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Alternative Market Briefing

BMO launches multi-strat '40 act fund

Tuesday, May 26, 2015

Bailey McCann, Opalesque New York:

As we reach new market highs, investors are looking for a way to diversify and protect their portfolios from a potential market correction. Liquid alternatives are rapidly gaining ground as a critical tool for investors to use to mitigate downside risk. The BMO Alternative Strategies Fund, is one of the newer multi-strategy liquid alternative funds to come to market and co-portfolio manager Lowell Yura tells Opalesque that investors have shown a strong appetite for this new version of a fund of funds.

"Unlike a lot of multi-strategy funds we plan to keep this fairly concentrated at 6-12 managers instead of latching on to more than that which can make exposures expensive," Yura says.

BMO Global Asset Management has $249 billion under management. Just over $35 million of that is in the BMO Alternative Strategies Fund. The fund has recently come to market and Yura says the goal of the product is to offer investors exposures that might otherwise be missing from a standard 60/40 portfolio.

The fund provides exposures to a handful of strategies including - equity hedge; relative value; hedged credit; event driven and macro. Yura explains that the multi-strategy structure creates a lower cost version of the traditional fund of funds model. "You can make the argument that the manager breadth you'd see in traditional fund of funds isn’t the same, but the fees are so much lower. 300 basis points is a lot to make up ......................

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