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Acadian Asset Management launches Global Leveraged Market Neutral UCITS Fund

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Acadian Asset Management has launched the Acadian Global Leveraged Market Neutral UCITS Fund, which will aim to achieve positive absolute stock selection returns in any type of market environment.

Domiciled in Dublin, the fund will be market neutral in that the aggregate long and short exposures aims to be equal at the time of rebalance, neutralising exposure to the direction of equity markets, cash, sectors, country, currency, company size and a number of other factors, providing a ‘true’ market neutral approach.
 
As a result, the fund will be neutral to the market risks that may impact other parts of an investor’s portfolio. By contrast, risk will be concentrated in stock selection; aiming to provide positive absolute stock selection return in any type of market environment. The fund will use leverage, typically greater than twice the value of the underlying capital, in order to amplify returns from stock selection, looking at a universe of more than 40,000 stocks.
 
This approach therefore seeks highly valuable uncorrelated returns to market beta at a time when global markets are likely to face higher volatility in the near term, with wider dispersions and a greater likelihood of mispricing providing corresponding opportunity for stock pickers in coming years.
 
The fund represents a continuation of Acadian’s long standing investment process. The strategy is systematic, but grounded in fundamentals. This allows Acadian to identify systematic exposures that are not obvious to a fundamental manager, but also allows for a vigorous bottom up stock picking analysis. This quantitative approach enables Acadian to move beyond these well recognised exposures and build a more thorough assessment of the Fund’s specific factor exposures.
 
Alex Voitenok, Senior Vice President and Director of Long/Short Strategies, Acadian Asset Management, says: “Markets are at historic highs, which may indicate that a correction is likely in the near term. A market downturn or increased volatility would support the opportunity for active stock selection by increasing dispersion and potentially sending some fundamentally sound stocks to attractively priced levels. A market neutral strategy is designed to be a diversifier in these circumstances, as we target zero correlation with global equity markets and seek to be neutral to market direction.“
 
Kelly Young, Managing Director, Acadian Asset Management UK, says: “Our European seed partners for the Fund represent a cross-section of investors, demonstrating a desire to defend portfolios from likely market volatility and the appeal of a previously successful market neutral strategy within a liquid and familiar UCITS structure.”
 

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