UK manager J8 Capital Management and German investment company Universal Investment have launched UI – J8 Global Absolute Return Ucits fund. The sub-fund implements J8’s global absolute return strategy, a scientifically-backed, systematic and rules-based multi strategy approach focused on momentum and carry as well as value trades. The aim of this multi strategy is to generate attractive returns by trading long as well as short positions, regardless of market conditions.
“The focus of our investment strategy lies exclusively on fixed income, currency and commodity markets and consciously leaves out equity markets. The sub-fund is therefore ideal as a natural diversifier for equity portfolios”, said Tillmann Sachs, J8’s founder, chief investment officer and head of Research.
The fund invests in bonds and currencies of G10 countries as well as in commodity markets of the Bloomberg Commodity Index universe. Consideration is also given to ethical and social investment criteria. The risk-weighted portfolio returns are scaled to a target volatility, while the uncorrelated return profile aims to help investors diversify their portfolio risks and even out returns in the long-run.
The sub-fund is scaled to a target volatility of ten percent and long-term returns are expected between seven and ten percent per annum. The strategy of the sub-fund has already been trading live and audited for over three years in the J8 Futures fund; as a commitment vis-à-vis investors, management is significantly invested. This offshore fund outperformed the SG-CTA index in all three years, with the excess return versus the index amounting to 17.16 percent (net). 2018 also had a positive start.
J8 and the global absolute return strategy are systematic and market-agnostic which means that trading decisions are not based on opinion or emotion. Nevertheless, the current positioning of the trading model reflects the expectation of further rising interest rates, a weaker US dollar and rising oil prices.