Frankfurt-Trust (FT) expanded its market-neutral equity fund portfolio by global variant portfolio diversification by combining different regions and strategies.
The correlation between equities and bonds has risen in recent years. Investors wishing to diversify their portfolio as widely as possible, FT offered a solution with the FT Alpha strategy since the end of 2011. The goal of FT Alpha is to generate an attractive absolute return while eliminating the market risk. This specific approach allows for performance independent of conventional systems. Following the successful implementation of FT Alpha strategies for the regions Europe, Euroland, USA, Japan and Germany in institutional mandates and a public fund, the strategy can now also be implemented globally diversified. On 18 May the FT Alpha global market neutral was launched as a public fund with three tranches.
FT Alpha global market neutral combines the three regional strategies for Europe, the USA and Japan, which increases diversification and significantly reduces risk. The values are selected on the basis of a quantitative multi-strategy model, which selects a total of up to 150 attractive shares. Since the strategies differing from region to region are largely uncorrelated, the portfolio is broadly diversified not only regionally but also with regard to the model risk. The market risk is hedged so that the alpha is left as the income from the title selection. Fund manager Marc Ospald, head of Liquid Alternatives of FT said: “We are concentrating on our core competency: the quantitative stock selection.”
“With the global FT Alpha solution, we offer investors the ideal blend for their portfolio: because of the low correlation with traditional investments, a substantially higher return can be achieved in the overall portfolio,” explains Sebastian Hofmann-Werther, who is responsible for the institutional management business and the public fund of FT. “The strategy is also suitable for investors who need to pay attention to low capital requirements for regulatory reasons.”