Liquid alternative investments firm 361 Capital’s Global Long/Short Equity Fund (AGAZX) outperformed its benchmark during its first year of trading.
The find also placed in the top eight per cent of the Morningstar Long/Short Equity Category out of 349 funds for the one year period ended 31 January, 2015 (based on total return).
The 361 Global Long/Short Equity Fund is sub-advised by Los Angeles-based Analytic Investors and uses the same investment strategy as the Analytic Global Long/Short Equity Composite, which commenced December 2009. The Fund is quantitatively focused, using a systematic approach to identify and exploit market inefficiencies. It seeks to achieve long-term capital appreciation by participating in rising markets and preserving capital in down markets.
“Funds that can perform and control risk in volatile environments play a key role within a portfolio, and the 361 Global Long/Short Equity Fund has been a proven performer,” says Tom Florence, President and CEO of 361 Capital. “There aren’t many funds in the market that have demonstrated the kind of success that this Fund has over the last year and five years for the composite.”
Fund managers seek to reduce volatility and equity market risk in the 361 Global Long/Short Equity Fund by maintaining a low equity market beta. But unlike other low volatility strategies, fund managers also dynamically adjust the portfolio based on changing risk profiles of global markets and individual securities in the portfolio – fine-tuning the portfolio to take advantage of whether value fundamentals or growth fundamentals are leading the market.
“With low-risk stocks outperforming both high-risk stocks and the investment universe in the fourth quarter of 2014, this is a favourable environment for our Global Long/Short strategy,” says Harin de Silva, PhD, CFA, President and Portfolio Manager of Analytic Investors, and sub-advisor to the Fund. “Our short exposures to the Energy and Materials sectors led performance at the sector level. Country allocations – particularly an underweight position to the United Kingdom – provided moderate gains, while excellent stock selection within the US helped the portfolio outperform the investment universe.”
