Bringing you live news and features since 2006 

SYZ & CO launches a new alternative fund – “Tail & Trading”

RELATED TOPICS​

SYZ & CO has has launched OYSTER Multi-Manager Tail & Trading, a new sub-fund of its Luxembourg Part II SICAV 3A Alternative Funds.

Devised by SYZ Asset Management, this innovative new fund combines two complementary alternative strategies in order to provide investors with protection in the current environment, which is generally unfavourable to traditional asset classes. It thus combines decorrelated CTA funds with funds that pursue a strategy of active protection against extreme risks (“tail risk”). Thanks to its low correlation with the financial markets and other alternative strategies, this new fund aims to provide a significant improvement in the risk profile of a traditional portfolio.
 
CTA funds (“Commodity Trading Advisors”) are alternative strategies that have a number of advantages: low correlation with the financial markets, a systematic management approach, high liquidity and positive yield expectancy. Historically, these funds have afforded effective protection in typical market downturns and are therefore a good complement to a traditional portfolio. These strategies are volatile, however, and may undergo abrupt trend reversals.
 
Extreme events, by definition, are rare but when they do occur – as in 2008 – the correlation between the different asset classes tends to increase and diversification no longer protects portfolios effectively. Usual protection against these events consists of using a passive portfolio insurance strategy, by buying put options that are renewed at maturity. Unfortunately this practice is expensive and, in the long term, its costs exceed the gains made during the periods of stress. In contrast, in the case of the OYSTER Multi-Manager Tail & Trading fund, SYZ Asset Management invests in funds that have an active risk management strategy. This active approach consists of constantly selecting the most attractive put options, in order to reduce the cost of insurance during periods of low volatility whilst maintaining potential gains in the event of increased volatility.
 
The OYSTER Multi-Manager Tail & Trading fund allocates the majority of its assets to CTA funds (combining short-term, medium-term and macro systematic approaches) and supplements it with an active risk management strategy. The proportion allocated to the two strategies may vary. 
The pro-forma historical results of this combination are particularly attractive, in terms of both annualised performance and volatility. In view of these good results and a low correlation with the financial markets and the other alternative strategies, the inclusion in a traditional portfolio of an allocation – however moderate – to this strategy significantly improves its maximum drawdown and volatility characteristics.

This new strategy is available in five different reference currencies (USD, CHF, EUR, GBP and JPY). The fund invests its assets exclusively in the products based on the managed accounts platform developed through the cooperation between SYZ Asset Management and UBS Investment Bank. OYSTER Multi-Manager Tail & Trading provides weekly subscriptions and redemptions. The fund is only aimed at an institutional client base. 
 

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
ETFs
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by