Stenham Asset Management has launched the Stenham Ucits Macro Fund, a fund of funds portfolio that will leverage the group’s previous experience managing some $2bn in hedge fund investments.
This is the second Ucits vehicle launched by the manager, following its Equity Ucits Fund in November 2013. Stenham launched its first macro strategy in 1993.
The fund will invest in a high conviction portfoli of 10 funds in the Ucits Macro universe, overseen by Akshay Krishnan (pictured), Stenham’s head of Global Macro Strategies, and chief investment officer Kevin Arenson.
The portfolio will use the same allocation approach as the existing Stenham Trading macro strategy, which has shown resilience in periods when global equities have performed poorly. Stenham Trading has suffered two years of negative returns out of 21 calendar years.
Krishnan said: “Launching a UCITS strategy is a natural progression for Stenham. Up until about 18 months ago we felt the macro UCITS universe did not offer enough depth for a fund of funds product, but we are now increasingly seeing top quality managers making the move into UCITS. There is no doubt the pool of investment talent on offer has developed substantially in the few years.”
“We also believe now is an opportune time in the market to launch this strategy. It is no secret a number of macro managers have struggled to excel in the low volatility environment we have experienced over the past few years, as market volatility has been suppressed by central bank intervention. However, this began to change for the first time in a number of years during the latter part of 2014. We believe we are seeing nascent signs of an improving opportunity set for discretionary macro trading as foreign exchange and interest market volatility has picked up in recent months.”
“Monetary policy divergence is a key determinant for foreign exchange and interest trading opportunities. Numerous idiosyncratic opportunities have arisen over the last six months as monetary policy around the world has become differentiated, e.g. NZ rate hike and pause, India rate cuts, Russia FX crisis, Peru rate cut, SNB surprise action, Mexico rate cut, Canada rate cut, Sweden rate cut, Brazil rate hike etc. Macro performance has rebounded strongly in the last few months as the trading environment has become increasingly fertile. In addition, we continue to believe discretionary macro as an asset-class remains compelling as a hedge against equity and bond market sell-offs and a potential spike in volatility, especially given current valuations in other asset classes.”