The fund aims to provide a combination of capital growth and income of at least 3-month Euribor plus 4% a year, before any Ongoing Charges over any three-year period. The 3-month Euribor is the rate at which banks borrow money from each other. The fund aims to achieve this while seeking to limit losses and minimise the degree to which the value of its assets changes over time. Managing the fund in this way reduces its ability to achieve returns significantly above three-month EURIBOR plus 4%.
Investment policy and strategy
Core investment: The fund typically invests via derivatives in a mix of assets from anywhere in the world, including company shares, bonds, currencies, cash and assets that can be turned quickly into cash. The fund may also invest directly, or through other funds. The fund may invest in Chinese bonds denominated in Renminbi.
Other investments: The fund may invest in asset-backed securities, contingent convertible debt securities, other funds and cash or assets that can be turned into cash quickly.
Derivatives: The fund invests via derivatives and may use derivatives with the aim of reducing the risks and costs of managing the fund.
Strategy in brief: The fund has a highly flexible investment approach, with the freedom to invest in different types of assets from anywhere in the world. The approach combines in-depth research to work out the ‘fair’ value of assets over the medium to long term, with analysis of market reactions to events to identify investment opportunities. The blend of assets held in the fund is regularly adjusted depending on where the investment manager sees the most value, and to manage risks in order to limit losses. The investment manager looks to manage risk by combining different assets which are affected by market conditions in different ways, and by employing derivatives strategies to help protect or profit from falling markets. Where the investment manager believes it appropriate, the fund may hold a high level of cash.
Performance comparator: The fund is actively managed. The 3-month Euribor plus 4% is a point of reference against which the performance of the fund is measured.
Risks associated with the fund
The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
An ‘absolute return’ fund may not move in line with market trends or fully benefit from a positive market environment.
The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset’s value vary in an unexpected way, the fund will incur a loss. The fund’s use of derivatives may be extensive and exceed the value of its assets (leverage). This has the effect of magnifying the size of losses and gains, resulting in greater fluctuations in the value of the fund.
The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.
The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.
In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.
The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
The Fund allows for the extensive use of derivatives.