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Natixis launches multi-strategy absolute return fund


Natixis Global Associates has launched a multi-strategy absolute return fund in conjunction with AlphaSimplex Group, the Natixis ASG Diversifying Strategies Fund.

Natixis Global Associates has launched a multi-strategy absolute return fund in conjunction with AlphaSimplex Group, the Natixis ASG Diversifying Strategies Fund.

The fund follows a risk-managed absolute-return strategy and is managed by Dr. Andrew W. Lo, a pioneer in alternative investment strategies.

The fund is believed to be the first mutual fund to actively manage a low-to-negative correlation with major equity indexes by selling S&P 500 futures when necessary. As a result, the longer-term correlation of the fund with the S&P 500 is expected to be minimal or negative.

It is designed to provide absolute returns with diversification benefits, while also offering daily liquidity, transparency, and volatility controls.

‘The largest source of risk in many investors’ portfolios is equity market risk,’ says Lo. ‘We designed this fund to answer a broad-based need for portfolio diversification with low to negative long-run correlation to the major equity markets within a liquid and transparent mutual fund vehicle.’

It is a US ’40 Act fund, available only to US investors through A, C and Y shares. Using highly liquid futures and currency forward contracts to gain desired exposures, AlphaSimplex seeks to deliver absolute returns through a diversified, actively managed global portfolio of long and short positions. Fund management employs multiple quantitative absolute-return models (e.g., trend models, macroeconomic factor models, and relative value models), actively adjusting weightings in response to changing market conditions. An annualized volatility target and a dynamic draw-down control mechanism help manage its risks.

The minimum investment is USD2,500 for A and C shares, and USD100,000 for Y shares.

‘The latest ASG fund is a result of our innovative approach to mutual fund development,’ says John Hailer (pictured), president and chief executive officer of Natixis Global Asset Management, US and Asia, and head of NGA US and international distribution. ‘By addressing the current needs of average investors, including diversification away from the equity markets, reduced volatility and a goal of downside protection, Andrew Lo and the AlphaSimplex team continue to focus on making alternative approaches more accessible and affordable for individual investors.’

The fund is the second US mutual fund managed by AlphaSimplex Group. Last October AlphaSimplex launched the Natixis ASG Global Alternatives Fund which is based on a hedge fund industry beta replication strategy. In contrast, the new fund is based on proprietary AlphaSimplex strategies and attempts to maintain a low to negative correlation with equity markets even over periods as short as one year.

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