London-headquartered systematic investment manager, Aspect Capital, has officially launched the Aspect Diversified Trends Fund.
London-headquartered systematic investment manager, Aspect Capital, has officially launched the Aspect Diversified Trends Fund. The Dublin-domiciled UCITS III-compliant OEIC began trading 29th December 2010 and is now available to institutional investors. The newcits is an onshore variant of the firm’s Aspect Diversified Program (the offshore fund being Aspect Diversified Fund) – a systematic product that uses trading algorithms to capture momentum in medium-term trends across a range of deep, liquid futures markets. Speaking with Hedgeweek, Aspect Capital’s Sales Manager for UK and Europe, Ted Frith, said the performance of the Diversified Trends newcits would be “almost identical” to its offshore counterpart and would have the same risk target. “We intend to minimize tracking error and surprise,” said Frith. “The volatility target will be +17 per cent.” In Bloomberg’s top-100 performing funds in 2010, the Aspect Diversified Fund ranked 35, generating +15.36 per cent returns. Frith confirmed that the fund had already attracted interest in Germany and Italy: “We have three external investors already and a further dozen are looking to finalise due diligence in the next two to four weeks.” The fund will be marketed to institutions in Scandinavia and possibly France but anticipates less demand from UK institutional investors.
Traditionally, German investors have found it difficult to invest in offshore funds. But as more hedgies adopt the cloak of transparency under UCITS III regulations, it appears alternative onshore strategies, such as the Aspect newcits, are now on their radar. “German investors have traditionally focused on the fixed income world, which has started to become a problem for a number of schemes,” said Frith, adding that falling bond yields are causing them to open up to the idea of using managed futures to diversify their portfolios.
Aspect built the fund in-house. “We’ve listened to clients’ gripes about costs, counterparty risk, tracking issues, taken this feedback onboard and designed a superior product,” explained Frith. Aspect’s CEO, Anthony Todd (pictured), said: “I am confident that the Aspect Diversified Trends Fund will prove to be an extremely competitive and attractive option to a wide range of investors.” The main advantage to this is that Aspect can be rigorous when choosing service providers. Those chosen, with Aspect as investment manager, include: Quintillion, the fund’s independent administrator; BNY Mellon as custodian, and KPMG for auditing. Quintillion, along with Aspect, will independently value the fund’s derivatives contracts daily, with Newedge appointed as swap counterparty. “The key now is to get to critical size: ideally USD100million as quickly as possible,” said Frith.
