Octopus to add Global Opportunities to MM fund range

Octopus is planning to add a new product to its IM Octopus multi-manager fund range in the autumn.

The portfolio, which is provisionally titled IM Octopus Global Opportunities, will sit alongside the four existing funds in the range – IM Octopus Fixed Income, Alternative Strategies, UK Equity and International Equity.

The range is managed by Bish Limbu and Colin Lunnon with support from the boutique’s wider investment team.

Global Opportunities will be an absolute return fund targeting cash plus 4% or 5% and aiming for a low correlation to equities and bonds.

The IM funds are standalone vehicles but also function as the building blocks for Octopus’ risk-based discretionary service, Octopus Portfolio Manager.

Limbu says the fund will be one of several planned additions to the suite of products.

“New additions to this range will have a primary purpose of making another useful ‘asset’ available to Octopus Portfolio Manager investment profiles.

“The second purpose would be to target or meet demand for direct investments into any foundation fund,” he says.

The group intends to hire a quantitative analyst and expand its derivatives capability before launching the new vehicle.

Plans for a cash fund mooted late last year have been postponed because of the low interest-rate environment.

“The IM Octopus Cash fund was incepted with the others – we have chosen not to launch so far, given the poor returns on cash and additional fund of fund costs,” Limbu says.

Meanwhile, he is preparing to selectively hedge overseas currency exposure on the other multi-manager funds.

“We have been in the hedged share class in Polar Capital Japan, and GLG has added a sterling hedged share class to its offshore fund – we pushed for that,” he says.

Last year he began repositioning to portfolios from being about two-thirds in passive funds to two-thirds in active funds. He also intends to add a futures overlay to the funds.