Multi-asset absolute return fund benefits from high hedge fund weighting

The Old Mutual Global Dynamic Fund, a multi asset absolute return fund managed by Old Mutual Asset Managers (UK) (‘OMAM’), continues to achieve its objective of generating absolute returns in all market conditions, helped by strong returns across its range of holdings and its hedge fund weighting.

The US$157 million fund, which actively allocates across equities, bonds, hedge funds, property and cash, has returned 43.7% since launch in August 2004, equivalent to an annualised return of 14.6%. Annualised volatility has been 6.2%, compared with 9.1% for the MSCI World Index. (Source: Morningstar, bid to bid, net income reinvested, UK sterling, 23/8/04 – 31/03/07).

Tracey Lander, manager of the Old Mutual Global Dynamic Fund, comments: “Currently we have a high weighting in hedge funds, which we believe is the core asset class in terms of matching the performance objective of the fund, and this strategy has helped us to continue to deliver positive returns through the recent period of market turbulence. Hedge funds have a low correlation with other asset class returns and therefore offer significant diversification benefits. The fund invests in a range of strategies, including equity market neutral and equity long/short. Currently we’re also overweight property, which continues to deliver positive returns with low volatility. Within equities we are overweight the UK small cap area, which offers excellent alpha generation opportunities through careful stock selection.

The Old Mutual Global Dynamic Fund is a fund of funds and has been managed since launch by asset allocation specialist Tracey Lander, who is AAA-rated by Citywire and was recently featured in the 2007 Citywire Top 100 Fund Manager of the Year list. The fund, which aims to generate capital appreciation through all market cycles, primarily invests across OMAM’s range of in-house unit trusts and hedge funds. The fund is highly diversified, giving exposure to a range of specialist funds and managers covering five asset classes.

Matthew Nagele, Managing Director of Fund Distribution at OMAM, adds: “The Old Mutual Global Dynamic Fund has a flexible investment remit and management style, meaning that it can invest in those assets which are best able to achieve absolute returns across a range of market conditions. Investors are placing increasing importance on wealth preservation and as a result there is growing demand for absolute return products such as this. This is a trend which we expect to continue to grow.”

The Old Mutual Global Dynamic Fund is a professional investor scheme domiciled in Ireland and listed on the Irish Stock Exchange. It has an annual management charge of 0.75% and a performance fee of 10% on new highs above cash plus 6% per annum. The fund has sterling, euro and dollar share classes, with the minimum investment being €125,000 (or the equivalent in sterling or dollars) and has weekly liquidity.