Risk-optimised access to the absolute return asset class: Assenagon Multi Asset Absolute Return launched
In today's challenging environment of persistently low interest rates, increased volatility and changing correlation patterns, absolute return strategies offer a strategic investment alternative to private and institutional investors. Investment managers pursue a wide variety of approaches, which can produce significantly differing investment results. Therefore the portfolio management strives to select the most promising absolute return strategies and combines them in a risk-optimised overall portfolio.
Assenagon Asset Management S.A.'s newly launched Assenagon Multi Asset Absolute Return fund provides risk-optimised access to the absolute return strategies asset class (also known as liquid alternatives) within a UCITS framework with daily liquidity. For investors it opens up a broad range of promising investment strategies, each of them with distinctly different investment universes and approaches. Simultaneously it aims to create an intelligent and diversified portfolio structure by combining the different risk and return aspects of the selected individual absolute return strategies.
The experienced team of portfolio managers headed by Thomas Romig diversifies performance drivers and reduces cluster risks, aiming to achieve a long-term return of approx. 3% p.a. The portfolio's volatility is expected to range between 2% and 5%. The Assenagon Multi Asset Absolute Return fund benefits from a portfolio management team with a long and successful track record which is well documented by the many awards and top ratings the team has achieved for a broad variety of strategies over time. The fund thus offers a conservative solution designed to respond to the low interest rate environment aiming to decouple the fund's performance from the market's general direction as much as possible.
Private and institutional investors are increasingly looking for investment concepts which offer access to a broad range of asset classes and promising investment strategies, while at the same time avoiding sustained losses. Demand for absolute return strategies is constantly increasing, as shown by the growing number of available products and rise in assets under management. These strategies' focus on avoiding sustained losses, resonates well with the investment preferences of many investors such as foundations, church organisations, asset managers, family offices and institutional investors including insurers, pension funds and banks.
"By intelligently combining different absolute return strategies to create a diversified portfolio, we are uniquely able to meet the diverse needs of institutional and private investors", commented Vassilios Pappas, Assenagon's founding partner and managing director. "The Assenagon Multi Asset Absolute Return fund combines the advantages of a range of absolute return strategies into one innovative investment solution. With today's interest rates being this low, the approach represents an alternative means to integrate an attractive return source into one's investment strategy. The product is particularly attractive for institutional investors such as insurers and pension funds because the fund offers reporting in compliance with the German Insurance Supervision Act (VAG) and Solvency II."
Assenagon Multi Asset Absolute Return combines a number of promising absolute return strategies, each of which are managed by dedicated specialist portfolio managers. "We believe that forecasting short-term performance for a particular absolute return strategy generally makes little sense", explained Thomas Romig. "We therefore focus on the medium to long-term potential of an individual absolute return strategy. By selecting highly promising investment strategies with many differing approaches and investment universes, we are able to diversify our performance sources. In structuring the portfolio, we focus on diversifying the loss scenarios of the individual strategies, with the aim of minimising the fund's exposure to classical market risks as much as possible.
Portfolio management can choose from an investment universe of over 500 investment strategies, with core strategies in CTA/managed futures, multi-strategy, risk premia, long/short equities, long/short bonds, long/short credit, event-driven, currencies, volatility and global macro. Based on this universe the portfolio managers source investment ideas using quantitative database screenings, an in-house research database and a network of contacts built over many years. In addition to a quantitative analysis they also conduct a first qualitative assessment of the respective investment strategy, its special features and costs. Strategies which are deemed particularly attractive then undergo a comprehensive due diligence process. This includes on-site due diligence visits with analytical aspects focussing on past investment results, incentive structures, decision-making processes, possible risks and liquidity aspects of the individual strategy. Risk management works on multiple levels to enable achieving the desired performance profile while at the same time adhering to an adequate level of portfolio diversification and complying with specified risk parameters. At the individual strategies-level, selecting investment strategies from different investment universes (which preferably do not overlap) is crucial, as is the analysis and search for the investment strategies potential cluster risks.
At the level of the overall portfolio, each investment strategy is given a similar risk budget. For this purpose the portfolio managers focus on the risk of several investment strategies exhibiting simultaneous periods of negative performance. "Absolute return investors are primarily concerned about the risk of suffering permanent loss of invested capital", commented Thomas Handte, Multi Asset Portfolio Manager at Assenagon. "Therefore the assessment of loss scenarios within the context of capital market developments is as important as the analysis of the invested strategies' potential to experience losses simultaneously." This combined view enables the portfolio managers to develop a balanced overall portfolio and achieve a high degree of diversification.
Assenagon Multi Asset Absolute Return is designed for conservative investors. The investment horizon should be at least three years. There is no guarantee that the planned long-term return of 3% p.a. will be achieved.
Munich, 27 September 2016
For journalists only
This information is legally a marketing communication which does not meet all legal requirements designed to guarantee the independence of financial analyses and it is not subject to any prohibition on dealing ahead of the publication of financial analyses. The past performance of the strategy is not a reliable indicator of its future performance and does not guarantee future success. All information serves solely to support your independent investment decisions and does not represent any recommendation on the part of the issuing management company Assenagon Asset Management S.A. Assenagon cannot guarantee the correctness, completeness or accuracy of the information. Any liability arising from this document is therefore completely excluded. The only documents deemed binding are the prospectus and key investor information as well as the current annual and semi-annual reports, which can be requested free of charge from the management company at www.assenagon.com, or from the distribution, paying or information agents. The fund's net asset value may be subject to fluctuation. The full prospectus contains comprehensive risk information in that respect. All information is subject to change at any time without prior notice. The information was examined only for compliance with Luxembourg and German law. In some jurisdictions, the dissemination of such information may be subject to legal restrictions. The preceding information is thus not intended for natural or legal persons who have their residence or registered office in a jurisdiction that restricts dissemination of information of this type. Natural or legal persons who have their residence or registered office in a foreign jurisdiction should seek information on such restrictions and observe them accordingly. In particular, the information contained in this document is not intended for citizens of the UK (except to a person in relation to whom exemptions under the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order") apply. Relevant exemptions under the Order include, but are not limited to, Article 49 of the Order (high net worth companies)). The information contained in this document is also not intended for any resident of the United States or any other person deemed to be a "US person" as defined in Rule 902 of Regulation S under the US Securities Act of 1933, as amended, and this document does not purport to be an offer or sale of any interest in an Assenagon-managed fund to any such US person. No US federal or state securities commission or regulatory authority has confirmed the accuracy or determined the adequacy of this presentation or any other information provided or made available to investors. Any representation to the contrary is a criminal offense. For information on data protection, see the full prospectus.