BNY Mellon Asset Management has expanded the choice of funds within its Dublin-domiciled Mellon Global Funds Ucits III range with the launch of its first global 130/30 strategy. The Mellon Global Extended Alpha Fund is managed by Mellon Capital Management, a specialist active asset manager that focuses on fundamentally-based global quantitative strategies.
The Mellon Global Extended Alpha Fund seeks to return 3 per cent above the MSCI World Index by targeting 130 per cent long and 30 per cent short exposure to the global equity markets through the use of equity derivatives, and offers a standard overall market risk (beta) of one.
A portfolio of between 350-400 stocks will be diversified across a wide range of countries, sectors and currencies, using Mellon Capital's valuation-based quantitative approach, which ranks stocks from the most to the least attractive.
Underpinning this approach to stock selection is a risk management framework fully integrated into the overall portfolio construction process. Initially available in the UK and Ireland, the fund will be available to European investors following registration in local markets, and offers daily pricing and liquidity.
'We are very pleased to be offering our first 130/30 portfolio within a global equity framework,' says Warren Chiang, managing director for active equity strategies at Mellon Capital. The ability to effectively short individual stocks results in more efficient alpha generation.
'At Mellon Capital we attempt to harness alpha in a slightly different way than other quantitative managers by placing emphasis on fundamentals and economic intuition, rather than depending on more empirical methods. We believe our forward-looking approach allows us to perform strongly in different market environments.'
Alan Mearns, chief executive of BNY Mellon Asset Management, says: 'With a track record of managing active equity since 1991 and long/short equity strategies since 2002, Mellon Capital stands out as one of the few managers in this field with proven experience. The team's ability to add value through skilled stock picking and their rigorous risk management system make them the perfect choice of manager for this strategy.'
Founded in 1983, Mellon Capital had USD211.6bn in assets under management at the end of last year, including USD29.5bn in assets managed in overlay strategies. Bank of New York Mellon provides asset management and wealth management, asset servicing, issuer, clearing and treasury services to institutions, corporations and high net worth individuals through offices in 34 countries and has more than USD23trn in assets under custody and administration, USD1.1trn in assets under management, and services USD11trn in outstanding debt.