The Quantum UK Absolute Income Fund, launched in November 2005, has recorded a total return of 17.4 per cent over the past three years – 21 percentage points better than the HFRX Global
The Quantum UK Absolute Income Fund, launched in November 2005, has recorded a total return of 17.4 per cent over the past three years – 21 percentage points better than the HFRX Global Hedge Fund index which showed a decline of 4.27 per cent over the same period.
The fund has been managed to give stable returns with low volatility, and is showing positive returns over three months, six months, 12 months and since launch three years ago.
The aim of the fund is to produce a total return equal to UK interest rates plus two per cent per annum, and to pay the majority of this out as quarterly income. It is a Ucits III vehicle, and is suitable for investors seeking income or low risk absolute returns.
It employs two uncorrelated investment strategies to deliver the returns: a call writing strategy which relies largely on covered call writing; and a long/short stock selection strategy, which is operated within strict risk management limits
The fund is run within tight risk constraints which mirror the return target of interest rates +two per cent pa. Volatility has remained in the five per cent to six per cent range since launch, including over the volatile last six months. Overall, it displays a similar volatility to corporate bonds.
Appointed in June 2008, Joel Amsellem is the fund’s director of investments. A French national, he was previously with Louis Dreyfus, Société Générale Asset Management and Lehman Brothers. Since he was appointed as investment manager, the fund has recorded a total return of 7.7 per cent – outperforming the HFRX Index by 34 per cent.
Mark Mathias, chief executive of Quantum Asset Management (photo), says: ‘The UK Absolute Income Fund offers investors demonstrably better risk adjusted returns than hedge funds, corporate bond or equity income funds. Its ability to deliver consistent absolute returns during a period of unprecedented market volatility makes it attractive to traditional hedge fund investors. In addition it can pay regular dividends. This makes AIF a natural candidate for inclusion in any income or absolute return portfolio.’
