Aegon Asset Management is launching a UK Equity Absolute Return Fund which aims to capitalise on the group’s UK equity investment process.
The fund intends to provide investors with positive absolute returns regardless of the direction of UK stocks.
It will do this through investing in long and short positions in UK listed equities, with a strong focus on reducing volatility and preserving capital.
Managed by David Griffiths and David Pringle from Aegon Asset Management’s UK equity team, the fund will use the team’s stock-picking process to select assets.
The fund will consist of three portfolios: long equity, short equity and cash. The size of the long and short portfolios will vary according to the manager’s discretion but will typically not exceed a ten per cent net long or short position.
Griffiths and Pringle will be supported by the 12-strong UK equity team headed by Stephen Adams.
The fund will normally hold between 50 and 100 stock positions and will be constructed using contracts-for-difference, which are a means of gaining long and short exposure to individual stocks.
It is structured to be uncorrelated with the equity market and aims to generate out-performance of its benchmark through diverse and uncorrelated strategies. Although it will not have an overriding theme, it is expected to benefit from macro economic and other themes identified by the UK team working closely with Aegon Asset Management’s head of strategy and chief investment officer.
To celebrate the launch of the fund Aegon Asset Management will be discounting the funds initial by 2.5 per cent to three per cent until 30 April 2010.
Steve Kenny (pictured), Aegon Asset Management’s European head of retail sales, says: “This is an exciting addition to our current UK equity fund portfolio, which will be able to maximise the stock-picking process our UK team has been deploying so successfully over the last few years for its various funds. Both David’s are very experienced UK equity investment managers and analysts, and they will be ably supported by Stephen and the wider UK team.”
The fund is a sub fund of the Aegon ICVC a UK domiciled Oeic and will have Ucits III investment powers.