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Alternative Market Briefing

Zenith believes Aussie market neutral funds offer out-performance and diversification across the board

Monday, February 11, 2013

Beverly Chandler, Opalesque London: Australian investment researchers, Zenith Investment Partners have published their 2013 Equity Market Neutral Review. The firm examined seven of what they consider the best of the market neutral funds offered to Australian investors.

Zenith believes that one of the key strengths of the sector is the range of different strategies market neutral funds can employ, with the funds they cover investing as quantitative managers, fundamental stock pickers and a relative value strategy. Daniel Liptak, Head of Alternatives at Zenith Investment Partners explains: "This results in a list of funds which have limited correlation to the broader equity market, but also importantly, limited correlation to each other."

Liptak quotes George Soros "It is not whether you’re right or wrong that’s important, but how much money you make when you are right and how much money you lose when you’re wrong" in his review of the sector. Liptak believes that Australian market neutral funds provide capital preservation and more reasonable participation in alpha than the average long only Australian equity fund but also, he writes, they are among the best performing strategies globally.

As a group, the Zenith Investment Grade Market Neutral Funds 2013, returned a cumulative return of 246.94% in the 10 years to October 2012 (net of fees). Over the same time the broad Australian market has returned 128.17%......................

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