BNY Mellon unveils Absolute Return Equity fund

BNY Mellon Asset Management has launched an absolute return equity fund, the first in its range to be managed by Insight Investment Management.

The new product will be run by Insight's specialist equity team, which has a five-year track record in the space with its Absolute Insight UK Equity Market Neutral Strategy.

Portfolio managers Andrew Cawker, Richard Howarth, Iain Brown and David Headland will be managing the fund, and will aim to achieve returns of 6%-8%.

The fund will mirror the positions in the market neutral strategy, although will have higher weightings to some holdings to generate higher returns, at the risk of seeing greater volatility.

The BNY Mellon Absolute Return Equity fund aims to provide positive returns in all market environments over a 12-month period, by investing in positions paired with a hedge.

This includes both long and short positions across the European market. Stop loss positions will also be implemented in order to mitigate downside risk.

Insight Investments CEO Abdallah Nauphal says: "With significant imbalances remaining in the global economy, we believe markets will remain volatile for some time.

"In this environment, an active approach to managing a portfolio's market exposure will prove crucial in harnessing strong absolute return profits for clients."

He adds: "With over five years' experience managing equity-based absolute return strategies, including a period of exceptional market turbulence, we believe we are well-placed to deliver this type of solution."

As well as being grounded in a pair-trade approach, the fund can take large investment positions and directional market exposure to capture upside opportunities.

The fund will have no geographical constraints, although the initial focus will be on pan-European positions with a UK bias.

It will sit as a sub-fund under the firm's Dublin-domiciled, Ucits III umbrella vehicle, BNY Mellon Global Funds.