Platform provider responds to adviser demand for liquid alternatives

Steve Shepherd

Steve Shepherd

Global quantitative asset manager CFM (Capital Fund Management LLP) has announced the addition of the CFM Institutional Systematic Diversified Trust (“CFM ISDiversified Trust”), one of its alternative beta fund range, to the IOOF platform.

Steve Shepherd, CFM Head of Asia Pacific, said that demand for cost-effective liquid alternatives is growing rapidly:

“Advisers and investors alike are seeking real, not illusory portfolio diversification in a liquid form. With its objective of providing long-term capital appreciation via returns that aim to be uncorrelated with traditional asset classes, the CFM ISDiversified program may answer this need. We are really pleased that more advisers can now access a diversified portfolio of investment strategies that aim to be de-correlated from traditional equities, thanks to the addition of CFM ISDiversified Trust to the IOOF Platform”, he said.

Mr Shepherd explained that alternative beta strategies seek to identify and exploit risk premia or behavioural anomalies in the financial markets, via a rules-based quantitative approach to investing.

“Traditionally, alternative beta strategies have been associated with hedge funds. Alternative beta strategies aim to produce returns in both rising and falling markets by using ‘alternative’ strategies, which aim to be decorrelated with traditional asset classes”.

The problem for advisers and their retail clients is accessing these strategies in a meaningful way. This is where CFM ISDiversified Trust fills the gap, offering a diversified portfolio of well-documented and persistent alternative strategies, but in a liquid form which advisers can easily access and at a lower cost than traditional hedge fund investments,” he said.

In addition to its listing on the IOOF Platform, CFM ISDiversified Trust is also available on seven major platforms: Macquarie Wrap, Netwealth, Colonial First State, BT Financial, Hub 24, Mason Stevens and Powerwrap. It has a ‘Recommended’ rating from both Lonsec and Zenith and is distributed in Australia through Winston Capital Partners.

In conclusion, Mr Shepherd said that alternative beta strategies may be a way to achieving portfolio diversification.

“Advisers and investors understand that true diversification is a key element in portfolio construction – but finding this diversification can be challenging. Alternative beta strategies such as the ISDiversified program are themselves diversified, but more importantly, have shown a low level of correlation to market movements in the way that equities and fixed interest are, spreading the risk and diversifying the portfolio,” said Mr Shepherd.

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