Absolutely fundamental offering

An absolute return fund is being mooted for the New Zealand market which would be made up of products from a number of managers' offerings.

Wednesday, May 18th 2011, 7:35AM

The proposal is being headed by T and the New Zealand Absolute Return Association.

TGN Fund Developers principal George Bayley told delegates at last week's SiFA conference that he is seeking expressions of interest. If there was sufficient demand a fund would be put together.

It would be like a fund of fund made up offerings from Charles Drace's Socrates Funds Management, PIE Funds, 36 South, MGH Asset Management which is headed by former Colonial manager Mike Gibbs-Harris, Robert Holroyd's Commodity Strategies and MS Capital.

The NZARA has been running an absolute return index managed by Ernst and Young to measure the performance of the sector.

There are currently seven managers in the index representing a cross section of strategies - including global equities, commodities, trend-following and long volatility/tail risk strategies. At January 31, 2011 there were a total of 20 different funds or managed account programs coming into the index from the eight constituent managers combined.

Bayley says the index has outperformed managers such as Man AHL, Platinum and Hunter Hall's Value Growth Fund.

Since the NZARA index was created in 2007 it has produced an average annual return of 16.5% and a total compound returns of 70.4%.

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