H2O Asset Management has launched a long/short equity fund to take advantage of the current low-interest rates, the London-based boutique has announced.
The objective of the Dublin-domiciled fund is to keep volatility below that of global equity markets within a three-year investment horizon. The fund will take both long and short positions on economic sectors and listed companies.
H2O AM said the dispersion of risk premia across equity markets has reached unprecedented levels, thereby offering many unique arbitrage opportunities for active relative-value managers.
Commenting on the launch, Legoff and Chappuis said the duo's “top-down” component is critical to seize the shifts in paradigm, the swings in market fashions and the correlation rotations that impact the equity asset class as a whole.
It said this enables the team to focus solely on those strategies that are relevant to the on-going environment.
The launch comes shortly after the firm unveiled two new liquidity-focused funds to address liquidity problems in the current market.
The firm said the positive side of this multi-strategies approach is that it does not necessitate the comprehensive and systematic coverage of an excessively large security investment universe, by means of a crowd of equity analysts.
The H2O MultiEquities fund returned 30.34% in US dollar terms over the three years to the end of January 2017. This compares with a 17.01% rise by its Citywire-assigned benchmark, the MSCI AC World TR USD, over the same time period.