadig’s existing range of funds. We have worked closely with Zadig and the CSSF to help its launch at an exciting time when funds using derivative instruments linked to, amongst other things, commodity indices are proving popular with the market.”

Tokyo-based boutique equity research and portfolio management firm Koyal Group has announced that its asset management division has seen assets under management in its Japanese UCITS fund surpass USD500million. The recent inflows have largely come from US and European investors keen to diversify their portfolios and leverage on the recent changes in Japanese monetary policy dubbed “Abenomics” after Japanese Prime Minister, Shinzo Abe.

The Nikkei 225 Index is up an impressive 39.97 per cent YTD as the country introduces sweeping economic reforms to reflate its way into recovery. Abe has set a 2 per cent inflation target annually, which has seen the yen depreciate sharply, as well as introduce aggressive quantitative easing. Unsurprisingly, Japanese equities have been highly favoured by global investors this year. This has helped Koyal Group’s UCITS fund reach an important milestone

The introduction of the AIFM Directive will help preserve the simplicity of UCITS
according to the chief executive of Schroder Investment Management Ltd in London, reported COOConnect this week, citing the recent ALFI Global Distribution Conference in Luxembourg.

Massimo Tosato was quoted as saying that there had been much debate about the complexity of instruments in UCITS and talk about tightening up the eligibility of assets available to UCITS managers and believed “the AIFMD will lead to some of the more complex products being transferred from UCITS to AIFMs”. He added that the debate over whether regulators will force UCITS to be split into “complex” and “non-complex” was too simplistic: “A lot of strategies in UCITS may be complex and hard to understand but not risky to the end-investors,” Tosato was quoted as saying. 

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