The Julius Baer Absolute Return Europe Equity Fund will aim for positive returns over a business cycle irrespective of market direction and at a lower risk level than equity markets. Andy Kastner, the lead portfolio manager, will run a fairly concentrated portfolio of between 50 and 80 long/short equity positions.
He will use a strategy where each long position is paired with an equally weighted short position from the same sector aiming for a neutral position within the fund compared to of both the market and the sector. Kastner’s simple logic is that providing the long positions outperform their short counterparts, the fund will deliver alpha regardless of market direction.
The market neutral alpha strategy will be implemented via derivatives (total return swaps) with cash invested in liquid, short-dated high quality money market investments to ensure liquidity at all times.
This proposition is a subfund of Julius Baer Multistock, a Luxembourg-domiciled Sicav.
Fund name – Julius Baer Multistock – Absolute Return Europe Equity Fund
Launch date – 30 September, 2010
Domicile – Luxembourg
Legal structure – Sicav
Base currency – euro
Benchmark – LIBOR EUR 3 Months
Management fee – 1.20% p.a.
Performance fee – 10% of the outperformance vs. the LIBOR EUR 3 Months (= Hurdle Rate) with high watermark