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Nomura launches innovative new absolute return UCITS III fund

Wednesday, June 09, 2010
Opalesque Industry Update - Nomura, the global investment bank, has today announced the launch of the Nomura Interest Rate Investment Strategy IRISx4 Fund. The fund, developed by Nomura Investment Solutions plc, aims to provide institutional investors with absolute returns by investing in interest rate markets.

The IRISx4 fund is the latest development in Nomura's UCITS III compliant product suite. Its investment objective is to provide investors with four times leveraged exposure to the performance of the Nomura Interest Rate Investment Strategy (IRIS).

IRIS is an interest-rate positioning index which dynamically adjusts in changing market and economic conditions using macro-economic and quantitative indicators. Developed by Nomura's fixed income macro-quantitative research team, the index is highly diversified and consists of four trading strategies. It implements long or short positions across the interest rate curves of six markets1 using liquid fixed income instruments - money-markets futures, bond futures and interest rate swaps - through more than 40 trading positions.

Jean-Philippe Royer, head of the Fixed Income Fund Solutions Group at Nomura said: "Despite current market conditions, investors are still looking for absolute excess returns in the range of 7 to 8 per cent over cash, but without the volatility that usually accompanies such high alpha. The IRISx4 fund was developed to respond to that demand. With the robust macroeconomic rationale and framework of IRIS, the fund offers an excellent diversification opportunity for an investment portfolio."

The IRISx4 fund offers daily liquidity and implements a strict risk-management process2. It follows the success of IRISx2, another UCITS-compliant fund launched in September 2009 which has since displayed steady excess returns with low volatility, reaching €110m of assets under management.

The fund is available in EUR and GBP-hedged share classes for institutional investors, with advisor share classes launching across major European countries in the coming months. Corporate website: Source
KM

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