Justin Tay
The number of market neutral strategies available to retail investors in Australia has historically been limited according to Justin Tay, Zenith’s lead analyst on the Market Neutral sector.
Commenting on the release of Zenith’s latest Market Neutral Sector Review Tay said: “Given the strong performance and attractive, differentiated risk attributes of these strategies through time, it has not been surprising to see a number of these longer-standing offerings reach capacity and close to new investment.”
“Of the Australian market neutral funds which are rated Recommended or above by Zenith, only around $1.2 billion of available capacity remains across two funds, as at 31 December 2016.
With the strong levels of FUM growth experienced by the sector in recent years, Zenith has projected that this capacity will be fully exhausted by mid-2018.”
“However” Tay added, “over the past two years, Zenith has observed a number of globally orientated market neutral strategies becoming available to Australian investors.
We have initiated new ratings on two such funds. And in addition to this, we continue to see new Australian orientated market neutral funds come to market, two of which we have initiated ratings on.
Combined, these four funds have added approximately $A 3.7 billion in additional capacity for the sector.”