TOBAM offers anti-benchmark ex-Japan fund

Paris-based asset manager TOBAM has launched an Anti-Benchmark Pacific ex-Japan Equity fund with seed funding from Seven Investment Management.

The Ucits IV fund seeks to maximize diversification across the investment universe, as represented by the MSCI Pacific ex-Japan Index, by applying TOBAM’s patented maximum diversification approach.

By maximizing diversification across the Pacific ex-Japan region – an investment universe with numerous and complex geographical, political, sector and other risk factors – the fund aims to deliver the full equity risk premium to investors.

Over a market cycle, it aims to outperform the MSCI Pacific ex-Japan equity cap-weighted benchmark by 4-6% per annum, while at the same time delivering significantly less volatility (typically 30%).

This fund applies a one-step optimization to maximize diversification at the global level, bypassing the sector, country and style biases that more traditional allocation methods such as market-cap weighting can lead to.

Peter Sleep, portfolio manager at Seven Investment Management said the firm is excited to extend its relationship with TOBAM. “The Anti-Benchmark approach and its risk/return profile are particularly attractive and relevant for our clients, who will now have the ability to access it in the Pacific ex-Japan geography,” he commented.

Yves Choueifaty, President of TOBAM, said foreign investors look to markets such as Australia, New Zealand, Singapore and Hong Kong as a source of diversification.

However, the market-cap weighted index in the region is strongly biased – with hefty concentrations in a small number of sectors. By applying the Anti-Benchmark method to the investment universe, TOBAM offers exposure that is both diversifying and diversified.

TOBAM now offers 13 funds covering regional and global equities as well as commodities. An Anti-Benchmark Emerging Markets Equities fund was launched in June 2011.

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