Pioneering global alternative beta fund added to Macquarie Wrap  and BT Wrap platforms


Capital Fund Management yesterday announced the CFM Institutional Systematic Diversified Trust (CFM ISDiversified) has been added to the Macquarie and BT Wrap platforms.

Commenting on the addition of CFM Institutional Systematic Diversified Trust to these major platforms, Head of CFM Asia Pacific, Steve Shepherd said advisers and investors alike are increasingly embracing the benefits of diversified alternative beta strategies as an essential part of their portfolios.

“Demand from advisers for CFM ISDiversified Trust has been growing, so we are really pleased that Macquarie and BT have given us this vote of confidence, and that advisers will now be able to access our fund more easily,” he said.

CFM is a pioneering global player in the alternative space, with a long track record.

They apply rigorous academic techniques to every investment strategy, and have been among the first to seize the opportunity on offer from massive shifts in data proliferation globally. Their alpha and alternative beta strategies include trading liquid financial instruments across global markets, including futures, equities, bonds, options and spot and forward foreign exchange.

Mr Shepherd explained that alternative beta strategies seek to identify and exploit alternative betas, or risk premiums, via a rules-based, quantitative approach.

“These kinds of strategies have historically been associated with hedge funds – which aim to produce ‘absolute returns’, in other words, to perform in a wide range of market conditions.

“Hedge fund managers employ a wide range of investment strategies not always available to other investors – and these ‘alternative’ strategies produce a return profile which seeks to be
un-correlated to traditional asset classes,” he explained.

Some of these alternative strategies have become well-established, such as long term trend following, and CFM thus believes they can be classified as alternative beta.

The CFM ISDiversified Trust combines a number of such well-established alternative beta strategies which are believed to persist over long periods of time, to provide some of the benefits of traditional hedge funds but in a lower cost, more liquid format.

In conclusion, Mr Shepherd said that the importance of diversification in a portfolio is key, particularly since the Global Financial Crisis (GFC), when asset classes previously thought to be uncorrelated moved together in a way investors did not expect.

“That’s where alternative beta strategies play such an important role. The strategies themselves are highly diversified.

“This is why we believe they can be used to lower volatility and smooth out returns seeking to provide sustainable returns over time, in a transparent, systematic way.” he said.

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