SVM to launch fund equipped for volatile markets

SVM UK Absolute Alpha Fund, the new launch from Edinburgh based independent fund management group SVM Asset Management, has been approved by the FSA. The launch period will run from Wednesday 11 March 2009 to 7 April 2009, enabling investors to invest both their 2008/09 and 2009/10 ISA allowances in the fund.

In 2008, share prices of only 31 FTSE All Share companies went up, and a massive 580 companies experienced share price falls. SVM believes that 2009 could produce another very mixed bag of results and is launching SVM UK Absolute Alpha Fund to give investors the opportunity to profit from both rising and falling share prices.

The UCITS fund will give investors the advantage of a long/short investment approach in a structure which is transparent and easy to access. It will be managed by Colin Mclean, utilising his proven track record in long/short investing. The new fund will invest in UK equities, similar to the successful SVM Saltire fund which delivered positive returns of +19.7% in 2008, compared to a fall of 29.9% in the FTSE All Share Index.

Since launch in 2002, SVM Saltire has delivered an annualised return of 12.7%, captured approximately 80% of upside in rising markets and generated positive performance in falling markets.

SVM UK Absolute Alpha Fund will close to new investment when assets reach £200 million, to enable SVM to maintain the investment strategy and flexibility which has worked so effectively for Saltire over the past market cycle.

Colin McLean, Managing Director, SVM Asset Management Limited, says: "We continue to witness unprecedented market events and fund managers need to adopt new tools and strategies to deal with these conditions. We believe that trying to time markets or call the bottom of the market is doomed to failure and the key is bottom up company analysis. The crisis has proved that experts have no monopoly on wisdom or information and there is a lot of information available beyond that provided by companies and city analysts. At SVM we do not rely on these sources and avoid making investment decisions based on traditional measures such as earnings per share, which can be manipulated by company boards.

"By concentrating on top line measures such as cash conversion and operating profit margin we can identify the companies with the fundamentals to do well despite the recession, and also those which might suffer as a result of deteriorating trading, balance sheet weakness or high valuation."

Mark Noble, Head of Retail Sales & Marketing, says: "We have been managing long/short funds since 1992; we have a strong track record and have delivered positive results in bear markets. As such we expect this to be a very successful launch which will appeal to investors."

The new fund will aim to deliver returns in excess of cash (as measured by LIBOR) over 12 month periods, and to substantially beat cash over all three year periods. Through a full market cycle SVM expects to outperform the FTSE All Share Index. The focus will be on generating positive returns over the long term rather than positive performance each month, as such SVM believes the appropriate time frame for investing in the new fund is at least three years.