Man’s alpha-generating quant funds could do beta

Investment management firm Man Group has launched two Dublin-domiciled Ucits-compliant equity funds.

The Man Numeric Market Neutral Alternative fund offers investors exposure to the Numeric Alternative Market Neutral Strategy, which aims to generate positive absolute returns using multiple alpha sources across a variety of market environments, with holding periods ranging from around four weeks to a year.

Overseen by Man Numeric’s co-heads of hedge fund strategies Greg Bond and Daniel Taylor, the strategy, designed to be highly liquid, aims to provide consistent, low-volatility performance uncorrelated to market indices and other quantitative vehicles.

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The Man Numeric Emerging Markets Equity fund is based on the Numeric Emerging Markets Core Strategy – managed with a focus on quantitative, bottom-up stock selection through a systematic and disciplined process.

The fund aims to outperform the MSCI Emerging Markets Index.

Portfolio managers Ori Ben-Akiva, Greg Bunimovich and Mickael Nouvellon provide oversight by evaluating all trades for data accuracy, as well as news flow and special circumstances.

Both funds will be managed by Man Numeric, the Boston-based quantitative manager acquired by Man Group in September 2014.

The Man Numeric Emerging Markets Equity fund has been passported across Europe, while the Man Numeric Market Neutral Alternative fund is currently pending approval in nine countries including Switzerland, Austria and Germany.

In February, Man Group announced it had entered into a conditional agreement to acquire the investment management business of NewSmith.

The acquisition is expected to complete in this year’s second quarter, subject to regulatory and other approvals.

Provider view

Michael Even, president and chief executive of Man Numeric, said: “We are delighted to launch these Ucits-compliant funds, offering investors in the European market access to two of our core alpha-generating strategies for the first time.

“These launches have been made possible by becoming part of Man Group, enabling us to leverage the firm’s resources and expertise to reach an investor base we would not otherwise have been able to.”

Adviser view

Dennis Hall, IFA at Yellowtail Financial Planning Ltd, based in London, said: “It has been a long time since I saw anything from the Man Group – neither fund sounds great to me. I am not a fan of absolute return funds. I do not think they can deliver a sustainable performance for a long period of time.

“I think that there are easier ways to make the returns they are looking for. They could invest in smaller companies or in the developed market rather than investing in the emerging market where they are exposed to currency risk and political risk.”

He added: “With the markets at an all-time high, clients might not want to invest all their money at once, but instead choose to stagger their investments.”

Charges

Man Numeric Market Neutral Alternative fund ranges from 1.50 per cent to 2.25 per cent, depending on the different share classes.