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Argonaut launches hedged share class for Alpha fund

Argonaut launches hedged share class for Alpha fund

Argonaut Capital has added a sterling-hedged share class option to its £395m FP Argonaut European Alpha fund.

The fund house said the launch was in response to client demand for a way to protect against, or potentially play, volatility in the exchange rate between the euro and sterling.

Sterling has been weak in the lead up to the referendum over the UK’s membership of the European Union, but the share class seeks to guard against a possible reversal of this trend.

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Barry Norris, manager of the FP Argonaut European Alpha fund, said: “UK investors often have strong views on the euro. Fears of a Brexit have recently triggered significant weakness in sterling, which may reverse post-referendum in the event of a pro-EU result.

“Therefore the time is right to offer a hedged share class option for Alpha unitholders wishing to protect themselves against future euro weakness.”

The FP Argonaut European Alpha fund has returned 33.8 per cent over three years, compared 22.3 per cent generated by IA Europe ex-UK sector over the same period, according to FE Analytics.

Matthew Harris, director of Dalbeath Financial Planning, said: “For most of the overseas funds that we recommend to clients we would not want a currency hedge, as a diversified exposure to many different currencies is an important part of spreading the risk of a portfolio.

“However, in some cases we can see the rationale for it, and for investors who really hate the Euro this is a nice option to have.”