Baring Asset Management is adding an emerging markets hedge fund to its long/short range. Manager M...
Baring Asset Management is adding an emerging markets hedge fund to its long/short range.
Manager Marlies van Boven has developed a quantitative investment strategy based on stock selection and return forecast models. The fund will hold around 70 long and 30 short positions.
"The factors we use are all fundamental, macroeconomic and a mixture of value and non-value factors," she said.
"Net exposure changes over time, and long and short positions are a function of the macroeconomic outlook of the world."
Short candidates will be expensive stocks, negative in analysts' eyes, with relatively poor performance.
"The current reduced appetite for risk has impacted significantly on emerging markets equities and, as a result, volatility has been high," van Boven said.
"Volatility in the fund has been very low because the portfolio is a result of an optimisation process. It diversifies market risk away while preserving the alpha. You have a natural diversification across countries and sectors."