SYZ Asset Management has merged its SYZ AM (Lux) Absolute Return Institutional funds with its UCITS UK-registered OYSTER Absolute Return funds.
This move makes this proven strategy available to a wider investment public, particularly thanks to the launch of a retail-friendly RDR share class in GBP. Conservative and transparent, SYZ’s multi-asset approach combines cash, bonds, equities and alternative investments to deliver consistent performance with low volatility. Indeed, honed over 11 years by the same in-house investment team, this strategy has achieved a +35.5% cumulative return since fund launch in April 20081, with no negative calendar years and a moderate maximum drawdown of -2.77%2. Absolute return strategies, such as the one developed by SYZ Asset Management, are particularly appealing in today’s environment of low interest rates and high equity prices and can be well suited to both pre- and post-retirement investors.
Given today’s low yield environment, institutional and private investors are struggling to find valid alternatives to their cash or bond allocations. However, in the current low GDP growth environment, many investors are also wary of the stock markets’ volatility and historically high equity prices. SYZ’s absolute return strategy represents a compelling proposition, particularly as, contrary to many absolute return products that rely on complex “black box” strategies, SYZ’s approach is simple and transparent. Indeed, it invests in conventional investments using only investment grade bonds, a moderate allocation to equities, no short positions and limited exposure to alternative investments. The OYSTER Absolute Return funds are invested long only and the use of derivatives is limited to hedging of positions.
The OYSTER Absolute Return funds are managed in-house by the Multi-Asset Investment Team, which comprises Fabrizio Quirighetti (Head of Multi-Asset), Roberto Magnatantini (Head of Global Equities), Jérôme Schupp (Head of Research) and Adrien Pichoud (Economist). Very stable, the team has over 65 years of combined experience and is supported by 6 analysts, 2 assistant portfolio managers and two quantitative portfolio managers. The strategy, which totals EUR 1.2 bn in client assets (GBP 940 mn), was initially launched in 2003 through segregated GBP mandates for UK institutional clients and delivered positive returns in each calendar year1. The objective of the funds is to deliver a return of LIBOR + 200 basis points net of fees over a cycle, with a volatility below 3%, through a flexible and dynamic asset allocation. In reality, actual results have been much higher, with an annualised performance of +4.7% since fund launch, and a consistently low volatility of 2.89%, which results in a Sharpe ratio of 1.762. The investment approach focuses on liquidity and capital preservation by aiming to limit drawdowns during difficult market conditions.
A merger that makes the funds available to a larger public
Previously, the SYZ AM (Lux) – Absolute Return Institutional funds were only available to institutional investors. The merger with the UCITS UK-registered OYSTER Absolute Return funds will make this proven strategy available to a wider investment public. In particular, a GBP retail share class will now be offered.
Ian Penrose, Head of UK Distribution for SYZ Asset Management, commented "We are excited to give access to our best strategies to all investors going forward. The stability of the team, consistency of returns and demonstrable ability to minimise drawdowns in falling markets brings a very attractive fund to the broader wholesale and retail market.”
