The LMCG Global Market Neutral Fund has surpassed USD100 million in assets having proven popular with financial advisors seeking alternative strategies that have low correlation to traditional asset classes, lower volatility and diversification away from disruptions in global equity markets and a challenging bond market.
“The fund has gained early traction with sophisticated advisors, who are familiar with alternative mutual funds and feel comfortable using it for a variety of goals,” says Kenneth L Swan, Chief Executive Officer of LMCG. “Traditional ‘low-volatility’ options such as bond funds or allocating to cash may not deliver the overall return profile these advisors are seeking,” he continued. “We designed this Fund to offer investors a different option: to potentially generate positive returns regardless of the market’s direction.”
The LMCG Global Market Neutral Fund is a capital preservation strategy designed to generate positive returns in any market environment. The strategy seeks to provide investors with low correlation to traditional asset classes. The investment team attempts to neutralise market, sector and geographic exposures. They balance both long and short positions. The team avoids making macro-bets, guards against biases, and uses no leverage.
The stock selection process employs a quantitative methodology that has been time-tested over 15 years and stress-tested in extreme market selloffs. The Fund’s source of return comes primarily from stock selection, drawing on multiple and diversified sources of alpha. The portfolio owns global equities in local currencies, and stocks are selected based on multiple factors. Stocks which rank highly on these factors are purchased, while low ranking stocks are shorted.
With an inception date of 21 May, 2013, the LMCG Global Market Neutral Fund is a no-load mutual fund based on an institutional strategy initially launched at LMCG in 2007. The Fund’s portfolio managers were also the managers for the institutional strategy and have extensive experience in market neutral and global investments.
“We are pleased that the Fund is delivering on its stated objectives of capital preservation and moderate capital appreciation,” says Gordon A Johnson, PhD, CFA, Lead Portfolio Manager of the Fund. “Equity markets could continue to be volatile in 2016. Our Fund is designed to generate alpha on the long and short side – both domestically and internationally – and strives to provide a smoother ride for the investor whether the volatility that we are seeing continues or subsides,” he concluded.