Wells Fargo Asset Management (WFAM) has launched an absolute return fund focusing on developed markets to broaden its international product range.
The Global Equity Absolute Return fund aims to achieve long-term capital appreciation and an absolute, or positive, return regardless of market conditions.
The fund is sub-advised by Analytic Investors LLC and managed by Harindra de Silva, Dennis Bein and David Krider.
Ludger Peters, managing director of international business development at WFAM, said: "We continue to build out our international product lineup using the expertise and time-tested investment process of Analytic Investors.
"The team is widely recognised for a commitment to innovative investment research, disciplined quantitative methods and an ability to implement sophisticated trading and portfolio management strategies, which are increasingly important in a complex global market.
"Analytic Investors now sub-advises three WFAM international funds, which we think allows our clients to have access to greater investment capabilities as well as competitive solutions to help them reach their financial goals around the world."
The fund will consider developed markets to include countries included in the MSCI World index and will gain long exposure to equity securities its managers believe will outperform the equity market on a risk-adjusted basis and will gain short exposure to equity securities the managers believe will underperform the equity market on a risk-adjusted basis.
The fund may have a long equity exposure of up to 100 per cent of its net assets and a short equity exposure, achieved through the use of swap agreements and other types of derivatives, of up to 80 per cent of its net assets.
Alan Chan, director and chartered financial planner at London-based IFS Wealth & Pensions, said: "There are a number of global absolute return funds in the market already so the challenge will be to tell us how they are going to be different or better.
"I can see where absolute return funds in general can have a place within a large portfolio, but my personal view of absolute funds are that they are expensive and not attractive to hold for the long term.
"We do not use absolute funds for our clients. If we do, they are mostly for short term reasons to minimise market volatility during a period where other asset classes are heavily affected."
aamina.zafar@ft.com
