Skandia Investment Group (SIG)’s flagship multi-asset fund, Skandia Diversified and its Skandia Alternative Investments Fund, have invested in the Aviva Investors Index Opportunities High Alpha Fund.
The investment into the Aviva Investors Index Opportunities High Alpha fund sees SIG’s GBP2.1bn* suite of multi-asset and alternative funds, further diversifying the investment strategies utilised within their alternative allocations. The investment was funded primarily from the cash which resulted as the multi-asset funds took significant profits from their overweight positions in equities.
The Aviva Investors Index Opportunities High Alpha Fund, run by Iyad Farah and Ned Kelly, is an index arbitrage fund which aims to take advantage of the pricing inefficiencies generated when equity indices are systematically rebalanced, through the use of active stock analysis and portfolio construction skills, alongside index analysis and value added execution.
Farah and Kelly along with the rest of the Aviva Investors team have significant experience using index arbitrage to generate alpha. The managers already run a lower risk version of the fund which launched to external investors last year and also takes advantage of the pricing anomalies associated with indices.
The High Alpha version of the Aviva Investors Index Opportunities fund has been designed for investors who want to take advantage of the higher return opportunities that sit within the market. This coupled with the fund’s ability to utilise a bigger risk budget makes it a good fit with the other alternative strategies within the Skandia Diversified Fund and the Skandia Alternative Investments Fund.
John Ventre (pictured), lead portfolio manager for the Skandia Diversified and Skandia Alternative Investments Funds says: “Iyad and his team have a wealth of experience in utilising index arbitrage to generate returns from the rebalancing inefficiencies of index funds. This experience coupled with the high alpha approach of the fund makes it a welcome addition to our Alternative Investment and Diversified Funds. As the range of strategies available within UCITS expands, we have been able to add further diversification within our alternatives allocations. We particularly like strategies such as this, which target clear market inefficiencies.”
John Clougherty, chief executive, Aviva Investors UK Fund Services Limited, says: “We are pleased that Skandia has added the high alpha version of our Index Opportunities fund to its well regarded multi-asset fund portfolio. The product leverages both the active and passive management skills of a team who have been through many economic and market cycles together, observing firsthand the activity they now seek to exploit. We are proud to be able to offer such innovative and tailored investment solutions to our clients.”