Camomille launches long/short fund founded on behavioural concepts
UK-based investment boutique Camomille has launched its third product, The Camomille Leveraged Opportunities Fund, which systemises the trading behaviour of humans as reflected in the equity markets.
The fund represents a leveraged, long/short version of a strategy that has been run by the firm since 2011.
While many systematic strategies use advanced scientific and programming expertise to find patterns in market data, and subsequently attempt to attribute explanations to them, Camomille has worked in the opposite direction. The firm’s strategy is founded on the long-standing behavioural concept of the human capacity to return to ‘equilibrium’ after adversity.
Richard Hutchings, senior managing partner and chief investment officer at Camomille, says: "Rather than fit explanations to patterns, we target patterns that fit our explanations. We have empirically observed the pattern of market sell-off, consolidation and recovery over our 20 year existence and thus developed a model that aims to profit from this cycle.
“In essence, the fund only exposes itself to risk when it is statistically proven to offer highly favourable risk adjusted returns.
“We have tested our algorithms vigorously using all available historical market data and we believe we have produced a strategy that will remain consistent in its performance over time.”
The fund is domiciled in Cayman Islands with a Master Feeder structure and the strategy is executed exclusively through highly liquid listed equity and commodity index futures contracts. Credit Suisse Administration Services in Ireland are the fund administrator.
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