GAM eclectic will target absolute returns in all market conditions with low correlation to equity markets and low volatility. As the fund name suggests, the manager will invest in a mix of themes and companies where he identifies a sizeable difference between market value and intrinsic value.

“The recent performance of hedge funds has left many investors disappointed with returns as they had hoped these strategies would protect them from major market drawdown. I am looking forward to launching a product that embodies much of what hedge funds traditionally stood for, where hedging out of market risk is considered just as important as the need to generate absolute returns,”Mark Hawtin, the investment director of the fund, said in a statement.

The fund will also focus on stocks and themes that are well positioned to benefit from major change, as GAM notes that the dispersion of returns between winners and losers is often the greatest.

Mr Hawtin believes consistent absolute returns are generated through a balanced focus on fundamental investment research, and an effective trading and risk management strategy to maximise profits and protect capital.

“Adopting an eclectic investment style is about making use of the best elements of all systems and ensuring that the balance between fundamentals and trading are managed according to the market environment,” addedDavid Solo, GAM chief executive officer.

GAM Eclectic will be open to investment from February 2009 for a limited period. GAM has assets under management of $58 billion, as at 30 June 2008.