f you’re seeking the best investment possible and yet are also concerned about low interest rates and volatile share markets – you’re not alone. Many investors are also worried about the illiquidity of property and what may happen to property prices when the tailwind provided from falling interest rates, eventually subsides. Like others, you are most likely asking, “How can I protect my wealth, and at the same time, earn the best return possible – through all economic conditions?” In searching for the best Australian investments, including the best Australian managed funds, we should observe the world’s most sophisticated investors, who invest heavily in alternative investments, which include various hedge fund strategies, such as; market neutral funds, long short funds, actively managed funds, income funds, etc. These hedge funds are focused on absolute returns, meaning they target positive returns, regardless of the the prevailing share market conditions.
The Rushton Global Market Neutral Fund, an ASIC registered managed investment scheme, is open to investments of $50,000 or more and is a professionally managed ‘absolute return’ investment with a net target return of 14% per annum. The performance of our market neutral investment strategy is not dependent on the direction of the share market and can perform equally well in both good and bad times. More importantly, due to its high target return and low correlation to other investments, it has the ability to enhance the return of an overall investment portfolio, whilst, at the same time, lowering risk.
When it comes to investing, what you don’t know, can hurt you. Due to a lack of investment knowledge, many investors are currently taking too much risk to earn too little. To protect and enhance their lifestyle, investors need to become more knowledgeable about alternative investments. For all of the facts on the Rushton Global Market Neutral Fund, get your PDS emailed to you right now, by clicking on Request Further Information above, or any of the links below.
Some of the key benefits of investing in the Rushton Global Market Neutral Fund are:
High return target of 14% per annum
We target an average annual compound net return of 14% per annum (i.e. 12% above the RBA Cash Rate) after fees and costs, but before tax. The aim is to achieve this target return over rolling three year periods, and with the least amount of volatility possible, by utilising our unique market neutral investment strategy, combined with a high level of diversification and extremely rigorous risk management. Note: Investors are referred to Section 5 of the PDS, which explains the key risks of an investment in the Fund. Click here for a copy.
No share market risk, due to our market neutral approach
Being market neutral, we construct a portfolio containing two sub-portfolios, i.e. a long and a short portfolio, and hold approximately equal dollar amounts of both long and short positions, which removes share market risk. Rather than generate a profit from the upward movement of the share market, as in a normal share investment, in our market neutral investment, a profit is made when our highly ranked (long) portfolio outperforms the lowly ranked (short) portfolio – regardless of whether the share market moves up or down. This allows our disciplined investment strategy to operate without the concerns of a share market correction, or crash. Full details of how our market neutral strategy works are provided in the PDS. Click here for a copy.
The strategy can perform equally well in both good and bad times
The investment strategy can perform equally well in both good and bad times, meaning that performance of the Fund is not based on favourable economic conditions, or rising asset prices. This is different to most other investments, including shares and property, which largely rely on continually rising asset prices, and consequently, these investments usually perform poorly when asset prices are stagnant, or falling. As most investors have few investments in their portfolio that can perform well in bad times, they tend to suffer sizeable losses when economic conditions deteriorate, and would therefore benefit greatly by including an investment that can perform well under these adverse conditions. How this works is explained in detail in the PDS. Click here for a copy.
We only invest in the largest and most heavily traded listed securities, providing a high level of liquidity. Monthly withdrawals are available. For full details, please refer to the PDS. Click here for a copy.
Highly diversified investment
It is often said that ‘diversification is the only free lunch in finance’ and effective diversification is central to our approach to investment management. Firstly, our strategy is based on seven key investment themes that each generate profits at different times and under a range of market conditions. These seven themes provide for strong diversification at the strategy level. Further, the strategy is spread over approximately 400 to 600 Instruments in seven countries across the Asia-Pacific region and Europe, i.e. Australia, Hong Kong, Singapore, England, France, Germany and Switzerland. This high level of diversification assists in smoothing overall performance, as it is our aim to maintain stable and consistent returns through all economic conditions. A full explanation is provided in the PDS. Click here for a copy.
Minimal currency exposure
As the security for all international positions is primarily held in Australian dollars and there are approximately equal amounts of both long and short exposure in each currency (i.e. the strategy is currency neutral, as well as market neutral), the effect of currency movements is minimal. The proportion of overall risk that can be attributed to currency exposure is so small that it does not negatively impact the strategy in a significant manner. The end result of being currency neutral is that investors achieve the benefits of international diversification across many countries, without the constant worry of currency movements. For a full explanation, refer to ‘Currency Risk’ on Page 31 of the PDS. Click here for a copy.
Low correlation to the returns from shares
The most effectively managed investment portfolios combine acceptable investments that are lowly correlated to each other, which provides true diversification benefits and adds considerable value to the overall investment portfolio. It is even more important to ensure that these low correlations are sustainable over time – even under the worst possible economic conditions, i.e. when asset prices are falling and the diversification benefits are needed the most. By combining lowly correlated investments that each produce an acceptable risk-adjusted return over time, it is possible to enhance investment performance without increasing overall risk. See the PDS for further details. Click here for a copy.
Carefully managed volatility
We aim to maintain volatility at very prudent levels and to produce a very good return for the level of volatility accepted. In other words, we aim to generate a high risk-adjusted return. Request the PDS now for full details. Click here for a copy.
Extensive risk management guidelines
We believe that if an investment strategy is grounded in sound academic theory, combined with a practical knowledge of market dynamics, it should continue to provide strong returns over the medium to long term, provided the various risks inherent in the process are managed well.
Our risk management procedures ensure that only those risks which we consider to be conducive to positive long-term performance are accepted and those that don’t, are either eliminated, if at all possible, or if not, are carefully controlled. Risk management is not simply about addressing common risks either, as risks that occur rarely (tail risks) are also carefully identified and managed to the fullest extent possible. The PDS explains in detail as to how we manage risk. Click here for a copy.