2nd February 2011
BNY Mellon Absolute Return Equity Fund
BNY Mellon Asset Management announces the launch of the BNY Mellon Absolute Return Equity Fund, the first fund in its range to be managed by Insight Investment Management (Global) Limited (‘Insight Investment’).
The Fund will be a sub-fund of the Dublin-domiciled, UCITS III authorised, BNY Mellon Global Funds, plc range.
Launched on Monday 31 January 2011, the Fund will be managed by Insight Investment’s highly experienced specialist equity team, who have established a five year track record of generating positive returns in the Absolute Insight UK Equity Market Neutral strategy*. Insight Investment is part of BNY Mellon Asset Management.
Paul Feeney, head of international distribution at BNY Mellon Asset Management, comments, “We are delighted to be bringing our first new BNY Mellon fund to the market that is managed by Insight Investment. The launch of a fund utilising a skill set which has differentiated Insight Investment from its industry peers, for innovation and product leadership in the absolute return sector, is very rewarding. We believe this new fund will be an attractive proposition for investors.”
The Fund will aim to deliver positive absolute returns in all market conditions, over a 12 month period, investing in both long and short positions in the pan-European market by employing a paired trade approach. Through focused research conducted by a cohesive and highly skilled team of investment professionals, the Fund aims to identify pricing anomalies and profit from those opportunities through carefully constructed investment positions where risk is focused on the specific return drivers being targeted, while unwanted risks are hedged out.
Abdallah Nauphal, chief executive officer and chief investment officer – investments, at Insight Investment, added, “With significant imbalances remaining in the global economy, we believe that 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 returns for clients. The new BNY Mellon Absolute Return Equity Fund aims to fulfil this need within a robust risk management framework.”
He continued, “With over five years experience of successfully managing equity-based absolute return strategies, including a period of exceptional market turbulence, we believe that we are well-placed to deliver this type of solution.” The Fund’s investment process will capitalise on the skills and stock picking experience of the team and will be grounded in the paired-trade approach which Insight’s specialist equity team has applied within its Absolute Insight UK Equity Market Neutral Strategy since May 2005. The Fund will also be able to take large investment positions and directional market exposure to capture upside opportunities. As well as the dynamic management of net and gross exposure and daily liquidity, the managers will employ a stop-loss discipline on each investment position to help contain downside risk and drawdowns. Although the Fund will have no geographical constraints, initial focus will be on pan-Europe, with a bias towards the UK.
Andy Cawker, head of specialist equities at Insight Investment and co-manager of the BNY Mellon Absolute Return Equity Fund concluded, “Following a prolonged period of heightened market volatility, many investors are recognizing the value of specialist investment strategies which have the potential to participate in rising markets and can also deliver positive returns when markets fall. By blending our pair-trade stock selection skills with dynamic hedging informed by our broader understanding of market conditions, we aim to give investors smoother long-term returns, without sharp fluctuations in the value of their investments.”
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