Tower shifts fund to Oz base

Tower Managed Funds launched its newest investment product at the Financial Planners and Investment Advisers Association conference in Palmerston North last week.

The latest offering, the Advantage Multi-Trading Fund, joins the Advantage Hedge Fund as a complementary absolute return product. Both hedge funds are structured in a tax-efficient Australian unit trust (AUT) format and are diversified, multi-manager, multi-style funds.

The aim of the Tower Advantage series hedge funds is to produce positive returns to investors regardless of the market trend direction of bonds and shares.

Tower says they are timely products for investors during the present turbulent period of poor returns for international equities.

The primary difference between the two funds relates to their respective suites of manager styles. The Advantage Multi-Trading Fund is the more aggressive of the two and includes the global macro style, which involves placing directional bets on large expected changes in market trends.

By contrast, the more conservative Advantage Hedge Fund excludes global macro and trades only across the market neutral strategies of relative value, event-driven and long/short equities.

The two different suites of trading strategies result in different risk profiles for the two funds. Investors can choose between the lower risk proflie of the Advantage Hedge Fund or the higher risk profile of the Advantage Multi-Trading Fund. Alternatively, investors can combine holdings in the two funds in various proportions to produce transitional risk profiles across the pairing.

"For the conservative investor wanting to smooth out overall portfolio returns and introduce low correlation with bonds and shares, the Advantage Hedge Fund is the right choice," National manager mezzanine clients Michael Coote says.

"The more aggressive investor seeking growth and higher volatility should pick the Advantage Multi-Trading Fund."

The Advantage Multi-Trading Fund is based on the same set of Global Asset Management (GAM) hedge fund managers as the long-established Tower GAM Multi Trading Fund.

The older fund is in the GIF A tax category.

Investors will be encouraged to transfer their funds from the GIF A GAM product to the new AUT structure.

As a result they can receive improved tax treatment and a higher risk/return profile on the new investment.