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Emerging Markets Manager, Broad Reach, continues strong performance run

Friday, April 08, 2022
Opalesque Industry Update - Broad Reach Investment Management, the London-based emerging markets macro manager, has continued its strong run of returns with net gains of 4.7% in its Broad Reach Fund, and 7.6% in the Broad Reach Explorer Fund to add to +15.45% and +25% net respectively, achieved in 2021.

Broad Reach is the only EM macro manager trading a full systematic program alongside discretionary strategies. This approach has been successfully applied to the flagship Broad Reach Master Fund which, since launch in 2016 to end 2021, has generated annualized net returns of 10.3%. The Explorer Fund, launched in 2019 is exclusively systematic.

"Emerging Markets embody a wide range of alpha streams, and certain EM macro strategies are better implemented systematically, namely carry and momentum" explains Bradley Wickens, Founding Partner. The system can take advantage of the breadth of the EM universe in ways that a purely discretionary manager cannot match. This approach frees our discretionary investment team to focus its attention on specific, idiosyncratic strategies, matching risk to opportunity."

The Master Fund invests in FX, equities, rates, credit and commodities across nearly 50 countries, and adjusts the risk allocation to reflect the opportunity set and market structure. Typically, allocation to systematics is 40%-50%, special situations, 10%-50%, and discretionary macro, 10%-50% often scaled-up during regime shifts. Returns from each of these three segments are uncorrelated.

"In the current geopolitical turmoil, as some investors have become wary of emerging markets, Broad Reach's dynamic approach continues to demonstrate that strong returns are available from a wide range of positions at acceptable levels of volatility," Wickens concluded.

Broad Reach Investment Management has an aum of some $750m, towards $600m of which is invested in the flagship Broad Reach Fund. The firm is closely aligned with investor interests through substantial invested partner capital and a high degree of client transparency.

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