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Barings Launches Dynamic Absolute Return Fund

Amisha Mehta

28 June 2016

has launched the Baring Dynamic Absolute Return Fund, using long and short strategies to target a market neutral return over a rolling three-year period.

The UCITS fund, which will invest in both absolute value and relative value opportunities, is expected to hold between 10-20 diversified market strategies at any given time. Positions will be subject to risk budgeting constraints, with volatility expected to average around 7 per cent. The portfolio will use drawdown controls to limit downside over any given month.

Barings plans to register the fund in Austria, Denmark, Finland, France, Germany, Luxembourg, Norway, Spain, Sweden, Switzerland and the UK. It will offer accumulation, income, institutional and retail share classes.

The fund will be managed by James Ind. He will be supported by the firm's multi-asset investment team.

“Investment returns are under significant pressure, with a third of the sovereign bond universe offering negative yields. The need for alternative funds to diversify traditional growth assets is driving significant fund search activity,” said Ind.

“Using top-down investment models, the Baring Dynamic Absolute Return Fund will be agnostic as to overall market direction. Use of long and short strategies as well as derivatives will allow the fund to adapt to different market regimes.”