CFM strategies awarded coveted ‘Recommended’ by Zenith

Steve Shepherd

Steve Shepherd

Global quantitative and systematic asset management firm, Capital Fund Management LLP (CFM), has announced that its CFM IS Trends Trust Class A and CFM ISDiversified Trust were both rated ‘Recommended’ by independent ratings house Zenith.

Commenting on the ratings, CFM’s Head of Asia Pacific, Steve Shepherd said that he was pleased that Zenith continues to clearly recognise the quality of CFM’s algorithms and investment processes, which are based on scientific research and sophisticated information technology systems.

“Australian wholesale investors’ interest and commitment to quantitative-based alternative-risk premia strategies has been steadily increasing, because strategies like trend following, momentum and value have proven themselves to be a way to access returns, as well as diversification, at a competitive fee,” he said.

Mr Shepherd said that alternative beta strategies seek to capitalise on structural inefficiencies in the markets. One example of these inefficiencies is the so-called herd instinct, which can lead people to do what others are doing, rather than using objective information. Such irrational human behaviour can lead to structural inefficiencies in markets – something CFM capitalises on to create performance for investors.

“At CFM we apply a scientific approach to exploit inefficiencies by identifying plausible and repeatable market patterns, and aiming to offer investors low-correlation, cost efficient, liquid investments.

“Over three-quarters of our people are researchers and developers – and we pride ourselves on our culture of creativity and intellectual rigour, so it is pleasing to see Zenith call out our research team’s track record of success, and to describe them as ‘highly regarded’,” said Mr Shepherd.

In awarding the ratings, Zenith cited CFM’s “impressive pedigree in quantitative investing, a highly regarded research team and a model with demonstrated success”. Criteria include investment personnel, security selection, portfolio construction, risk management, organisational strength, as well as risk-adjusted performance. Funds rated “recommended” are deemed strong investments – and typically rank in the first quartile on most criteria.

In conclusion, Mr Shepherd said that CFM intends to continue to expand its presence in Australia, following the opening of a permanent office in Sydney and the appointment of two investor relations directors.

“We are committed to servicing and growing our wholesale client base which includes institutions, wealth management and dealer groups, as well as family offices. We are always pleased to have independent ratings houses, like Zenith, give our funds the tick of approval, and reinforce our view of their quality,” said Mr Shepherd.


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